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Murk
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Don't believe the hype
| Quote: | Okay, show of hands: who in the past year or so has had a friend or relative come to them with an article claiming the death of the music business?
It?s usually followed by comments like, ?I think you should really reconsider this music thing. Take that job with my uncle doing carpet
installations. People always need carpet.?
Does this sound familiar? Hands high. I?m counting. Yes. I see there are many of you.
And I?m sure you?ve also felt somewhat handicapped for a snappy response. In your heart you love what you do and you know that you should pursue it,
but where are the words and facts you need to tell them to step auff?!
I have grown ill listening to pessimists blabber on about the ?dying industry.? What sales reports are they reading? The business has earned more new
revenue between 2004-2006 than ever before. The RIAA has called the file-sharing of music, ?a public rapping.? They claim that piracy has cut sales by
almost 30% over the last few years, and yes, any fool can see that file-sharing has affected the business. But has it been in a negative way? Has it
really cost the labels ?big money? and is the business really suffering because of it?
No. Quite the opposite. I?ll tell you a secret. Revenue is not really down at all.
In 2005, album sales were 618 million units. In 2006 they dropped to 588 million. A 5% drop. Not 30%. Not even 10%. And this was only in the US, which
saw the worst drop off compared to the rest of the world. Extremely negligible numbers and better than other industries like computer and automobiles
who in the US have experienced bigger reductions in gross revenue.
Okay. I hear you out there reading this. You?re saying, ?But 5% a year adds up. Doesn?t that mean they?ve lost money and isn?t that a bad thing.? No
because that 5% is more than made up for. The Warner Music Group, said in their annual report that recorded music sales for the fiscal year 2006 rose
almost 3 percent, to $3 billion, and that digital revenue had more than offset the drop from CD?s.
Let me tell you a few more secrets: what the RIAA doesn?t include in ?lost sales.?
-- They don?t include CD sales of independent artists, only a decline in sales of titles on major labels. Indie sales make up about as much market
share as all of Warner Music Group, which is about 20%. So they are not including album sales equivalent to all of WMG in their calculations of ?lost
sales.?
-- They don?t include the approximately two billion legally paid for downloads from iTunes, Yahoo e-Music and many others. These are not CD?s,
technically, so they don?t count them in ?reduced album sales? even though record companies are getting hundreds of millions in new revenue from these
sales each year. Also worth noting is that there has been a 71% increase for these types of sales. (2005: 353 million units, 2006: 582 million units.)
-- They don?t include the fact that the licensing fees for getting a hit song in a soundtrack has increased over 1000% since 1995 (climbing from about
$80,000 to about $1,000,000) with no additional hard costs to the label.
-- They ignore the tens on millions of ringtones that have generated about .30 cents each in new revenue (about $90,000,000) for labels in the past
three years and due to a new ruling in the copyright office, will increase to about .50 cents for each sale in coming years.
-- They are omitting the fact that downloaded music has virtually no manufacturing costs, nor are there any returned or damaged merchandise (with rare
exception). So, in essence, record companies make substantially higher profit margins on newer sales.
So, when record executives give interviews that bemoan the pending death of the music business to me they just sound like old school farts, trying to
crawl back into some decomposing chrysalis.
Look carefully at their credentials. Most of them were recently fired from their cushy, six-figure A&R jobs. Why? Because, labels are re-tooling for
the new millennium; streamlining their staff. You no longer need a team of A&R executives making an average salary of $175,000 a year, with expense
accounts for travel to hear a new act. Why bother when you can have three 20 year-olds for $30,000 a piece doing the same job by searching MySpace.
Plus, while A&R departments are being trimmed, Human Resources is busy filling seats in the ever expanding Licensing Departments of major labels. Why
don?t you read stories about that?
Mass firings on the A&R side does not equal a dying business. It equals a changing business.
We don?t have cobblers anymore either, but we still have a shoe industry.
Nuff said |
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DAK
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Public enemy???
