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Physical Sales Continue to Slide as the Digital Market Heats

Postby SlyckTom » Mon Oct 03, 2005 4:26 pm

As technological progress moves the human civilization forward, fewer people are finding the clumsy, cumbersome and outmoded compact disc useful these days. The availability of files on the Internet has made this limited storage medium a dubious purchase, as CD image mounting tools such as Daemon Tools or Alcohol 120% easily rectifies the need for such devices.

Although such an assessment has been traditionally more fitting for the computer savvy, the situation is becoming increasingly similar for the mainstream audience. Since the beginning of the new millennium, the MP3 player has virtually eliminated the usefulness of the CD for many individuals. The small, solid-state device is able to take an incredible amount of abuse yet still function flawlessly. More importantly, the MP3 player replaces archaic devices such as the CD changer, as it is capable of storing literally thousands upon thousands of songs. Something no Earthly priced CD changer can do.

So is it any surprise to the music industry their brick and mortar staple is slowly slipping into obscurity?

Apparently it is. The music industry is still complaining that CD sales are down, and have found a wide array of explanations. They’ve even tried suing people, thinking it would somehow motivate them to purchase such outmoded devices. According to a recently published report by the IFPI, or the International Federation of the Phonographic Industry, finds that global physical music sales have continued their five-year slide. According to the IFPI, “music sales fell 1.9% to a retail value of $US 13.2 billion in the first half of 2005, compared to $US 13.4 billion in the same period of 2004.”

Different areas of the world witnessed varying degrees of CD rejection. The United States, by far the largest music market, endured a sales drop of 5.3% in value and 5.7% in units shipped. The United Kingdom also saw CD sales drop, although France offset some physical sale losses with only a 2.7% drop in sales value, but shipments grew by 7.5%.

The news wasn’t good in the Asian/Pacific rim, which saw staggering sales losses in both Japan and Australia.

Although physical sales are down, there is some good news. In addition to the music industry saving a ton of money on car insurance by switching to Geico, digital sales are up – way up. The success of music stores such as iTunes nearly counteracted the continuing decline of CD sales.

According to the IFPI, digital music sales have totaled 790 million US dollars in the first half of 2005. The music industry only saw 220 million US dollars at the same time in 2004. This rapid increase in digital music sales equates to an impressive 6% of total sales. As more people adopt such music acquisition methods, physical sale losses should be completely offset within a year.

While the music industry blames both physical and online piracy, lower prices, a declining DVD audio market, and furries for their diminishing CD market, the answer to many of their problems is staring them square in the eye. The global population is moving forward and is finding that the Internet is solving many of their music needs. This report published by the IFPI screams the CD is no longer the viable piece of technology it was 10 or even 5 years ago. The rest of the world has moved on and is waiting for the music industry to catch up.
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Postby squirm » Mon Oct 03, 2005 4:48 pm

I'd like to know why the music industry believes they have a right to increased profits every year.
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Postby locotus » Mon Oct 03, 2005 4:55 pm

Actually this is not the first time that there's a market change do to innovation.

Just one case: when the first audio cassettes and audio recorders hits the market, and killed the olds LP.

So what is trully amazing is that they get surprissed, and not been capable in making the adaption required by the market and still refuses to understant that a new kind of consumer has arrived.
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Postby AussieMatt » Mon Oct 03, 2005 4:57 pm

One of the reasons for the online price of 99c for Music is so the music industry doesnt upset the brick and mortar retail channel who are scared of digital music taking thier market share .

Very Shortsighted in my opinion and it may take a few years for the market to shift like CDs did in the early 90s.

The Brick and motar stores also have to adapt and move to a new bussiness model and put in digital kiosks or somthing simmilar to those offered by DVD Station.Think of a store where you could download any content you want onto a blank CD\DVD ,Memory Stick,MP3 player and print a sleeve with a profesionaly printed label for half the price you are currently paying. You could even create Mix CDs for freinds ect.

Many indie record stores\labels no longer have a Bricks and Mortar storefront and do most of thier bussiness online and mail out thier inventory to thier customers that want a pysical product .Others like electronic music labels distribute thier content online exclusively .
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Postby darkened » Mon Oct 03, 2005 5:19 pm

Does every seem to forget the lack of mentioning "cd shipments fell" yet they're cut like 5,000 artists. And do not hire new ones? Yet supposedly with half the artists and no new ones they're supposed to make as much revenue as they did before?

