Why the Record Industry Doesn't Stand a Chance

Newhouse News Service ^ | Aug. 19, 2003 | JAMES LILEKS

[SamAdams76]

The whining from the RIAA about how much money they are losing is one of the biggest scams ever perpetrated upon the American people.

According to my trusty BILLBOARD, the "bible" of the recording industry, over 345,000,000 albums have been sold so far as of 8/3/03. That is a staggering amount of albums considering the outrageous price they are charging for them.

Imagine how many albums would be sold if they were sold at a fair price?

For years, the recording industry has fooled consumers into thinking they were getting "state-of-the-art" technology with CDs and so they willing paid the grossly inflated price. The RIAA had the consumers thinking that producing CDs was a very complicated and expensive process.

The consumers were disabused of these notions over the past few years as they have slowly discovered that CDs are in fact extremely cheap and that they have been getting ripped off all these years.

Consumers now have very inexpensive CD burners in their computers and they can get a stack of 100 blank CDs for less than the price that the RIAA charges for a single pre-recorded CD.

When consumers are getting gouged like this, who can blame them for being upset?

If a consumer can burn a CD at home for about 10 cents, how much do you think it would cost the recording industry to mass-produce them taking advantage of economy of scale? Fact is, the recording industry can produce pre-recorded CDs for under a penny a piece. You heard right. When CDs are mass-produced, the cost is under a penny per CD. Then of course, you need to add the cost of the jewel box and the booklet with liner notes and artwork. But still, we are talking a total cost of well under $1 per CD.

So why is the recording industry still retailing the CD at some $15.98 per album?

Many of us can remember when pre-recorded VCR tapes costed $90. Not many of us bought them but we flocked to video rental stores where we rented them for a few dollars a night. This did not make the movie industry a lot of money. They sold the $90 tapes to video rental stores who then rented them out. Once the initial cost was recovered, it was pure profit for the video rental store from that point on.

Well the movie industry came up with a concept called "sell-through." Instead of selling a few $90 tapes to rental stores, they decided to sell millions of $20 tapes (and later DVDs) to consumers through giant retail chains like Best Buy and Wal-Mart.

The result was that the movie industry made money hand over fist. They began making more money on many titles from video/DVD sales than on box office receipts. In fact, many a box-office flop became a video/DVD moneymaker.

See, the movie industry adapted to the changing marketplace and made a killing. Meanwhile, the RIAA is desparately trying to cling to an antiquated business model. They have the potential to make billions upon billions of dollars by offering their songs online a la carte for a reasonable fee and by dropping the price of their CDs to about the $5 pricepoint.

If they adopted the $5 pricepoint for a CD, they would be flying out the door. They would more than make up in volume what they lose in per-unit profit. But they are too bull-headed and stupid to see this opportunity.

Imagine if you could walk into a record store tomorrow and see the Beatles "Revolver" for $4.98? Or Pink Floyds "Dark Side of The Moon" for $4.98? You would be standing in line at the register for 15 minutes behind about 100 other people. I guarantee it.

[Afronaut]

"Why is the Beatles 'White Album' still selling for $29?? "

Meatloaf Bat out o hell has been 10 bucks for years. It should be 3.99

[SSN558]

Recording theft will kill music, not just music companies.

It will only kill the format, and the recording industry is the entity that chose that format.

[Age of Reason]

Every time you go home you should pay the carpenter.

But then carpenters would "earn" their money the same way rock superstars do.

[George W. Bush]

No matter how many times I've been told that CD's are better quality recordings, "Good Vibrations" by the Beach Boys still sounds better on my 1952 all tube, monoural Zenith FM.

Your ears are correct.

An analog is much closer to true sound. With a CD, you get 44 thousand samples per second whose resolution is in 65536 units. And no more. Naturually, this is merely an approximation of a truly full sound.

The digitally-remastered craze was just a marketing gimmick to sell the players. And people liked the smaller and somewhat more durable format of the CD. But the sound was never as good as good quality analog with well-cared for records.

But don't worry. They'll come with the 32-bit DVD-Audio to replace the 16-bit CD-Audio standard. They will claim (finally with some justification) that it is a superior system. And except for a very few people with extremely good ears and high-end equipment, it will be better.

But just think how many people they rooked by selling them the same old albums. First on vinyl, then on cassette, then on CD, now again on DVD-Audio. Same thing goes for video and DVD and the upcoming HDTV DVD discs.

It's all a big scam to keep selling you new players (profits for the player manufacturers) and new "digitally remastered" crap you've already bought before. But then, "digitally remastered" is a total profit segment. They don't pay the artists squat for album sales anyway and every one of these remastered discs is pure profit for them. They don't even incur advertising costs to promote it.

I know it's vulgar to depict this as being all about the money. But it is vulgar. And it is all about the money.

BTW, you can get decent sound cards with mixers that have a higher audio sampling rate. If you want to record or convert your vinyl (just in case), you can store stuff now at a very high bitrate. That overcomes many of the problems with digital music. And it will get better in coming years as they bring newer and cheaper players to market.