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DAK
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Flavor Flav
BOOOYYYYEEEE
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MyOwnWay
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I dont know who wrote that article but its bullshit. Purchasing digital downloads helps some, not even all, major labels. But they are only factoring
in the key majors currently. MCA when out of business with artists being aquired (or dropped) by Geffen years ago. And I know of several indie labels
that went under. All due to this "shift" that this article talks about, but is only factoring in safely three or four major labels.
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Murk
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| Quote: | Originally posted by MyOwnWay
MCA when out of business with artists being aquired (or dropped) by Geffen years ago. And I know of several indie labels that went under. All due to
this "shift" that this article talks about, but is only factoring in safely three or four major labels. |
i see what you're saying, but to me, the article seems to be stricly talking about the "hype" of "people don't buy music anymore" and "there is no
money to be made making music". for example, when i bought the 2 Comeback Kid CDs at the GB show, i don't think SoundScan registered that. some
labels are having problems, but it's not because people don't care about music anymore.
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Discipline
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I'll never understand downloading. I need the whole package.
‘Do you know what a love letter is? It’s a bullet from a fucking gun. Straight through your heart.’
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Jason the Magnificent
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At over 1000 CD's and almost as much vinyl I love downloading...shit starts taking over whole rooms of your house.
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Discipline
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I enjoy that it takes up so much space, I enjoy looking at it all.
‘Do you know what a love letter is? It’s a bullet from a fucking gun. Straight through your heart.’
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Murk
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| Quote: | Originally posted by Discipline
I'll never understand downloading. I need the whole package. |
for me, it's like this. for YEARS and years i spent a lot of money on music, only to have about 25% of it be stuff that i really liked and continued
to listen to over the years. now, i am able to boost that number up to 100%. sure, there are some bands, i'll buy no matter what, but now whenever i
spend my money i know for sure that it's a solid purchase for my tastes.
for example, my last birthday coincided with Tower Records closing and marking everything down 30-40%. i spent over $200 and every single CD was a
sure bet. i don't like guessing or hoping i like something when it comes to spending money on music.
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upyerbum
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| Quote: | Originally posted by Discipline
I'll never understand downloading. I need the whole package. |
I'mn a merch hound too. Gotta' have pictures.
Well, its this place where nobody works, and the pigs don\'t give you any shit. Everyone smokes weed and gets drunk all day. Its a place where
cunts like me and you can truly take it easy and relax. Know what I mean?
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Discipline
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| Quote: | Originally posted by Murk
| Quote: | Originally posted by Discipline
I'll never understand downloading. I need the whole package. |
for me, it's like this. for YEARS and years i spent a lot of money on music, only to have about 25% of it be stuff that i really liked and continued
to listen to over the years. now, i am able to boost that number up to 100%. sure, there are some bands, i'll buy no matter what, but now whenever i
spend my money i know for sure that it's a solid purchase for my tastes.
for example, my last birthday coincided with Tower Records closing and marking everything down 30-40%. i spent over $200 and every single CD was a
sure bet. i don't like guessing or hoping i like something when it comes to spending money on music. |
I always liked looking through the record or cd bins at the store. I liked the idea of buying something because it had a cool cover, or some other
equally stupid reason. Sure you get some duds, but it's a way of discovering some great new bands.
Plus most bands have myspace pages and such where you can preview a few tracks and make purchases based on that.
An example of a stupid reason for buying a record; years ago I bought a record because I thought the band had a cool name. They quickly became one of
my favorite bands. The album was Do or Die by Dropkick Murphys.
‘Do you know what a love letter is? It’s a bullet from a fucking gun. Straight through your heart.’
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Murk
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| Quote: | Originally posted by Discipline
An example of a stupid reason for buying a record; years ago I bought a record because I thought the band had a cool name. They quickly became one of
my favorite bands. The album was Do or Die by Dropkick Murphys. |
i've easily spent over $1000 doing that without the good results.
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Muttley
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That article only tells maybe 1/4 of the real story.
