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iTunes Sales Ban Does Increase CD Sales

Zonk posted more than 8 years ago | from the sounds-logical dept.

185

Guinnessy writes "According to the New York Times, some music labels have deliberately stopped selling some new singles on online stories such as iTunes or Rhapsody while promoting songs on the radio, so that listeners will rush out to buy the CD album instead. The album appears in itunes at a later date. Not everyone seems to think this is a good idea. From the article: 'The labels are shooting themselves in the foot,' says Rhapsody's Tim Quirk. However, Ne-Yo's CD In My Own Words sold 301,000 copies using this method. Chris Brown's Run It, that was in the itunes store, sold 154,000 copies in its first week. Ne-Yo's So Sick was downloaded approximately 3.4 million times on the peer to peer networks during the week of his album release while the album Run It!"was downloaded approximately 5.3 million times in the same release period."

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185 comments

Overheard at the RIAA (2, Funny)

zubinjdalal (816389) | more than 8 years ago | (#14886093)

I want the names and addresses of those millions NOW!

Liars, Damned Liars and Statisticians (5, Insightful)

fishdan (569872) | more than 8 years ago | (#14886094)

From the article..."Island Def Jam offered a discount to retailers who stocked the album, allowing it to sell at stores like Target for $7.98 last week" This is a great example of someone making up stupid numbers. The fact that more CD's were sold because there no downloads sold makes complete sense. If these people, who were going to legitimately buy a CD could not buy it online, then they would buy it in the store. If they were allowed to buy it online, would they buy it TWICE? The important figure (which are not revealed in this meticulously researched article) is which way did they make more money or which way did they move more units. The fact that they sell less CD's when there is another format to buy the media should not be a surprise to anyone (except for record execs, who can't count).

Re:Liars, Damned Liars and Statisticians (5, Insightful)

Dutchmaan (442553) | more than 8 years ago | (#14886184)

From the article..."Island Def Jam offered a discount to retailers who stocked the album, allowing it to sell at stores like Target for $7.98 last week"

So one can reasonably conclude that iTunes, at least in an indirect way, is forcing labels to sell their music cheaper in order to secure more sales!

I don't think iTunes is going anywhere, but if it's presence causes labels to actually price aggresively the way it should be, then I think it's a good thing.

Re:Liars, Damned Liars and Statisticians (5, Insightful)

bicho (144895) | more than 8 years ago | (#14886431)

I think it is not much different than printing a hardcover first and paperback later.

Only if. (2, Insightful)

Belial6 (794905) | more than 8 years ago | (#14886474)

Only if they drop a bunch of letters out of the book to make it take less space, then make you use one of those little red filters to read the paperback so that it would be difficult for you to go and photocopy it. ;)

Re:Only if. (2, Funny)

yurnotsoeviltwin (891389) | more than 8 years ago | (#14886615)

Don't give them any ideas.

Re:Liars, Damned Liars and Statisticians (3, Informative)

vp_development (789333) | more than 8 years ago | (#14886260)

You hit the nail right on the head with the price reduction being the key. They did that deliberately to get numbers like that that they hoped would be misinterpreted.

What the RIAA is all about is controling what choices you have in music. If you can only get the CD's that they distribute, they can force anything down your throat. If you can download any artist's music, the artist has much more power, and the labels much less. The RIAA would love to end all downloading of music -- because right now Apple is making money off of ITunes, and they are offering all sorts of music -- music the labels would just as soon you not be allowed to hear.

Re:Liars, Damned Liars and Statisticians (3, Interesting)

Karzz1 (306015) | more than 8 years ago | (#14886324)

They did that deliberately to get numbers like that that they hoped would be misinterpreted.

"They did that deliberately to get numbers like that so that they can use these misinterpreted numbers in their propaganda machine."

