The Record Industry Collapse
By Cédric Pierre-Louis on Saturday 1 December 2007, 01:32 - Music - Permalink
Each year since 2002, when music sales began to drop, the RIAA (Recording
Industry Association of America) have released pessimistic and unsurprising
reports about the state of the « recording union » industry. This
group, which formed in 1952 to represent the interests of the recording
industry in the United States, consists of a large number of record labels and
distributors who produce and distribute about 90 % of recorded music sold in
the US (source
Wikipedia).
Unfortunately it has become unpopular, due to its current « witch hunt » against piracy which caused more than twenty thousand lawsuits in these last years, the RIAA has argued that P-2-P is the principal reason why music sales decline and considers most web surfers as potential pirates. This institution is also one of the most active pro-DRM lobbies. However this digital rights management dramatically limits the use and enjoyment of digital songs, and therefore is clearly the main cause to why the legal downloading services don't manage to reach the growth they deserve.
To my mind and not only mine, The RIAA like most other entities which defend their national record industry, go the wrong way in their struggle with the music industry crisis. They seem to misunderstand the new trends which shatter the world music industry and certainly go after the wrong person.
The first and foremost thing you have to know about the RIAA is that they know how to exploit figures and statistics to make themselves look favourable. Indeed, in the controversial debate about the music industry collapse, everything depends on the interpretation of arguable numbers and statistics. For example, when the RIAA claims that the music sales has decreased 25% between 2006 and 2007, it doesn't mean that the music market has completely fallen. In fact, most of the time, « the RIAA actually counts the sales of only the 100 top charting CDs each year » (more on how the RIAA counts music sales and calculates losses). As you can imagine the numbers announced by the reccord lobby can’t be used as a obvious proof of the supposed « morose state » of the record industry, but can just « suggest declining market share for the RIAA’s members and big name artists like Britney Spears »(MaisonBisson.com).
What the RIAA seems to understimate is the « alternative » music market which is lately gaining more and more importance. Indeed the part of music and CDs which are self produced and released by non RIAA members, are stronger now than ever before. A growing number of artists tend to create, distribute and promote themselves without the help of any traditional labels. The new IT era makes access and promotion easier that independent musical production thanks to artist or music websites, webradios (Deezer, RadioBlog, Last FM), social network (My space, Facebook), P2P client (e-mule, bittorent) and video sharing platforms like Youtube or Dailymotion. These artists are also used to distributing their Cds and earn their money via concerts or tours. So a new paralell recording ecosystem has emerged these last years and seems to bypass more and more the heavyweight labels. Even some famous « hit makers » like Prince, Nine Inch Nails or Radiohead decide to follow this trend and they are not the last who want their freedom.
« When the RIAA refers to the “record industry,” they are always misrepresenting themselves» (MaisonBisson.com). In this context of mass self-publishing, the RIAA can't really determine what are the sales for the entire record industry because their members obviously « under report the incalcuable number of self publishing artists ».
Moreover, other reasons can also explain the decline in music sales. As the quality of music production declines the customers become disilusioned and are therfore reluctant to buy cds. In other words, when consumers get disappointed with a company's products they will consequently boycott them. In fact I feel that for most of the big entertainment companies such as Universal and Sony, the commercial side of musical production is sometimes more important than the artistic aspects. People noticed that the priorities of the recording companies have changed, and more and more music fans have the feeling that the music industry takes them for a ride. Now the marketing potential of a band is more important than the talent or its musical qualities. Major music companies don't take risks anymore and prefer to promote the ephemere artists from american idol.
In fact, the main issue for the RIAA members is the fact they can not manage to modernize and update themselves to the new era of digital revolution. Instead of finding a more appropirate way to sell music, and look for new talented artists to promote them, they prefer spending time and money to take their own customers to court. Futhermore, a recent and very interesting study run by researchers at Harvard Business School and University of North Carolina demonstrates that CD sales are not reduced by file sharing.
Clearly it must be smarter to invest more ressources in order to create a serious and sustainable alternative to illegal downloading. Selling music on digital shops like iTunes or Amazon is good, but polluting all these songs with DRM is logically inefficient. Moreover all Cds are now protected with DRM too, which can affect or totally impede the reproduction in a car cd-player or on a computer. Sony went so far, that it implemented on some Cds a Rootkit, that is to say a kind of spyware which vigilated and informed the company about everything that their buyers did with them. Big brother is not far away... But sometimes some are braver than others, as EMI or other independant labels which decide to sell their artists' music without DRM, and the success of these new offers showed that they are right. The current French government also leans towards this opening policy but without releasing the pressure on piracy and illegal downloading (See the review of Denis Olivennes*).
Finally, if the RIAA members get to the bottom of things, they will understand that there is so many reasons which explain the music sales decrease. But they need to react quickly because nowadays they are less and less indispensable for a growing number of artists. So even if they go bankrupt, life will still go on in the music industry.
-Denis Olivennes is the Fnac CEO (a french high tech and media store) and
has been in charge of a mission to combat illegal downloading by the French
president, Nicolas Sarkozy.
2005 Sony BMG CD copy prevention scandal
Sony, Rootkits and Digital Rights Management Gone Too Far
A l’abordage du piratage (About the review of Denis Olivennes)