The RIAA continues to turn up the legal pressure on just about everybody to combat falling CD sales, blaming the explosion of downloaded music for plunging revenues, but another, more plausible explanation lies in industry data. While downloading music may contribute to the trend of falling CD sales, the failure of the RIAA business model in the face of a changing market bears most of the responsibility. The days of big industry monopolizing the market, giving us a few 'chosen' bands to select from, charging higher and higher prices for only 'CD quality' music are numbered. Evolution continues, maybe the RIAA model will go the way of the Dodo.

CD sales have been falling about 8% a year for the past three years and the trend will likely continue, and hopefully accelerate. The RIAA blames piracy, but their real nemesis is a changing, more aware consumer who demands more and puts up with less. The current industry model selects and invests in bands likely to be marketable to mass audiences, binds them with restrictive contracts, controls the music station playlists, marginalizes other musicians and expects the public to purchase their overpriced music in a single format. The bullshit doesn't stop here. Not only have CD prices (for non-promotional CD's) steadily risen (from $15 in 1999 to $17 in 2002) despite low manufacturing costs and a depressed economy, but the number of new CD titles continues to fall (by 25% in the past three years). Less choices, more cost, limited sonic quality, disgruntled artists, unsatisfied consumers, alternatives available...you get the picture.

The RIAA solution to falling profits is lawyers and lawsuits; perhaps a profitable short term solution, but not a sustainable business plan. If they are to survive, they must adapt. On-line music transfer is here to stay and the industry needs to get with the program and develop workable business models that are developed with serious attention to consumer concerns (ie. variety, quality, ease-of-use, cost). Current online services like Pressplay and MusicNet are an improvement, but at $1 a song they cost about $18 for a full CD, are compressed files, and don't have any packaging....not enough.

The industry is also failing to support the fledging high resolution audio formats SACD and DVD-A which have a huge potential for increasing sales. Both formats are encoded at 24bits/96kHZ onto 6 seperate channels (compared to CD's which are 16bit/44KHZ onto 2 channels-- in other words CD's transfer 16bits of data every 1/44,000 seconds). The vastly improved bit stream takes digital to the next level, giving real color to metallic sounding CD music, not to mention true surround sound because each speaker has its own distinct signal. While the market is filled with SACD and DVD-A players at decent prices, the music industry has released a pathetic amount of content. There is a lucrative potential market for this music as people upgrade their existing CD and album collections, but the current lack of available titles makes the average cost-conscious music fan wisely wait before purchasing.
The music industry as we know it must evolve in the new digital environment...or go the way of the Dodo.

This story is filed in these Slyck News categories
Entertainment Industry :: RIAA
File-Sharing/P2P Related :: Statistics/Analysis

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