It's all a brilliant shame in how to destroy variety, curtail creativity, chill innovation and all the while making profits sky rocket.
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Postby IceCube » Mon Oct 03, 2005 5:31 pm

SlyckTom wrote:In addition to the music industry saving a ton of money on car insurance by switching to Geico...


LOL!!!

Yeah, I can see why the market has shifted as it has. I look around my room and see a ton of CD's from way back when I had a tiny hard drive and hardly any way to store larger files, so I burned it to CD's.

I think this whole shift is in large part because of larger hard drives. If you had a 1GB hard drive, you would be crazy to try and get a music library going. Now on the other hand, you have people with anywhere between 100GB to 1TB of storage space. It's just not as crazy to stuff thousands of songs on a hard drive because you can do that now... VERY easily... even in WAVE format.

Of course, it is also in large part due to media hype over the overpriced, eyecandy, battery exploding, fragile cased iPods. I can also then see why the Recording industry would blame digital technology for CD sale losses. On the up-side, they get a propaganda platform as they suck up 70 cents out of 99 cents of every sale off of iTunes to say that piracy is oh-so hurting them :roll: .

As technology changes, so will the buisness models. It is becoming increaingly apparent with independants releasing albums, TV and movies free on BitTorrent and the fact that everyone is switching to discless platforms to get their content fix that the need for a recording industry is more and more pointless because the recording industry is there to leech money off of album sales that are physically sitting in the stores that you would have to pay $1.15+ per letre in gas to drive to the store and a couple bucks for parking just to go in and pay 30-60 bucks on an album to get one or two good songs, then spending an additional 100 bucks on a CD reader and another 45 bucks for a portable discman including the cost of 10-50 dollar headphones just to enjoy your music.

This is also a good thing in terms of distribution. For the 5 bucks per thousand units plus the 2.50 per thousand cover art on the album plus the 25 cents it costs to put a special label right on the CD, then the jacking up of some 15-25 bucks per album the industry takes because they break their back to promote the album, then the extra 10-15 bucks the stores take from each album... and.. oh yeah, gotta pay the artist 0.0003 cents per album because they truly deserve such a high honor for the little tunes they made which is also split between the number of band members (usually between 2-4 members)

It just makes "duh!" type sense to go digital... cheaper.
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Postby Philweed » Mon Oct 03, 2005 7:15 pm

Well what discourages me from buying mp3 is the fact that the still use mp3. Yes okay they are small they are perfect when you on a 56k connection, but today with lots of internet users using broadband they should offer high quality songs on the internet. Before the format that they use on itunes etc equals or surpasses cd quality its just not good enough for real music fans
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Postby IceCube » Mon Oct 03, 2005 8:02 pm

MP3's at 320KB/s bitrate *dreamy sigh* Is that the highest it goes though? I think it is for an MP3 not at a variable bitrate.
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Re: Physical Sales Continue to Slide as the Digital Market H

Postby maseratiprogram » Mon Oct 03, 2005 9:37 pm

SlyckTom wrote:In addition to the music industry saving a ton of money on car insurance by switching to Geico, digital sales are up – way up.


hahaha cute <3.
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Postby Freebird Mike » Mon Oct 03, 2005 10:33 pm

The majority of the legal music sites advertise their products as "portable music", as in the music is primarily for iPod or mp3 players. Do you think Apple is selling their iTunes so that most people will burn it to CDs and never buy an iPod? As well, you can boast your device holds 500 songs if only 128 kbps files at about 2 - 4 MB apiece are available, rather than 10 MB 320 kbps or 30 MB FLAC.

Obviously, there is a quality ceiling (but I don't think it's 128 kbps) if you're listening to music thru a 4.5 mm connection to two open-ended headphones. However, it certainly doesn't cut it on a 6.1 home stereo system. It seems that the music industry only wants to give you the option of of purchasing CDs if you want decent home audio device music, unless you want to pay $50 a year for the privelege of shopping at MusicGiants.
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Postby BasicTek » Mon Oct 03, 2005 10:38 pm

Philweed wrote:Well what discourages me from buying mp3 is the fact that the still use mp3. Yes okay they are small they are perfect when you on a 56k connection, but today with lots of internet users using broadband they should offer high quality songs on the internet. Before the format that they use on itunes etc equals or surpasses cd quality its just not good enough for real music fans


