Music industry way
off track with song and dance about falling sales
The Australian record industry has just
had its best year ever. But it doesn't want you to know about it. This
month ARIA announced its sales figures for last year. In its press
release, it talked about Delta, it talked about falling CD singles sales,
it talked about the rise in DVD sales, but at no stage did it tell us it
was the industry's best year ever. Why bury the good news?
Record industry types aren't usually shy
about success. But this time their success is a little embarrassing. For
the past few years the industry has argued that file-sharing and CD
burning is having a negative impact on sales. But, unfortunately, their
own sales figures don't back up their arguments.
ARIA's press release was slugged with a
bizarre headline: "Music DVD continues its rise whilst CD singles
slide further". A mixed year, you might think. Not so. It took a
canny finance reporter, SBS's Peter Martin, to decode the spin. He had
access to ARIA sales figures going back to the early 1980s. He worked out
what ARIA knew but decided not to share: when sales cracked 50 million
albums for the year it was the first time this had happened. And combined
sales of all formats for last year climbed to more than 65 million for the
But that's just one year, I hear the
record companies say. OK, let's go back to 1998. The year before an
18-year-old college dropout named Shawn Fanning wrote a file-sharing
program called Napster, the software that kick-started the downloading
boom. In that year Australian record companies sold 39.6 million CD
albums. Five years later the figure had gone up to 50.5 million. That
makes it hard to argue that downloading and CD copying has been killing
But what about the sales of singles, I
hear the record companies cry. Singles sales did fall last year by a
significant amount. While album sales increased by 7.85 per cent, singles
sales went down by 16.5 per cent. But what would you rather? We know which
format makes the most money. ARIA wants to stress the drop in singles
sales because it suits its argument.
But it's not telling the whole truth. It
neglects to mention the record companies are not releasing as many singles
as they used to. Sales of singles do not make much money. Singles are
these days pretty much released for promotional purposes - to get radio
play and drum up interest in an album. In the US, singles have virtually
disappeared from sale.
But what about our research, I hear the
record companies scream. ARIA paid a research company to survey music
consumers. The survey results suggest there's been a 12 per cent decrease
in CD purchases by people who are into file-sharing. The greatest
percentage is with the under-17s - people who don't have much money. But
the research suggests those with the money, the 45 and overs, are buying
more CDs after file-sharing. Now that's a statistic we never hear quoted.
According to Stephen Peach, CEO of ARIA,
"The free ride simply can't continue indefinitely at the expense of
the owners and creators of music."
If we ignore the rhetoric of record
companies caring about artists for a moment, let's think about this. Maybe
it's the record industry that's getting a free ride from file-sharing - a
massive marketing system that allows music lovers to get exposed to all
kinds of music without the record industry having to pay a cent.
I'll tell you what the record companies
are paying for now, and it's not scholarships for the struggling artists
they say they're trying to protect. It's lawsuits. ARIA is taking on Kazaa
and suing university students. American record companies have sued nearly
2000 file-sharers in the past six months. Even the FBI has become
involved. It says music piracy has become its third priority behind
terrorism and counter-intelligence. A number of US Congress members who
rely on the entertainment industry for campaign funds lobbied the FBI to
spend more money hunting file-sharers and CD burners. So now CDs in the US
carry FBI stickers warning of fines of $250,000 or five years in prison.
There's been no similar push by
Australia's Federal Police. But keep your eyes on the figures - next year
could be another record year for album sales and for prosecutions.
Steve Cannane is a Triple J
This story was found at: http://www.smh.com.au/articles/2004/03/28/1080412234274.html
This article brings up a huge argument regarding whether or not the Music Industries around the world are being entirely truthful with the public. This article states that not only have CD sales not dropped, they have actually risen in the last five years. In 1998 the year before Napster was released CD sales brought in 39.6 million. Five years later, after the launch, shutdown, and re launch or Napster and many other MP3 file sharing programs CD sales are at all time highs at 50.5 million. The only sales that have dropped are in singles, which sales have dropped 16.5% which is rather small seeing how CD sales bring in more money then singles. So should the public really believe what the RIAA is complaining about how file sharing is sending the industry out of business? Who's breaking the law now?...