Filesharing, the legacy

[Grojlach]

We haven't had one of these in at least a few weeks, so why the heck not...

Interesting article about the Australian market I came across (dated 29th of March 2004):


Music industry way off track with song and dance about falling sales

Figures show that we're buying albums in record numbers, despite the internet 'freeloaders', writes Steve Cannane.

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 first time.

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 sales.

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.

Source: SMH.com

And another article about a Harvard investigation pointing out that filesharing isn't damaging sales at all; but I suppose it's relatively easy to pick holes in the methods used to come to those conclusions, just like is the case with investigations concluding the opposite, btw. It just depends on whatever you want to conclude at this point, I suppose.

I'll add some thoughts of my own in a later stage, too busy with other things right now (exams ). But in the meantime, let's start the ball rolling. [img]smile.gif[/img]

[ 03-31-2004, 09:36 AM: Message edited by: Grojlach ]

[johnny]

It's because they want more....more ....more... ! I've read about this somewhere already. It almost made me feel like starting to download music. Almost.

[Ilander]

I don't have the connections to DL music...but I have friends who purchase cd's and have cd burners...we keep ourselves supplied on a low cost basis...and I have no problem with it, because I DO actually buy the cd's...just not all the music

[Grojlach]

Originally posted by Ilander: I don't have the connections to DL music...but I have friends who purchase cd's and have cd burners...we keep ourselves supplied on a low cost basis...and I have no problem with it, because I DO actually buy the cd's...just not all the music

So basically, you purchase illegal copies?

[Timber Loftis]

No, he means he buys the BLANK CDs. [img]graemlins/heee.gif[/img]

Nice article. That'll teach to go pleading poor.

[pritchke]

Originally posted by Grojlach: 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?

The top dogs of these industries like Johnny said want more, more, more, they look at one thing as good news. Percentage of Growth from the following year, they don't look at $1 billion more in sales as good news they look at it along these lines. Last year profits were 5% greater them previous years. Then next year they expect to have 10% percent more profits then the last years and on and on. If not they piss, wine and moan about not having enough money. Any fool knows that eventually profit growth will tend to level out as it just isn't sustainable population wise. Thing is the top dogs are blinded by greed and just making a decent profit is not enough.

[ 03-31-2004, 02:02 PM: Message edited by: pritchke ]

[pritchke]

Here is a recent article for Canada.

http://www.cbc.ca/storyview/MSN/2004...ad_court040331

TORONTO - Individuals who share personal copies of music files on the internet are safe after a Federal Court rejected a motion on Wednesday that would have allowed the music industry to sue them.

Justice Konrad von Finckenstein said the Canadian Recording Industry Association hadn't shown copyright infringement by 29 people who had allowed their music files to be uploaded.

Making files available in online, shared directories is within the bounds of Canadian copyright law, von Finckenstein ruled.

Hooray!!!Lets go upload some files.

[ 03-31-2004, 04:18 PM: Message edited by: pritchke ]

[Illumina Drathiran'ar]

I believe that record sales have gone up. I've said it before and I'll say it again, I've always been hesitant to shell out $15 to $20 bucks for a CD... but now that I sample music and know what's available, I buy *more* CDs than I have in the past. It's marketing. It works. If the music companies are smart, they'll realize that filesharing can be a good thing and stop harming their images by suing children and tying up important resources that are needed elsewhere.
I realize that this might be seen as justifying crime by some. I also realize that not everyone will buy a CD and will abuse the system. Apparently, though, there are more people like me than there are people like them.
Go figure.

[wellard]

Now I am in no way condoning copying

Maybe what the Industry is afraid of is loss of control / power ?

Rather than fans just being exposed to what they release commercially or pay radio to promote, fans are now accessing 'non commercial' bands at a greater rate than before. It also is allowing the music maker to bypass the industry altogether.

A loss of power/ controll maybe more upsetting to them than anything else, anyone else agree?

[Ilander]

I think any "captain of industry" would dislike that, but so be it! Horray for democracy in music! Or at least we're getting there...