There, fixed that for ya :)

Re:Liars, Damned Liars and Statisticians (2, Insightful)

afaik_ianal (918433) | more than 8 years ago | (#14886261)

The important figure (which are not revealed in this meticulously researched article) is which way did they make more money or which way did they move more units.

But you can't just compare revenue or profit anyway. Song X frequently makes more money than song Y. That doesn't mean that X's marketing strategy is better - it may have just been a better song, or appealed more to the masses.

Re:Liars, Damned Liars and Statisticians (1)

Jon_E (148226) | more than 8 years ago | (#14886915)

The important figure (which are not revealed in this meticulously researched article) is which way did they make more money or which way did they move more units.

which "they" do you mean? the record labels or apple/rhapsody? ultimately it comes down to margin for the content producing agency which is probably higher on a CD sale than on a ESD sale .. with IP such as this it doesn't have to do with moving units or distribution models - it has everything to do with margin and market penetration.

From one sample to conclusion (5, Insightful)

Opportunist (166417) | more than 8 years ago | (#14886098)

One sample? You draw conclusions from ONE sample? Hire some statistician, would you?

There are SO many variables to be taken into account that could influence that. Do they target the same audience? To give a very drastic example, if you compare CD sales to download of a Techno song and a Country song, it does NOT matter when it comes out on which medium to predict almost flawlessly which one has a higher download and which one has a higher CD count.

Were they released at the same time? If it is released around Xmas, that would boost CD sales compared to downloads (it IS after all easier to wrap a CD in gift paper than a bunch of bits). What's the weather like on release day? Bad weather and I'd rather download it instead of going out in the pouring rain.

Do the CDs offer the same "goodies" that come with the CD? Do they both offer the lyrics in the booklet, for example, or some pictures of the artist? How about the CD cover?

So please, before drawing conclusion from ONE SINGLE sample, at least make absolutely sure that the results are comparable. Or, better, get a few 100 samples before jumping to a conclusion!

Aaaaaand, let's not forget: If it's not available from legal download... especially if the CD is DRMed into uselessness.

Re:From one sample to conclusion (4, Informative)

op12 (830015) | more than 8 years ago | (#14886121)

Agreed...if the study is not based on numerous samples, this is garbage. And even then it can still be skewed. This is no way to measure the effectiveness/ineffectiveness of iTunes sales. You'd be just as accurate flipping a coin to tell you whether it impedes sales or not.

Re:From one sample to conclusion (1, Interesting)

op12 (830015) | more than 8 years ago | (#14886137)

Can we get enough people to tag this "bogus study"? Or even just "lame".

Re:From one sample to conclusion (0, Offtopic)

iamdrscience (541136) | more than 8 years ago | (#14886147)

Do the CDs offer the same "goodies" that come with the CD?umm... yes?

Re:From one sample to conclusion (2, Interesting)

Tweekster (949766) | more than 8 years ago | (#14886196)

Most booklets dont have the lyrics you realize? At least the cds I am used to. And generally the album art, its nice to look at once for 5 seconds, then it gets tossed away.

Sample OK, Conclusion NOT (3, Insightful)

ackthpt (218170) | more than 8 years ago | (#14886205)

One sample? You draw conclusions from ONE sample?

What they're obviously missing is that denying iTunes sales increases CD sales which translate into more piracy.

Good plan.

Re:Sample OK, Conclusion NOT (5, Insightful)

Romancer (19668) | more than 8 years ago | (#14886430)

I'd like to see if there are any statistics on which initial purchase method is released into the P2P arena.

If it's the CD rip that eventually gets on the networks or the iTunes. If they had a simple watermark at the end of the song that would show up in the resulting encodings and be detected they could track which method is actually contributing to piracy. If people who are more likely to purchase a CD and rip it to serve on the file sharing networks or if it's the iTunes users that serve it up. With a couple hundred songs marked and tracked that'd be compelling data either way.

In any case all it takes is one person to borrow/buy/steal/download a track and serve it up.