The real issue is that the MUSIC BUSINESS is not dying or dead, MAJOR LABELS are dying. The whole structure of major labels is so top heavy that while
the salaries for the top dogs keep rising, the profits aren't balancing it out. The profits need to be MUCH higher for them to maintain the system as
it's been for the past few decades (especially since the 80's when MTV/music video became part of the equation). Combine that with the interest in
smaller labels (who will market you properly and not lose you in the shuffle as quick as a major) and you can see the issue. Now that you don't NEED a
major label to get your music out to the world, they're quickly losing ground.
| Quote: |
-- They are omitting the fact that downloaded music has virtually no manufacturing costs, nor are there any returned or damaged merchandise (with rare
exception). So, in essence, record companies make substantially higher profit margins on newer sales. |
This is bullshit. Let's do the math here:
A CD bought in the store usually costs 18 bucks, sold by the label to the retailer for say $11 or $12. The manufacturing is usually between $1 & $2
per disc. So total profit for the label is say $10. At this point damaged merch usually gets eaten by the retailer (this started happening in the past
5 years because of the big box places) so that doesn't factor in.
Downloads are a buck a song, figure a 10 song album is $10, and the label won't see all of it (ITunes or whatever online retailer will take a
percentage). More importantly, most people only buy a song or two instead of the full album, so you're talking about a much smaller amount then that
$10.
Bottom line: way less profit from the download.
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Murk
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| Quote: | Originally posted by Muttley
The real issue is that the MUSIC BUSINESS is not dying or dead, MAJOR LABELS are dying. The whole structure of major labels is so top heavy that while
the salaries for the top dogs keep rising, the profits aren't balancing it out. The profits need to be MUCH higher for them to maintain the system as
it's been for the past few decades (especially since the 80's when MTV/music video became part of the equation). Combine that with the interest in
smaller labels (who will market you properly and not lose you in the shuffle as quick as a major) and you can see the issue. Now that you don't NEED a
major label to get your music out to the world, they're quickly losing ground. |
BINGO!
| Quote: | Originally posted by Muttley
Bottom line: way less profit from the download. |
but the quote you posted says "profit margin" is higher, not amount of profit is higher. in order to get your music to an online retailer, all you
need is a recording. you don't even need to press a single CD or incur any of the costs associated with that.
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Muttley
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I take this issue pretty personally since I've worked for labels and within the industry for pretty much my whole life. And I was laid off by Capitol
Records when that Napster shit really took off. So as an artist AND an industry employee I try to keep track of all this shit.
"Profit margin" is a bullshit term anyway. It doesn't get the issue across. Making more profit off a 99 cent download doesn't mean shit when your
overall profits are way down from previous years. When you're talking about all these industry fat cats with their condos, car services and expense
accounts, it definitely doesn't balance out.
Read THIS article: http://www.rollingstone.com/news/story/15137581/the_record_i...
I'm not crazy about Rolling Stone magazine but this article is amazingly written and sums it up better than anything I've heard/read.
Another thing to think about with all this download shit..... It's never gonna take over, there will ALWAYS be CDs or some kind of recorded media.
Why? Because touring bands can't live off downloads.
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Murk
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| Quote: | | I take this issue pretty personally since I've worked for labels and within the industry for pretty much my whole life. And I was laid off by
Capitol Records when that Napster shit really took off. So as an artist AND an industry employee I try to keep track of all this shit.
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that sucks, but i really think the Major's shot themselves in the foot with that whole Napster thing. i also keep close tabs on this whole thing. i
don't think people slowed down buying music, they just stopped buying the Major's crap.
i mean c'mon. a multi million dollar industry lets a 19 yr old college kid beat them to the punch and completely change the playing field? these
people had the money and the resources to do it first. they either didn't see it coming or ignored the warning signs. call it ignorance, resistance
or greed, but the Major's got caught snoozing, they made their bed, but didn't want to lay in it.
| Quote: | Originally posted by Muttley
there will ALWAYS be CDs or some kind of recorded media. Why? Because touring bands can't live off downloads. |
and because there will always be people like Discipline. and because there will always be people too stupid to use computers. and because there will
always be people who can't afford internet or a computer. the list goes on.
here's something that i struggle to get people to understand. my CD purchasing went up after getting access to Napster and other file sharing
sources. yep, that's right. after forking over thousands of dollars with only a small stack of CDs that i truly liked, i was so burned out and
cautious that i barely bought CDs in the year or 2 before Napster. once i had the ability to preview the CD in its entirety, i went from a CD every
other month to 3-4 per month, sometimes more. now my money exclusively goes to the artists and labels that deserve it.
