Apple Holding Back the Music Business? 705
conq writes "With average weekly download as of Nov. 27 sales down 0.44% vs. the third quart, BusinessWeek speculates that Apple might in fact be holding back the music industry." From the article: "As has been true since the start, iPod owners mostly fill up their players from their own CD collections or swipe tunes from file-sharing sites. Now legal downloads may be losing their luster. According to Nielsen SoundScan, average weekly download sales as of Nov. 27 fell 0.44% vs. the third quarter. Says independent media analyst Richard Greenfield: 'We're not seeing the kind of dramatic growth we should given the surge in sales of iPods and other MP3 players.'"
Absolutely Correct (Score:2, Interesting)
0.44%!!! (Score:2, Interesting)
Faulty reasoning from the start (Score:4, Interesting)
What exactly is this generalization based on? It basically implies that all individuals owning an ipod/mp3 player are copyright infringers from the get go. Then, just because sales are down for a quarter, it's the sign of the Apocalypse! Are they not teaching logic in schools anymore?
It's more like (Score:3, Interesting)
This piece comes off more as a paid attempt by the music industry to weaken Apple's position and power. Anyone who has been following the news knows that there is a bit of a mini-power struggle going on between Apple, who wants to keep things affordable, and the music industry. While I certainly think Apple could do better than they have been, at least they are thinking ahead and pushing in the direction music and consumer tastes are moving towards instead of clinging to the past model like the RIAA has, which has done nothing but hurt them the last 10 years.
Won't buy from ITMS because the quality is poor (Score:3, Interesting)
The 128kbps AAC files from the ITMS don't do it for me. They sound highly compressed and you can occasionally here aural artifacts in the high-end, like flanging in the cymbal washes. It's a lot worse with 128kbps mp3s, for sure, but the quality just isn't high enough for me to even spend a dollar there.
It's DRM thats holding back the music industry (Score:1, Interesting)
Perhaps its about time the music companies realised that people want to be able to do as they like with the music they've bought and paid for.
It's not Apple thats holding back the music industry... its the music industry thats holding themselves back with their insane protection schemes.
Not in my household (Score:5, Interesting)
Our reasons for buying less music is:
1. Dislike of Sony and the RIAA -- where we used to buy 3-4 CDs a week at Borders, we're lucky to buy even 1 a month because of their strongarm tactics. Until Borders starts carrying the popular indie bands in their area, we won't buy CDs. Some indie bands in our area have sold 2000+ CDs privately without record store support. If they expect to be part of my community, they better do more research.
2. Bigger support of the ma-and-pa brick and mortars. As our retail stores that we own lose business to the dotcoms and the super stores, we've found that by supporting other locally owned shops, we see more locally employed customers at our stores. It is the ultimate "outsourcing" to see your community spending money outside of the community to save on sales tax and maybe a 5% difference in price beyond that. 14% is still a huge savings, all from government coercion.
3. Income. Our income this year is about double the last 3, but our income in the last 6 months is down over 70%. I've been putting more of my income into real savings (gold, silver, property) to weather to storm ahead. I've also expanded my market from just-the-Midwest to the entire world, and I expect it will take a year or two to get back to my first half of 2005 income levels.
4. Quality. The quality of the mass produced records is terrible. I can't listen to the top 40 record stations at all -- every vocalist is enhanced, delay and reverb is worse than the 80s, and the compression destroys any fidelity that might have made it through the overproduction period. Garbage in, garbage out, garbage unbought.
5. Promotion. I don't feel any desire to pay $50 to see a concert of 3 bands I barely know. The indie scene is usually $6 to $12, I see 2 amazing bands and 3 new bands cutting their teeth. $2 beer, $4 calls instead of the big shows where we paid $14 for a drink recently ($110 per ticket). Without cheap promotion the records won't sell.
6. Collusion. Try to get tickets today to any popular show. The rules governing ticket scalping are created specifically to take care of the few scalpers who are licensed by the local government. It has made shows nearly impossible to attend to. One popular show we were willing to pay $60 per ticket for was sold almost entirely to 3 ticket scalpers.
7. No desire. There are so many new ways to be entertained (due to the web) that music-on-CD just won't cut it anymore. I've been talking to a local show producer who is finding better ways to stream live shows to the web in a high quality, high fidelity, well produced show. I can't wait for his work to come to fruition.
Re:Who wanted Apple to use DRM? (Score:3, Interesting)
Re:Silly (Score:3, Interesting)
Exactly (Score:5, Interesting)
The problem for them is that there's nothing compelling about new music formats other than MP3/AAC. DVD Audio may be wonderful, but to the average person who just wants to listen to some music in the car, or while working out, it doesn't matter. The high end audiophile types might get into it, but there's not enough of them to create the necessary economies of scale.
I would argue that Apple/ITunes is boosting new music sales because it makes it so incredibly easy. If I find a new artist, I can e-mail you a link, you click it, and 30 seconds later, you're downloading the new music. No trips to the store. No forgetting about that cool new album your friend recommended. Plus the IMixes give another way to find music you might not have bought before.
