Lets see them blame THIS on file sharing! (1 Viewer)

[Jeff Ulmer]

I think Ajay's numbers are pretty conservative. Closer to 80-90% of the product released never breaks even, at least not for the artists, who are contracted to repay all the money that goes into their production and promotional campaigns. Major hits are one in a million. There are hundreds of thousands of albums released each year, and only a handful of those will ever recoup the cost of their production and promotion. The overwhelming majority of artists will wind up broke after years of work. There are better odds winning the lottery than making it big in the music industry.

Getting back to the topic that started all this off, lower TV viewing, I think it is due to a lack of quality programming. Outside of hockey, I can think of one TV series I would go out of my way to watch these days. The rest simply doesn't appeal to me, it's either just stupid, tasteless, or overly violent. I have too many other things on my plate to waste time with with mindcrap.

 

[Cees Alons]

Bingo! And, perhaps, add "relative". We're getting bored, strange enough: while flooded with new releases (books, films, TV programs).


Cees

 

[MarkHastings]

Jeff, I'll trust your word that 80-90% of music doesn't break even.

But knowing this, if only a minute percentage (let's say 5%) ends up making it big, why would the music industry be surprised that people aren't willing to pay for that other 95%?

Why are they surprised that people are willing to commit illegal acts because that 95% is utter crap and SO worthless that the only way they'll listen to it, is to steal it?

Why are they shoving 95% crap out there, looking for that 5%? When that 5% DOES hit, it makes it BIG! So instead of looking for just that 5%, why not make an effort to make that other 95% more desirable?Here's an interesting thought...The music industry doesn't mind spending the money on a bunch of bands because they know if one hits big, they'll make up what they lost from the other flops.

Now look at it from a consumer standpoint...We are expected to pay the same price for utter crap as we are expected to pay for the bands that make it big.

Also, as was mentioned, they also put out 'disposable' music that has no shelf life whatsoever. Why would anyone want to pay for something like that when they can get it for free, listen to it for a little while, then dispose of it without feeling they lost any investment? Consumers want longevity of most of their entertainment and they want their money's worth.

So while the music industry has found a method that ends up making them money, their methods PISS off the consumer because for every 100 CD's I buy, only 10 are really worth listening to all the way through and most of my CD investments, BOMB out BIG TIME, without any way of me being able to recoup my losses (unlike the music industry).

GEE! and I wonder why people don't want to pay for CD's?

 

[AjayM]

Don't buy 90 of them? Sell 90 of them? Go listen to the album before buying it?

Andrew

 

[Jeff Ulmer]

I don't think that is the case. If someone is willing to go to the trouble to locate and download something, there must be some value to it, however slight. There also doesn't appear to be a distinction between what is great, and worthy of support, and crap. Once someone gets used to getting their music at no cost, that's what they expect, good or otherwise, and once an album lands on your hard drive, what incentive is there to pay for the legit product, even if it is the most awesome album of all time?

 

[JohnRice]

In the U.S.? I don't think so. At least no commercially released, as in promoted by a regular studio. Now if you include the many that are sold direct by the artists, that's probably still an exaggeration.

Aside from that, I have to agree with pretty much everything Jeff saiid in his last post, which makes me kind of uncomfortable. Plus, the assertion hhe responded to that "crap" should be cheaper than thhe bands who "make it" is absurd. That could apply to movies and books and it would still make no sense. "Making It" is no sign of quality, subjectively, of course.

My opinion is that the difficulty to make a profit is almost entirely the fault of the studios themselves, so they have absolutely no reason to complain. Jeff has touched on some of this. The fact seems to be, even when the band themselves lose money on releases, thhe studio still ends up making a fortune since they charge their bands so much to produce recordings.