My guess and it's only a guess is iTunes has to pay the RIAA 70% of the $$$ they get per song. With the remaining 30% they need to fund their site and bw requirements. So for them to make any $$$ at all they need to have the smallest files possible. Again that's just my guess.
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Postby Mel_Smiley_VIP » Tue Oct 04, 2005 12:55 am

I can't wait till the whole music undustry is dead and gone. I'm tired of all the rap and MTV artists and I'll be glad when no more music is released by popular musicians. They all need to put down the mic on go to work at McDonalds. I'll stick to listening to the Beatles over and over again.
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Postby IceCube » Tue Oct 04, 2005 1:22 am

Inde music... underground inde music...
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Postby vtwin0001 » Tue Oct 04, 2005 2:20 am

rap music?

who said money laundry?

that hip hop b$ is financed by drug money (that's what many ppl told to me... something I heard) maybe FBI should go after them, and not us normal ppl
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Postby Assyrian » Tue Oct 04, 2005 2:42 am

vtwin0001 wrote:rap music?

who said money laundry?

that hip hop b$ is financed by drug money (that's what many ppl told to me... something I heard) maybe FBI should go after them, and not us normal ppl


lol, hip-hop fan here

i dont know where you heard that bs from, but its funny. just because they wear baggy clothing and bling bling doesnt mean they all do drive bys and dealing.

kna'i'mean?

and also, what you mean "normal people"? you saying rap artists/blacks etc.. arent normal?
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Postby voodoohippie » Tue Oct 04, 2005 3:45 am

Excuse me but Rap is about the biggest form of piracy there is and here is why I say that. 1. Most rap songs use no instruments. 2. Most Rap or hip hop songs steal samples from Classic Rock and Metal artists that worked really hard on those guitar riffs that these dumb rap artists use to make their back ground noise while their yelling and doing all their crap. If we can get sued for Downloading I feel that Motly Crue should sue the hell out of that group or artist that had the loop of Home Sweet Home in the back ground. I can’t stand talentles musicians who make a living out of remakes. If you can’t write your own stuff to put on a CD go to work at McDonalds and let the real musicians make the music and earn the money as they deserve it not you posers. Just go back to the bars and the garages where you can entertain gangsters for $$. And that folks is why I don’t buy today’s music. Most of the stuff I listen to is older stuff like Pink Floyd, Rush, Black Sabbath, Ozzy, AC DC (old stuff), Aldo Nova, Dokken, Motly Crue, Skid Row, Poison, Twisted Sister, Slade, Quiet Riot, Judas Priest, the real list of the Gods of Rock go on and on. I feel about 90% of the yuth under the age of 27 need a lesson in what is real music. I don’t listen to top 40 there for I don’t share top 40. So p2p is not the reason for loss of sales. Bring back progressive Rock and you’ll see sales skyrocket.
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Postby AussieMatt » Tue Oct 04, 2005 7:01 am

Mel_Smiley_VIP wrote:I can't wait till the whole music industry is dead and gone. I'm tired of all the rap and MTV artists and I'll be glad when no more music is released by popular musicians. They all need to put down the mic on go to work at McDonalds. I'll stick to listening to the Beatles over and over again.


Have fun trying to find the Beatles on a Digital Music Service .

The Dispute between Apple Records and Apple Computer pretty much ruined the chance of the various rights holders in the Beatles catalog of distributing it digitally anytime soon.

Well I suppose you can get all the Beatles catalog on open p2p so its their loss .

The Music services ,the record industry and the rights holders will have to realise one day that one of the appeals of open p2p is about access and if you cant access the content they want from a pay service people will find the same content via a open p2p network.The same thing can be said for higher bitrates.
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Postby Mel_Smiley_VIP » Tue Oct 04, 2005 7:16 am

I already own thier albums and CD's so I don't need to look for them anywhere. I do have some nice bootlegs of some rare tracks that are nice though
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Postby Assyrian » Tue Oct 04, 2005 7:27 am

voodoohippie wrote:Excuse me but Rap is about the biggest form of piracy there is and here is why I say that. 1. Most rap songs use no instruments. 2. Most Rap or hip hop songs steal samples from Classic Rock and Metal artists that worked really hard on those guitar riffs that these dumb rap artists use to make their back ground noise while their yelling and doing all their crap.


lol, you dont listen to rap, and you know so much about it.