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BDx13
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first off, great thread.
real quick, murk, i don't know the percentage that actually do it, but some bands do submit CD sales from the road to be included in soundscan.
i gotta come back to this thread. too busy right now.
If I fail math, there goes my chance at a good job and a happy life full of hard work.
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Murk
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| Quote: | Originally posted by BD
real quick, murk, i don't know the percentage that actually do it, but some bands do submit CD sales from the road to be included in soundscan.
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yeah, i've heard of that, but doesn't it cost money to do that?
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Muttley
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The label has to already be registered with Soundscan. I'm not sure if it costs extra to do field reports but yes, most touring bands do report the
sales back to their label, and in turn the label submits them to Soundscan.
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Murk
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| Quote: | Originally posted by Muttley
The label has to already be registered with Soundscan. I'm not sure if it costs extra to do field reports but yes, most touring bands do report the
sales back to their label, and in turn the label submits them to Soundscan. |
how do they do checks and balances on that?
what's stops anybody from lying?
just curious.
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Muttley
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http://www.soundscan.com/venue.html
It's a $500 annual fee to report venue sales. They mention that you will need proper documentation to verify sales. I have no idea what that means.
Other info I've come across makes it sound like you can pad your numbers a bit but it won't matter too much. To even get involved with Soundscan you
need a label willing to pay their fee, and by that time you're probably selling at least a LITTLE something and padding the numbers won't matter.
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XHonusWagnerX
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| Quote: | Originally posted by DAK
Public enemy??? |
| Quote: | Originally posted by REV.PAULIE
HONUS-as much as i can't stand a great deal of what you really like (for my own reasons that i would never hold,nor impose,against you),YOU FUCKING
RULE!
YOU,HONUS,IS WHAT MAKES THE "EDGE" COOL.
YOUR FRIEND,
PAULIE |
check out my post contributions at www.VinylNoize.com
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Murk
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i think i read this back when it went online, but i went ahead a read it again.
it looks like a lot of it agrees with me.
| Quote: | | So who killed the record industry as we knew it? "The record companies have created this situation themselves," says Simon Wright, CEO of Virgin
Entertainment Group, which operates Virgin Megastores. While there are factors outside of the labels' control -- from the rise of the Internet to the
popularity of video games and DVDs -- many in the industry see the last seven years as a series of botched opportunities. And among the biggest, they
say, was the labels' failure to address online piracy at the beginning by making peace with the first file-sharing service, Napster. "They left
billions and billions of dollars on the table by suing Napster -- that was the moment that the labels killed themselves," says Jeff Kwatinetz, CEO of
management company the Firm. "The record business had an unbelievable opportunity there. They were all using the same service. It was as if everybody
was listening to the same radio station. Then Napster shut down, and all those 30 or 40 million people went to other [file-sharing services]."
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| Quote: | | Even worse, the record companies waited almost two years after Napster's July 2nd, 2001, shutdown before licensing a user-friendly legal
alternative to unauthorized file-sharing services: Apple's iTunes Music Store, which launched in the spring of 2003. |
| Quote: | | Despite the industry's woes, people are listening to at least as much music as ever. Consumers have bought more than 100 million
iPods since their November 2001 introduction, and the touring business is thriving, earning a record $437 million last year. And according to research
organization NPD Group, listenership to recorded music -- whether from CDs, downloads, video games, satellite radio, terrestrial radio, online streams
or other sources -- has increased since 2002. The problem the business faces is how to turn that interest into money. "How is it that the people that
make the product of music are going bankrupt, while the use of the product is skyrocketing?" asks the Firm's Kwatinetz. "The model is wrong."