In Europe, there is an entire, massive, thriving music industry that never crosses the shores of the US. Last year the Dutch metal group Within Temptation released their latest album The Silent Force and to date it has sold slightly over 500,000 copies. This is considered an almost unbelievably successful album, since so many groups typically sell 50,000-100,000 copies. In the US, 500,000 copies would be considered a failure by pretty much any studio and would be a big money loss. Still, these groups make a profit. Maybe they don't make $50 million mansion profits for the groups or studios, but there is no reason that should be expected.

Illegal downloading aside, the US studios have created their own "demise". They have nobody to blame but themselves.

 

[MarkHastings]

It's too bad CD's weren't like clothing. If I buy a shirt, bring it home, put it on and decide "This doesn't look as good on me as I thought it would" - I can bring it back and get my money back. Too bad we couldn't do that with CD's.

I know it would be crazy to be able to return any CD you didn't like, but if there was a way for people to rate the discs and if the majority thought a particular disc was "CRAP", then REFUND!

 

[BrianW]

Eric, I appreciate your thoughts. I know artists still need the record labels for investment, expertise, and exposure. My only intention was to point out that this is becoming increasingly less so, and the record labels need to recognize this trend and adapt or die.

If most of what the record labels produce never yields a profit, then why not create a secondary download market for these essentially valueless assets? What does just sitting on these assets accomplish?

 

[JohnRice]

No, you just wouldn't go to McDonald's. You'd take your money to the place that was good.

 

[BrianW]

John, I believe that was written with the assumption that you wouldn't be able to tell whether the burger you paid $10 for would be worthwhile, no matter where you go out to eat, much like buying CDs today.

Here is a blog article that resonated with me. It was written by someone who's in the same position I am: A law-abiding citizen who respects copyright law and has, out of endless frustration, simply given up trying to buy music. Gone are the days when you could simply buy a CD and listen to it. Now you have to legally agree to onerous contract terms and restrictions, including allowing the content owners to turn off your ability to listen to the CD you purchased, at any time, without notice.

I especially like the part about musical instrument shops having to pay an annual royalty in case someone performs a copyrighted riff while trying out an instrument before purchase. If that's not a sign that the record labels have gone too far, I don't know what is.

 

[MarkHastings]

Yes, that was the comparison. Like going to a 5 star restaurant, paying $20 for dinner and 90% of the time, being served McDonald's burgers instead of Filet Mignon.

Or to make it more of a comparison to todays' CD's, paying for a Filet Mignon and only 5% of it is meat...the other 95% is all fat and "filler"

I hate having to but 15 songs to get only 1 good one. Do you think Dunkin Donuts would sell many donuts if they only sold them in dozens? And to add to that, imagine if you bought a dozen and 11 were stale!

 

[JohnRice]

That's fine, but the argument is pretty much invalid and to be honest, absurd. Now, if the situation was that you buy a recording of Beethoven's 9th and 9 times out of 10 when you open it up you find it is actually the latest release by Lindsay Lohan, that argument would hold up. Of course, that isn't the case. if you buy the latest Jennifer Lopez album, that is what you get. You may discover you don't like it all that much. That is the way it has always been.

 

[Brian Perry]

That's the way many forms of entertainment are priced, however. A ticket to King Kong costs exactly the same as a ticket to Cheaper by the Dozen 2, despite the fact one cost significantly more to make and will likely draw millions more viewers. That's just the business model. Would we be better off under a different system, where each product is priced according to its perceived value?

Getting back to the original topic, I think there is a good analogy to be made between the music business and the pharmaceutical industry. Drug companies, like the record labels, pin their hopes on one or two successful products for every ten that fail. And as CD replication is cheap, making the actual pills of a successful drug such as Viagra is basically nothing (relative to research and development).

Now imagine if technology somehow enabled consumers to download the exact formula of a wanted drug and make it themselves for pennies (like file sharing). There would be the inevitable--and justifiable--uproar by the drug companies, which if ignored, would lead to the companies going away since the chance for profits (the goal of any business) was gone.