Kanye West
Scott Torch
Jazzy-Fizzle
Dr. Dre (made $50 million from the release of Chronic 2001)
Lil' Jon
Pharell Williams

those rap artist/producers are one of the best beat makers/instrumentals around.

the ones that steal the songs do it from permission from the original artist, and they also do it so people will remember them old songs.

look at Alien Ant Farm, they took the original Smooth Criminal from Michael Jackson and remade it, how popular did it get?
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Postby vtwin0001 » Tue Oct 04, 2005 9:27 am

I'm just saying what I heard man :P

I'm no fan of that music nor wearing bling bling :shock: (which is for my way of thought plain ridiculous), but thats waaaaaay too offtopic :lol:
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Postby cybermoose » Tue Oct 04, 2005 11:47 am

Assyrian wrote:
voodoohippie wrote:Excuse me but Rap is about the biggest form of piracy there is and here is why I say that. 1. Most rap songs use no instruments. 2. Most Rap or hip hop songs steal samples from Classic Rock and Metal artists that worked really hard on those guitar riffs that these dumb rap artists use to make their back ground noise while their yelling and doing all their crap.


lol, you dont listen to rap, and you know so much about it.

Kanye West
Scott Torch
Jazzy-Fizzle
Dr. Dre (made $50 million from the release of Chronic 2001)
Lil' Jon
Pharell Williams

those rap artist/producers are one of the best beat makers/instrumentals around.

the ones that steal the songs do it from permission from the original artist, and they also do it so people will remember them old songs.

look at Alien Ant Farm, they took the original Smooth Criminal from Michael Jackson and remade it, how popular did it get?


Firstly, the ones that 'steal' the songs don't get permission from the original artist as they rarely hold copyright for the song. Permission is gained from the record company and I don't think they are interested in artistic quality ($$$$)

And yet, the Smooth Criminal remake was really popular, but then it was also cr*p.

Rap and (to a lesser degree) hip-hop have suffered from their popularity. What was once innovative, heartfelt musical creation has become a moneymaking vehicle for talentless wannabe's (like so many other musical styles).

I am no fan of rap, and if I see one more artist called "Lil'", I'll probably scream (when do they stop being Lil' ?) but I am all for innovation in music - shame 90% of rap and hip-hop is just retreads of old songs.
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Postby cybermoose » Tue Oct 04, 2005 11:50 am

Sorry for continuing off-topic - blame me being a newbie :lol:
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WinMX

Postby drewslexy » Tue Oct 04, 2005 12:53 pm

:!: WinMX "OPENNAP PROTOCOL" REMAINS WORKING.
I've used it with uploads and downloads....
WinMX is only off for now, readjusting. Anyone
dedicated to such a fantastic program will not
just go quietly in the night... WE ALL NEED to
keep our systems running in the OPEN NAP AREAS
of WinMX and learn :idea: or how to. Load your
latest .wsx directories and attack, don't
just roll over casue it an't over, their
version 4.0 was about to be released, now I
believe they'll be back - Semper Fi,
:D :D DrewsLexy :D :D
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Postby Christopher » Tue Oct 04, 2005 1:09 pm

squirm wrote:I'd like to know why the music industry believes they have a right to increased profits every year.


That is a very good question, and one that I have yet to hear the music industry answer to a degree that I accept. Everything they have said lately leads me to believe that they deserve to go out of business, simply because they will not change old business models that don't work in the new century.
Think about it. Every industry or business that refused to change during the 1900's from 1800's business practices went out of business, and I don't hear anyone saying that they didn't deserve to go out of business.
The same thing applies to 20th century thinking in the 21st century. If you don't change your thinking and your business models to compete in a new economy, you deserve to go out of business. Plain and simple.
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Postby no_dammagE » Tue Oct 04, 2005 1:49 pm

lol lol lol lol lol lol lol lol

Take a buying power A and divide it by the number of models B (in case that every model is equal). You get X

Now: B++

X is smaller

They lose on cd sales one fourth of their win on online sales AND THEY whine.

The problem is described below: if you introduce a new sells model and so the number B increases, the win off every model falls. Why? Because nearly the same number of money flows every month from the peer group. And MiMo didn't get one thing: people will never buy the same work (laziness?) 4 times (CD, CD for car, MP3, MP3 for stick)
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