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but all of this is talking about the Major's. people are spinning these key concepts into a "there's no money in music" slogan, across the board. i
don't hear any complaining from Dischord. it doesn't look like Roir or Caroline want to part ways with their Bad Brains and Misfits masters. SST
stays in business with releases over 20 years old.
| Quote: | | About 2,700 record stores have closed across the country since 2003, according to the research group Almighty Institute of Music Retail. Last year
the eighty-nine-store Tower Records chain, which represented 2.5 percent of overall retail sales, went out of business, and Musicland, which operated
more than 800 stores under the Sam Goody brand, among others, filed for bankruptcy. Around sixty-five percent of all music sales now take
place in big-box stores such as Wal-Mart and Best Buy, which carry fewer titles than specialty stores and put less effort behind promoting new
artists. |
labels created their own wound by offering shitty product over the years, then they attacked the people who had been giving them money for sub-par
product in most cases, then "Big Box" stores helped keep it open until it got infected. the labels and the "CorpMarts" killed the record stores, NOT
DOWNLOADING.
call your customers thieves, when all too many of them have been getting burned, who were just trying to check out some music and it's amazing what
will happen. yes, there are people who never buy because they can DL, but they are few and they were the ones that always wanted a copy on CD or
tape, instead of the real thing.
another topic that gets left out frequently is used CDs. that affects an artist's and a label's ability to profit. it affects new CD sales. if you
trace the rise in used CD merchants over the last 10 years, this too appears to be a factor. i'd bet there's some interesting data to be found in
artists' whose CD tanked and their presence in the used CD market. everyone i've talked to about buying CDs expresses a great fear in buying a shitty
CD.
it all comes back to the price and the savings buying used. why? because buying used alleviates the sting of paying money for a bunk CD, imo. the
people i've talked to over the years who work for Amoeba Records (a huge warehouse sized record store on Sunset Blvd) all say that without the used
music departments, they would go under.
i have a friend that talks shit about people who DL, but he REFUSES to purchase a CD brand new. he only buys used. period. i, on the other hand,
refuse to buy a used CD unless it's out of print.
the last used CDs i bought were:
Die Hard - Looking Out For #1
Headfirst - Enemy
Outface - Friendly Green
Underdog - Vanishing Point
alright, i'm done.
sorry for the long post, but i like talking about this.
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Muttley
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You and I are pretty much saying the same thing.
Here's the summary:
Major labels are structured top heavy and now they're collapsing because their structure can't support the top anymore. The profits just aren't there
due to download pricing, among other factors.
Major labels fucked themselves by being greedy and fighting the technology, which was a losing battle.
Small labels are making big gains thanks to the technology (Myspace, etc).
Bands are more interested in the small labels. Assuming they bother with a label at all. They don't necessarily need it.
The brick & mortar retailers suffered the most, because the record store barely exists in this day and age outside of large cities (like NYC, LA,
Philly, Baahston, etc). Customers suffered from this too: the big box stores are the only place to go and they have a limited selection, so that
pushes MORE people online.
Another thing worth mentioning here: while a lot of us older folk love having something in our hand with artwork and everything, you'd be shocked at
how many young people ONLY download music and don't purchase hard goods AT ALL. My niece is 14 and buys all her music on iTunes, has no interest in
buying a disc when she can just get the songs she likes. I think it's terrible, but this is how a lot of the young 'uns are doing things nowadays.
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Murk
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| Quote: | Originally posted by Muttley
you'd be shocked at how many young people ONLY download music and don't purchase hard goods AT ALL. My niece is 14 and buys all her music on iTunes
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here's what's worse than that.
the mp3s that iTunes sell are FUCKING GARBAGE quality.
i've checked their rips against "group rips" and my personal rips.
they use AAC at 128, possibly without the intermediate WAV file.
the underground standard is an EAC-LAME rip at V2.
V0 is the best you can get under 320.
V8 is the lowest, unless you use the "speech" preset.
most people can't tell the difference between V2, V0 and 320 when you use LAME.
i gave me and my gf an A-B test on LAME mp3s vs. the orignal WAV files.
she didn't make it past V4, i made it to V6.
i guarantee that the opinion would be unanimous if you had people listen to an iTunes mp3 vs. an EAC-LAME-V2 on a home stereo.
sorry for the nerd talk.
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