Even some of the modern, alt-country artists like the Jayhawks, Son Volt and Wilco (who, by the way are a good example of how filesharing actually helps musicians) sound way better played on tube equipment. I've tweaked the equalization on Windows Media Player to try to approximate this, but I can't even get it close.

Keep your old stuff. Take good care of it. You'll never be able to get any more like it. Consider yourself lucky. Kids today don't even know about the golden age of analog electronics. We have wonderful stuff and neat tech stuff today. But good as it is in features and miniaturization, your analog stuff is like cruising in a heavy battleship and the new stuff is like a bunch of PT boats with gaudy paint jobs.

[WOSG]

"Even when you can get younger people to listen to long lyricless music they tend to want someone they can identify with, somebody that's been dead for 300 years doesn't cut it. These two effects have seriously limited the audience for classical."

Hmm, I dunno, I've liked classical music since I was a teenager, and even a few decades on 'discover' a new composer or two to like (eg Elgar a few years back).

There is an audience for it, but it's not a come-n-go audience that can be milked via a marketing/hype machine like InSync. The closest I got was joining Columbia house classical music club for a year or so. After your top 30 picks, it gets kind of 'so what'; marketing anything non-new is kind of a self-limiting market.

Now I find the "new" music in that realm are good soundtracks. I like Han Zimmer, especially Gladiator soundtrack; another favorite is Horner's Braveheart. And Schindler's List (John Williams I think did that, of star wars fame). All three are decent lyric composers.

[WOSG]

It is somewhat comforting that thanks to FR, I can sample the NYT without paying those CLYMERS and DOWDS the privilege.


I guess what we need for songs is a "fair use" doctrine that lets us listen to the first 3:15 and the last 3:15 and a 2 minute 'sample' in the middle. :-)

I wonder how a sample of Stairway to Heaven would sound like under that scenario.

[general_re]

An analog is much closer to true sound.

Careful - that way lies madness ;)

[RWG]

I used to be a consultant, until it made me feel too dirty.

Consultant is a vocational category to make nice the concept of fraud, useless, extortion, and too lame to work for the government.

[WhiteGuy]

There's very little that's worth downloading today.

You're correct.

I mostly look for older or obscure tunes.

Last time I looked at my local CD store, they didn't carry ANY CDs by The Tubes.

[Jim Noble]

before Disney paid off Congress to make it 90years

It would do more for the nation to see Berman and Hollings led out of Congress in handcuffs than any possible "campaign finance reform".

[Jim Noble]

But then, you should understand that I consider the modern music industry and Hollyweird to be so despicable that I will advocate destroying them by destroying their revenue streams by almost any means possible

Right on, bro.

[xzins]

Theft is always an illegitimate taking of someone else's personal property.

Those who've complained to FR about preserving their property rights have had them preserved.

Those who put their product out in the public domain with no expectation of remuneration cannot, by definition, have that property taken.

If you check the source addresses for most articles on FR, you'll discover that the articles are posted as free for the taking. The fact that they appear on FR is actually a benefit for those organizations in that multiple thousands see their articles and over time are more likely to navigate to their website and produce "hits." It is "hits" that generate advertising income for many of these websites.

[George W. Bush]

If you check the source addresses for most articles on FR, you'll discover that the articles are posted as free for the taking.

No. Here at FR, they are not accompanied by the ads which support the website paying the syndication fees for the articles. And no cookies are planted for building consumer profiles for demographics/marketing information for resale or for internal marketing info.

Posting the article at FR deprives them of their revenue. Plain and simple. And it's even worse for the online versions of print articles.

[xzins]

If they weren't in the public domain, I'd agree with you. But they are in the public domain.

[1Old Pro]

They'll sniff that the musicians should give away the product and make their money touring, which is akin to saying restaurants should give away food and make their money selling souvenir forks.

Nope, they give away the food and make their money on drinks. But the no-smoking laws is hurting the drink sales at the bar so they will simply go out of business.

[George W. Bush]

If they weren't in the public domain, I'd agree with you. But they are in the public domain.

Let's look at the source page for this very article where it says: "Click to buy this page".

COMMENTARY

Why the Record Industry Doesn't Stand a Chance

BY JAMES LILEKS
c.2003 Newhouse News Service

Yes, they're selling it. Did FR pay them? Did the person who posted it here pay them? No.

At this point, you should recognize that this article was not lifted under any fair use and the sale was circumvented and their copyright violated. We probably won't get sued but you'd better think about that commandment you lectured us on.

[1Old Pro]

"Why is the Beatles 'White Album' still selling for $29?? "

Meatloaf Bat out o hell has been 10 bucks for years. It should be 3.99"

Why not change copyright law on music et al to make it like the pharmaceutical industry.

Copyright protection for 10-15 years and then allow generic competition.

[mhking]

The RIAA is so concerned with trying to cram the genie back in the bottle, that they've become irrelavent. The technology has passed them by, and people are finally beginning to see them for the "protection" racket they actually are.

[xzins]

It looks like I'll only be able to participate on those that are in the public domain. Gotta leave this one.