The Industry That Cried Wolf

030214_compact_disc.gif You’ve got a credibility problem when Business Week — which, to paraphrase “The Insider,” is not exactly a bastion of anti-capitalist sentiment — cries foul over the numbers you use to blame your industry’s poor health on digital piracy. The music business, as embodied by the universally loathed Recording Industry of America, has just that kind of problem, as evidenced in Business Week journalist Jane Black’s scathing examination of their claim that the devastating 7.2% drop in CD sales for the first six months of 2002 can be laid squarely at the feet of, well, you and your damn computer.Citing a report posted at the admittedly crunchy Mac Wizards Music, Black reports that the decline can be attributed at least in part to these factors:

  • In 2002, the industry shipped at least 14% and as much as 25% fewer titles.
  • From 1999 through 2001, the average price of a compact disc rose 7.2% although consumer inflation remained virtually flat.
  • The decline in compact disc sales coincides with the rise in “new, compelling forms of entertainment” such as DVD players. Black cites an example in which the cost of the movie “High Fidelity” on DVD costs just $1.01 more than its soundtrack — a clear value disparity.

The article goes on to talk about how the industry’s faulty numbers have nevertheless inspired looming, draconian remedies from government. Black concludes that “ it seems irresponsible for music-industry officials to present these sales statistics as proof that piracy is overwhelmingly responsible for the industry’s woes while conveniently ignoring the economic and technological context that puts those numbers in perspective.”

All of which confirms to me that, Hilary Rosen or no, the RIAA holds the consumer public in hideous contempt and it certainly dissuades me from making any purchases that might in any way benefit that organization. Of course the real crux of the matter is not that the music industry is losing money, but that they are losing control of the means to make money. They could easily recoup their losses by lowering the price of CDs and making up the revenue via sheer volume, but ultimately they know that digital distribution will completely decimate their business model. All of the legislation, lawsuits and rhetoric they’re spewing is clearly aimed at appropriating control of those digital distribution channels for themselves, i.e. they don’t want music bought, sold or listened to unless it has been authorized by the RIAA.