Record Execs are changing there tune about file-sharing and sales

[TheOnlyBob]

From CDFreaks
---------
Here is an interesting article in the New York Times , in it they remind us of some facts and then get the latest revelations from the record executives. They are now blaming their woes on everything, except their own price gouging and poor quality products. "Not long ago, the record industry's trade group issued an alarming statistic. Music shipments, it said, were down 15.8 percent in comparison with the previous year. The reason, according to the trade group, the Recording Industry Association of America, was in large part because of music downloaded on file-sharing services and music burned onto recordable CDs."

---------------

More on that "15.8 percent" later.


"It's not all file-sharing," said Andy Gershon, the president of V2 Records, home to the recording artists Moby and the White Stripes. "I do think that right now, the business is sick but music is great."

Other record label executives agreed. Among the problems they cited were the consolidation of radio stations, making it harder to expose new bands and records, and the lack of a widely popular musical trend like teen-pop, which relied on stars like Britney Spears and `N Sync to drive young people to record stores.

They also blamed a poor economy and competition for the limited time and money of teenagers and young adults, their main customers, who often find that they prefer buying DVD's, video games, sneakers and more.

Indeed, thousands of music retail stores have closed recently, and the ones that are still open have given shelf space to competing products, like DVD's and video games.

In addition, the introduction of CD's in the early 1980's encouraged consumers to replace their vinyl records with copies in the new format, but that sales spike has since abated.

And as major record labels have become part of large international corporations, industry insiders say, less attention is being paid to discovering and marketing music properly.

"So many labels are in play — they're trying to be acquired or acquire another company or merge — so anything that affects their immediate balance sheet is slashed," one record-label executive said. "Money is not being put into marketing and A.& R. because people don't want to spend the money because it looks bad on the balance sheet."

As for unauthorized file-sharing and CD burning, no one interviewed doubted that it is a serious problem. But research from independent sources suggests that while file-sharing may indeed be hurting CD sales, the problem is not as drastic as it has been portrayed by the industry.

"You can't just draw a line from A to B and say that sales are down" because of unauthorized music downloading, said Josh Bernoff, the principal analyst for media and entertainment at Forrester Research.

-------------------------------------

Here is an example of misleading statistics. The reported 15.8 percent drop in shipments of CD's provided by the record industry illustrates only how many CD's record labels are sending to stores. According to the sales-tracking company Soundscan, which monitors actual consumer behavior, music sales are down by 8.7 percent in comparison with this period last year, a significant but much smaller number.