To me, the argument having the most (only?) merit in favor of file sharing is the "exposure effect." It basically states that the ability to get free samples should increase music sales more than the loss created from people not paying. But even if true, doesn't the right to decide belong to the maker of the product, not the end user?

 

[BrianW]

Of course it does. As the copyright holders, the record labels are entitled to do anything with their property that they please. It is undeniably their property.

But the drug company analogy falls apart when you consider that drugs are patented, whereas music is copyrighted, and that with copyright comes protected fair use rights of the consumer. The labels need to find a way to profitably sell their wares without unduly stepping on our fair use rights. As referenced in the article I linked above, a CD so crippled by DRM that will play only on computers with Microsoft WindowsXP and MS Media Player isn't a product I, or a lot of other people, have any use for.

Would Viagra be nearly as successful today if Pfizer "licensed" the drug for use only on Stearns & Foster Queen-Sized mattresses?

 

[Cees Alons]

Cees

 

[Eric_L]

Consumers are not nearly as upset about file sharing limits as they are fair use. See Stearns & Foster Mattress example above.

 

[AjayM]

We've gone over this, but the cost to "make" music (ie to get it from the artists head to a CD) costs the same regardless of the final product and regardless if the music is "good" or "bad".

That is not the case with food/restaurant examples, a McDonalds quality burger does not cost the same as a high end filet.

The filet at Ruth's Chris costs about the same as the filet at one of the local steak houses, yet taste very different. I like one more than the other, I can't try them out before hand, I don't get some discount on one of them because I don't like it, if I only want 4oz of the 10oz steak I still have to pay for the 10oz steak, etc.

Andrew

 

[MarkHastings]

Ok, then what about ordering a high end filet and 9 times out of 10, the place burns it and grinds it up?

But I'll digress from the food comparisons because there are too many elements that don't synch.

Example, the only reason why the previous examples don't hold up in comparison to CD's is because of the cloning aspect of CD's. Also, you can easily keep going back to the same restaurant which you know is 'good'. Every new CD you buy, is like walking into a new restaurant for the first time. After MANY horrid experiences, you'd start to get frustrated about going out and eventually, the restaurant business would start to fail because of the vast amount of angry people. Imagine if everyone had only a 5% 'enjoyable experience' in dining out, but was never allowed to revisit the restaurants they had a great experience at...The restaurant industry would be suffering the same ordeal.

Again, the digital cloning aspect combined with "pissing off" the consumer due to lackluster releases and the 'bullying' of the RIAA, has led MANY people to not think twice about doing anything illegal.

When a potential 'crisis' is at hand, you change your business practices to compete against it, you "Entice" people, not "Scare" and "Threaten" them.

Just like the movie industry. With the invention of the TV, the movie industry realized that people might stop going to the movies because they could see the same thing at home, so what did the movie industry do? They made WIDESCREEN movies!, Cinemascope!, Surround sound!, etc.

And now that people are being able to build home theaters, what is the movie industry doing to save the business? IMAX presentations, IMAX in 3D!, Promotions!, etc.

I will admit that the CD companies did try something similar when they started packaging DVD's with their CD's. That was a GREAT step in getting people to purchase their product, but that was short lived and what else have they done???

What about putting coupons in the CD soundtracks to get money off the DVD of the same movie (for one)? And there has to be a lot of other things they could do, but they've been selling the same product (at the same cost) for the past 20+ years. Something's got to change. Either the price, or the business model.

 

[AjayM]

How do you compete with free?

Andrew

 

[MarkHastings]

They need to find a way. While a lot of people download because of money, there are a lot that did because there is no longer any value in buying a CD.

The whole point of the thread is, now that they've stopped most of the downloading, CD sales are still down. I for one will no longer buy CD's for just one song, so my buying habits have gone WAY down! In the past, I didn't mind paying CD prices for one song, but no longer will I after the crap that's been going on.

The CD industry is going to have to do a lot more to convince me back to buying CD's like I used to.