So it is good for the music industry in the long run, but they have to learn to accept the fact that the crack pipe of back catalogue music sales is running out of smoke. It's going to be hard times for them for a while because even with growing new album sales, they're likely to see an ongoing decline in revenue.
Re:Silly (Score:4, Interesting)
MS would like to think that they can tax hard drives (and in many cases have done so successfully).. But the idea is that the HD is more versitile.
iPod photo does pod-casts, and videos.. There are cheap products which legally let you rip DVDs and put them on your iPod.
60G iPod is a GREAT USB drive, since unlike my book-bag, I almost always have my iPod w/ me (and trust me, I have a bookbag w/ me almost everywhere).
The concept of anti-correlated economic goods is always an interesting topic. People making more money means LESS people shop at walmart or buy potatoes. Here, making a more versitle iPod means less people use their trade store.
Personally I was shocked when iPod made the photo.. They swore up and down that they were only going to make AAC-based products.. And frustratingly I understood why. No radio, no games, no PDA.. These all distract from the big money maker focus. My wife, for example, got a blackberry.. You know what she does on it all day long? Play solitaire.. No phone calls, no PDA PIM data. Just solitaire. Same concept.
That being said, I'm sure Q1-06 will be a high revenue period for the music industry when all those gift cards are cashed in.
The only real question here is whether Apple makes money on the iPod or not. Often device makers sell their hardware at a discount so they can entice people into the lucrative long-term software titles (console games is the most prevalent here). If Apple is only breaking even w/ iPod sales, then this is truely bad news for them.. Otherwise, go suck it music industry.
Re:Who wanted Apple to use DRM? (Score:5, Interesting)
In effect, Apple's monopoly is working against the music labels' monopoly. If you take Apple's DRM monopoly away, consumers get screwed.
Re:Who wanted Apple to use DRM? (Score:5, Interesting)
I filled my MP3 player with music from CDs I already owned. Haven't bough a single song online, haven't bought a new CD in 6 months.
Quite simply, I have enough music to never get sick of what I own. And since it's all easily at hand, I'm even less likely to get bored with it. I have downloaded some music that is being distributed free of charge by the copyright owners, but that's it.
Now that its so easy for people to access their own library, the music industry needs to do more to get me to spend any money.
Sorry Charlie! (Score:5, Interesting)
I'm not sure why they are surprised with this? Did they honestly think people would only put newly-purchased music on their iPods (apparently so)? Why wouldn't I want to put all the music I already listen to on it? When the iPods first came out, it seemed like the biggest buyers were people with too much money on their hands that bought every CD that ever appealed to them, and were tired of shopping for n-disc changers for their cars and jukebox systems for their homes. The whole POINT is that they can hold albums and albums and albums of music without carrying around all the accompanying cruft (CD organizers, anyone?). iTMS was just icing on the cake, a way to explore new music and purchase a track or two without buying the whole album. If I had to make a guess, I'd say iTMS completely revitalized the 'singles' market.
We're not seeing the kind of dramatic growth we should given the surge in sales of iPods and other MP3 players
"the
PAH. I give up. Someone needs to get the music industry to grow up and stop whining that someone played with their toy: it's time for them to eat their vegetables and wear regular underwear instead of diapers. This should be accompanied by a talk about how life doesn't play by the rules you make up for yourself. Sheesh.
Media Industry's Fault (Score:1, Interesting)
I personally do not download music illegally (refused to buy an iPod and can listen to my CD's when I want), but I know a lot of people who do. Some of these people used to be against illegal downloads, but due to the restrictions placed on their music when they download (number of times it can be transferred, illegal to move from this device to that device, cannot be read at all on specific device, etc.) these people have found it easier to download the illegal copies, which have no problems.
Copyright infringement is wrong, but the legal system has made it not even worth owning the legal copies. When the common person doesn't clearly understand their rights on the media that they purchased without needing to be a lawyer to listen to it, you kill the desire to buy it.
iPod did the right thing by encouraging legal downloads to begin with and quickly found a market that was previously (almost) untapped. If they keep on that path and make music downloads simple to use and simple to own, they will remain strong. If Sony and the other companies win out by making it more difficult to transfer music/media from one media to another, the industry will dwindle. I used to purchase Sony items, but why in the world would I want to do this now, if I know that they are hiding trash on their media and are willing to accept vulnerabilities on my machine, and not tell me about the code? What stops them from creating hardware restrictions in their players that will fail to perform correctly as well? No more Sony...
Hollywood is slowly drowning themselves with their current copyright war. If the media can be transferred with 1's and 0's, there is no definite way to stop the illegal copy from being made. A hacker will go out of his way to copy something if he is told it cannot be done. Even if the movie/music isn't worth the cost of the burnable DVD/CD.
Bottom line for Hollywood...Look to your consumers and make them happy. Price things reasonable, make it easy to use for the vast majority, and don't make owning a CD a legal battle. YOU need the consumer, not the other way around. People will eventually stop listening or watching if you inconvenience them too much. I cannot think of a single successful company that did not begin by believing that if they won the consumer's confidence, that they would go far. I can think of MANY that lost sight of that and have long since circled the drain, or have begun to. The ball is in your court now...