It makes a lot more sense to make it cheap enough and easy enough to get a song that illegally downloading it is not benificial. Not threatening them with vague lawsuites that people really don't care about. And not DRM crap that makes it better to download it illegally to use on the multitude of products out there being marketed by the same companies that restrict the customers ability to use them (cough-sony-cough).

If there were a service that let people pay a small price for music by the track in a high quality standardized format and allowed them to do whatever they wanted with it without any draconian DRM restrictions, it would be an alternative that would capture the majority of the market share overnight. And at the same time would make the p2p networks that much less attractive.
(didn't hear it from me, allofmp3)

It's not something new, but needs to be said again to these execs: Basic economics 101, if you offer an easier product at a cheaper price without a significant quality drop you will make more money in volume than your competitors.

The competitors in this case are virus ridden, illegal, spotty selection, gun to the head, can go away at any time, P2P networks.

You hear that RIAA? You could make millions happy, rake in billions of dollars in sales, have more volume with significantly less overhead and 3rd party costs. All you have to do is look at the market and act like business people and fulfill the obvious need.

Re:Sample OK, Conclusion NOT (1)

Scarletdown (886459) | more than 8 years ago | (#14886506)

In any case all it takes is one person to borrow/buy/steal/download a track and serve it up.


And in many cases, I'm sure, that really does result in a significant loss of CD sales. People download that one track, listen to it, decide it's crap, and choose not to buy the CD with that crap track on it, figuring all the other tracks are crap as well. Of course, in an ideal situation, they would indeed delete the track from their hard drives and not download any more tracks from that particular CD.

Re:From one sample to conclusion (2, Informative)

yfkar (866011) | more than 8 years ago | (#14886345)

It's the Slashdot summary (surprise, surprise) that makes the conclusion "iTunes Sales Ban Does Increase CD Sales". The article itself is titled "Labels Halt Downloads to Increase CD Sales" which just means that labels are trying to increase CD sales by halting downloads.

Tell a lie often enough. (1)

EverDense (575518) | more than 8 years ago | (#14886105)

That is not a correct scientific method they using to measure it.

Oh...sure..don't believe them... (1)

PenguinBoyDave (806137) | more than 8 years ago | (#14886409)

You think they would actually LIE to us? Shocked I am. SHOCKED!

Re:Oh...sure..don't believe them... (1)

woot account (886113) | more than 8 years ago | (#14886819)

Obviously, if he thinks that they would lie, he must be a dirty pirate and a terr'ist.

Re:Tell a lie often enough. (0)

Anonymous Coward | more than 8 years ago | (#14886598)

That is not a correct scientific method they using to measure it.

Sure it is as long as Chris Brown and Ne-Yo both weigh the same as a duck.

In other news... (5, Funny)

zubinjdalal (816389) | more than 8 years ago | (#14886117)

... people turn to newspapers after leading news agencies refuse to publish new content and breaking news on their websites.

Re:In other news... (1, Interesting)

Anonymous Coward | more than 8 years ago | (#14886585)

The trouble is, if one news agency publishes on the web, they all have to, because news agencies compete for readership. Because copyright is a monopoly on particular works, if your want a song or album, you have no choice but to get it from the record label in whatever format they deem fit. You can't go to the competition because there isn't any.

I think if there were two things I could change about the music industry, it would be so that artists could only sign non-exclusive contracts. That would mean that record companies would actally have to compete to earn their money.

Oh, yeah... (5, Funny)

tool462 (677306) | more than 8 years ago | (#14886120)

Nothing more statistically meaningful than a single data point! Their powers of extrapolation are mind boggling!

Re:Oh, yeah... (0, Troll)

brian0918 (638904) | more than 8 years ago | (#14886183)

"Nothing more statistically meaningful than a single data point! Their powers of extrapolation are mind boggling!"

Based on the one moderator who has modded your post Funny, I have come to the incotrovertible conclusion that your post is -1 Troll.

