Tension grows between labels and digital radio

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Interesting observations.

WalMart is important to this discussion. It produces more than half the CD sales in the US. It sells only new releasese. It charges less for CDs, implying the need for volume to make a profit.

The content companies have met this challenge in their usual sensible way. They have reduced the number of new releases so that WalMart has less to sell at its lower prices.

Amazing, but consistent.

Quoting your quote:

Today' s report indicates that new releases declined by 16.5 percent between 2003 and 1998, approaching the 20.5 percent revenue decline. The lack of new releases should stand out as a critical development as the reduced product undoubtedly reduces revenues, particularly at big box retailers who carry virtually nothing but new releases.


The back catalogue issue is more complicated than it seems.

Yes, a lot of sales had been for the back catalogue, but as has been argued before, a lot of that back catalogue purchasing came about because people were replacing vinyl and tape.
The RIAA companies were due to suffer in year to year comparisons.

In addition, anyone who looks at the music racks at WalMart knows that the back catalogue is not available. There are other places to buy music. Someone looking for back catalogue recordings, typically a buyer with an already established interest, can go elsewhere.

So the music companies are seeing a broad reduction in interest by back catalogue purchasers. The immediate explanation is that newer musicians are not attracting loyal fans to the same degree as older musicians.

In other words, the RIAA is getting the message that many of their recent choices of musicians to promote have been... inadequate.

A speculation: I've read that musicians are dropped more quickly these days, after fewer albums. If so, the companies are preventing development of a back catalogue that would produce reasonably good sales for a long time.


The inaccurate RIAA statements about the effects of piracy have not been the result of ignorance:

A recent Economist article reported that an internal music-label study found that between two thirds and three quarters of recent sales declines had nothing to do with Internet music downloads.

And that's almost certainly using every slightly plausible assumption to inflate the result.


Almost every sales problem comes back to the failure of recording industry executives to respond to new distribution channels and changes in behavior by the public. This inflexibility, identified as a failed business plan, is the industry's real problem.

Posted by: Anton Philidor   Posted on: 01/16/06 You are currently: a Guest | Members login | Terms of Use

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