0.44% (Score:3, Interesting)
Seriously, 0.44%? Is that honestly an issue?
funny you should mention Pink Floyd (Score:3, Interesting)
But iTMS is killing the industry! Legal music downloads were down a whopping zero-point-four-four per cent since the previous quarter! (For anyone who can't tell.. that's sarcasm!)
Listen to the Hallelujah Chorus! (Score:3, Interesting)
To fill a 60 gig iPod with songs from itunes costs roughly $15 grand. And yet they still sell very well... hmmm. I suppose a lot of folks with 1250 disc CD collections (the stack of CD cases would only be about 30 feet high) will come out of the woodwork to talk about how much they love having each bootleg Phish show they own on their iPod, but the fact is that most people who have 60 gigs of music stole a lot of it. (Other anticipated responses: I use my ipod to store 8 million digital pictures of my girlfriend; I keep 60 gigs of [not copywritten] porn on it; I back up every Linux distribution ever created; etc. You're a hero, and this post isn't about you, so go have a Jolt to reward yourself!)
If quarter-over-quarter iPod sales are way up (discounted for seasonality - lots of those iPods will be Xmas gifts, after all) but quarter-over-quarter music sales aren't, record executives are right to be skeptical about iPods driving their sales. They've pretty much figured out that Apple screwed them over - the iTMS is basically an advertisement for iPods. The fact that it generates some revenue is an ancillary benefit, nothing more.
Now, I'm all for music labels as they are generally constituted now shrivelling up and dying. I couldn't care less. But for the longest time, people b**ched and moaned about how they wouldn't steal if there was a better alternative; if only some genius company would sell tracks for $1 each, so you wouldn't have to buy the whole crummy album for the 3 songs you wanted! I think I read that same post about 6 million times in 1999. Now that it's here, people are discovering that actually, free is still a lot better than $1, and so file-sharing and allofmp3 downloads keep setting all-time records.
This is bad, because the mean record industry is going to call up their cronies in congress and pass more stupid laws that will piss off everyone here. They are going to do something, because the availability of cheap, legal music isn't enough to stop the flood of illegal music being shared. So stop whining and go buy some indie records off itunes
Re:Exactly (Score:5, Interesting)
I think the last time I bought into the audiophile craze was for stuff like "Dark Side of the Moon" or "Twin Sons of Different Mothers" as published by the likes of Mobile Fidelity, CBS and Nautilus (half speed mastered), and Japanese high quality virgin vinyl stuff. But in the end it's hard to imagine the difference in quality was actually worth it. The sound quality bottleneck always remains the fact that your stereo system and room acoustics must also be fantastic or you can forget about it - and I don't happen to live at Carnegie Hall and a lot of the stereo component stuff (aka hi-fi mumbo jumbo) I simply never believed.
So here I am today, I own thousands of vinyl LPs and I own at least another 1000 CDs. All of my CDs have been ripped to a 160 GB hard drive and my music server is still growing by leap and bounds as I add in old vinyl favorites. For vinyl I record from a slightly clunky line-in situation ripping to wav, splitting the tracks, running a pre-tested set of filters that reduce noise, hiss, and pops and clicks, and then finally I use EAC and LAME to make VBR MP3s. Before laughing at my set-up consider that I really do have some vinyl albums and 12" tracks that never saw republication as a CD. For CDs I rip with a Plextor drive, EAC, and LAME to VBR MP3s.
For album songs that segue I additionally rip them as a single track and name them appropriately - so you get a choice, play the album as it actually sounds without interruptions or mix your own playlists with possible segue created gaps. That's pretty much the one drawback to the technology. So far that's 28,669 VBR MP3 files.
I can network the server around the house to locations that I call "dumb but quiet network boxes" with decent sound cards and 7.1 computer speaker systems. The sound is quite sweet. Winamp, Foobar 2000 and Milkdrop rule the day. And there's a use for your old computer and monitor collection if you tweak them up with sound dampening computer cases. Some 5 GB hard drive systems I have down to one Antec power supply fan which can barely be heard, the second exhaust fan kicks on as necessary. You don't need many fans for boxes that do nothing but operate as interfaces for a music server.
And speaking of that music server...
It only makes sense to backup that kind of effort offsite, right? So I gave my brother a backup on a hard drive for the enjoyment of his family. I would have no objection to giving a backup to anyone I know, quite frankly. And I can't be alone in this. I am not handing out free 200-300 GB hard drives, but if someone gives me an empty drive I am cool about it.
Copyright realistically is dead. Even if respected, copyrights have no market justification to last longer than about 4 years, if that.
It's seriously game over for the back catalogue - now and forever. Every future DRM will be cracked. Why? Because people want access to their "licensed" digital stuff. If they think I won't make my own backups and then possibly even share those with friends and family (as I have done for decades now by every other known method going back to reel to reel days) then they are mistaken. If my original copy of my CDs are lost or stolen or even sold, I have no intention of erasing backup copies from my MP3 server.
The music industry has had its day. Now it is near sunset.
Songs are and have always been just commercials for live performers - and they should always have had a nominal price and no protection schemes. That's what the market demands.
Presents? (Score:1, Interesting)
Re:Incorrect (Score:4, Interesting)