Tuesday, August 27, 2002

THE MUSIC INDUSTRY DIES. AGAIN:
RIAA reports further decline in CD shipping in the US Yadda yadda yadda... So far, so usual - not as many million sellers this year (but other than Eminem, what big titles would have been expected to do so?), and so on, and here's Cary Sherman: "Cumulatively, this data should dispel any notion that illegal file sharing helps the music industry," he said.
"In fact, there are numerous red flags and warning bells that illustrate conclusively the harmful impact of illegal downloading on today's music industry.
"This industry must continue to combat piracy in new and innovative ways - commercial disc piracy continues to harm the industry."
Hang about - just read that back. File sharing bad... illegal music downloading main culprit... harmful... file sharing" - but then concludes that its "commercial piracy." Did you see that sudden flip? Here we are talking about downloads, now all of a sudden we're talking about commercial disc piracy, which is a whole different part of the salad bar.
There's an almost criminally bad survey to accopmany the announcement - there so often is. The RIAA have paid for (and that might suggest some sort of lack of impartiality) a survey of 860 internet users (now, bear in mind that mean fiddler believe 500 out of 50,000 to be insignificant - so what does that make 860 out of all the millions of webusers in the US?). Lets pretend it was a proper survey with a signifant sample size, and find out: what do they say?
Among people who said their downloading from file-sharing services had increased over the past six months, fully 41 percent reported purchasing less music now than six months ago, compared to only 19 percent who said they were purchasing more music.
So, despite the economic turndown, and the lack of many major releases, well over half the people who report downloading more have either purchased the same amount or more music than they were a year ago. Isn't that a pretty good figure? Many industries in America would be pleased that less than half their toughest market segment have purchased less of what is a product with a very elastic demand at the best of times. What next?
Even for those who are downloading the same amount, nearly two-to-one are purchasing less music in the past six months -- 25 percent purchased less, 13 percent more and 62 percent purchased the same amount of music.
So, there again, I'm not sure why this is meant to be dire - seventy five percent of people purchases at least remain steady is a glowing headline, isn't it?
And, for those who are downloading less, 22 percent said they purchased less in the last six months, 23 percent said they purchased more and 55 percent said they purchased the same amount.
So let's get this straight - one in five people who download less music are even then not buying as much? Doesn't that suggest the evaporation in the market is as much down to the market having less cash, and less glittery things to tempt them?
Furthermore, considerthe PriceWaterhouseCoopers figures that present us with the 7% drop. (And, hey, let's not roll our eyes at the American accountants; I will not have sniggering at their expense - just because Arthur Andersen has been totally discredited doesn't mean you can't trust a single word any accountant says). That drop isn't in sales - like the last lot of figures were for; it's for shipping. Now, forgive us if we're wrong here, but if sales dropped last cycle, surely there's going to be less shipping to shops next cycle, as the shops will downgrade their orders to take account both of the previous fall in demand, and the increase in unsold stock they will have built up as a result. In effect, then, this new 'drop' is little more than the drop they reported before, but wearing warehouse overalls instead of front of house suit. Does anyone at the RIAA actually have any economics training, or do they consider that too vulgar?


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