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Falling CD sales can't be blamed on P2P swappers

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Declining CD sales cannot be blamed on the rise of internet file-sharing networks, according to a new report into the state of the global online digital music industry.

The Organisation for Economic Co-operation and Development (OECD) report found a "pronounced" fall in overall global CD sales of 20 per cent between 1999 and 2003, while the number of simultaneous users on all peer-to-peer networks reached almost 10 million in October 2004.

Digital music piracy is acknowledged as a problem by the OECD but the report cites other factors - such as the rise in the number of entertainment sources - as being more likely to have had a significant impact on music sales.

"It is very difficult to establish a basis to prove a causal relationship between the size of the drop in music sales and the rise of file sharing. Sales of CDs, as well as the success of licensed online music services are likely to have been affected to some degree by a variety of other factors, for example physical piracy and CD burning, competition from other, newer entertainment products and faltering consumer spending in some markets," the report said.

And while there was a large fall in CD sales in the US, other countries, including France, Germany, Japan and the UK, actually experienced steady or growing CD sales.

The OECD questions the viability of some music download business models and warns that the music industry needs to find a balance between reducing online piracy and developing models that are attractive to consumers, as well as providing existing and new participants in the online music arena with a growing stream of revenue for the creation and legitimate distribution of original recordings.

The report said: "Online music providers still seem to struggle making profits at current prices, with demand growing from low levels and having to compete against unauthorized downloading. In the current, low-volume market, digital economies of scale have not yet been realized. Some of the fixed costs of labels to produce artists stay essentially the same as before. Moreover, the digital distribution of songs is far from costless."

Full Article.

They don't get it

I can't post at the full article's site, so I'll post here...

RIAA and the record companies simply don't get it. The reason CD sales are slipping is that today's music just plain out stinks. The record companies have all the power, and people likc Clive Davis push all the buttons. The artists don't control their music or their band's direction. When the golden era of Rock & Roll was going on (post-Sgt. Pepper through the mid 1980's), bands had more control over their material and destiny. The music was more important than the image. Unfortunately, MTV has ruined that. Even though MTV has long stopped playing music videos as they once did, they set the environment where being visually pleasing is far more important than actually being good at what you do. When was the last time we heard a new guitarist that 'wowed' us? When was the last time some band came out of nowhere to bowl us over? Today's artists are carefully crafted by the music industry, and they promote the garbage to death.

We'll never see the day when the next Led Zeppelin or Jimi Hendrix comes along. Those artists of that era actually had talent not only with their instruments, but in song writing. Now, everything is categorized into a genre or sub-genre and the music in each sub-category is pretty much all the same.

Many online downloaders talk about how online music sharing actually _increased_ their CD buying. Let's face it: Online file sharing often nets you an "iffy" encoding of the original file. Sometimes there are digital artifacts and screeches. Sometimes, it was just a poor encoding of it. Actually buying a CD gets you the non-compressed original that plays well.

They simply don't get it. I will not buy anything with DRM. I want to be able to move the file around from my computer, to a CD, and to my mp3 player. I want the ability to listen to my music in any form and on any medium I have at my disposal. I also don't feel that RIAA and the record industry deserve as much or more for the digital form of music, when their cost output is far less and the artists don't get a cent more.

RE: They don't get it

Yeah true. MTV used to be about music. Now its about eyecandy (or should I say "ass-candy") and reality shows that have nothing to do with music. "Pimp My Ride", "Punk'd", "Real World", "Newlyweds", etc. (All that crap that my sister used to watch but eventually got bored of.)

By the way, it looks like they're gonna give up on DRM...
http://www.reuters.com/article/technologyNews/idUSN0132743320071203

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