Re:Oh, yeah... (4, Funny)

Coryoth (254751) | more than 8 years ago | (#14886541)

Nothing more statistically meaningful than a single data point! Their powers of extrapolation are mind boggling!

They are simply applying Vesilind's laws of experimentation:
  1. If reproducibility may be a problem, conduct the test only once.
  2. If a straight line fit is required, obtain only two data points.


Jedidiah.

Re:Oh, yeah... (2, Funny)

tool462 (677306) | more than 8 years ago | (#14886655)

I used that in some of my physics labs ;)

Re:Oh, yeah... (1)

quickbrownfox (900989) | more than 8 years ago | (#14886583)

You can prove anything with statistics. Fourteen percent of people know that.

Re:Oh, yeah... (3, Insightful)

JourneyExpertApe (906162) | more than 8 years ago | (#14886958)

That's what I always say to enviroweenies whenever they talk about global warming. I mean, can you point to any other examples of Earths that have experienced rapid rises in temperature, CO2 and other greenhouse gases in response to human activity?

Real explanation (1)

CrimsonScythe (876496) | more than 8 years ago | (#14887040)

The extrapolation was done using the enormously powerful algorithm that are used in law enforcement (X Files, CSI: Miami, etc) for zooming in on digital pictures. This algorithm can easily extrapolate a handful of pixels into gigapixel images. Don't mock what you don't understand.

finally the truth (5, Funny)

tehwebguy (860335) | more than 8 years ago | (#14886128)

now that we've compared 2 artists we finally know the truth about music consumer habits!

Re:finally the truth (1)

pigs,3different1s (949056) | more than 8 years ago | (#14886368)

...Two "artists" I've never heard of.
A story based on bad data really isn't a story worth repeating, posting, or linking to.

Of course.. (1)

mindtriggerz (914619) | more than 8 years ago | (#14886138)

If there's anything all /.ers know, it's that the record companies can't stand competition. They have a (deteriorating) monopoly, and they've been milking it for all it's worth, and they will keep milking it until the cow kicks them or it dies.

Who the fuck are Chris Brown and Ne-Yo? (4, Insightful)

Radi-0-head (261712) | more than 8 years ago | (#14886139)

And why should anyone care?

Re:Who the fuck are Chris Brown and Ne-Yo? (1)

just_von (791649) | more than 8 years ago | (#14886199)

Chris Brown comes on radio disney all the time (my daughter listens). Hes a rapper I think. I don't know who the other guy is...

Re:Who the fuck are Chris Brown and Ne-Yo? (0)

Anonymous Coward | more than 8 years ago | (#14886246)

I don't know about Chris Brown, but I think that Ne-Yo is the son of this guy. [cdnet.edu.cn] :o)

They should have taken the blue pill.... (3, Funny)

TheDukePatio (621176) | more than 8 years ago | (#14886325)

Noone will in about a year. With a name like "Ne-Yo" I smell marketing gimmick all the way. Record companies only care about what will make them cash now.

I predict Ne-Yo's successors will a group named "Tri-Nitee" and some chick with a large wardrobe named "Morph-Eus"

Re:Who the fuck are Chris Brown and Ne-Yo? (0)

Anonymous Coward | more than 8 years ago | (#14886594)

The /. crowd obviously doesn't listen to rap or R&B. Just because 'you' don't know them doesn't mean they're not big names. FYI, they are both young rising stars.

Re:Who the fuck are Chris Brown and Ne-Yo? (1)

Anonymous Slacker (607727) | more than 8 years ago | (#14886628)

don't know, don't care.

so what does iTunes to to Edison cylinder sales? (4, Insightful)

swschrad (312009) | more than 8 years ago | (#14886140)

hey, folks, it's epiphany time! -- the default physical medium for music sales has changed. it isn't Edison cylinders, Brunswick 77s (all "78" record makers used a different speed), 3-3/4 IPS 4-track tapes, or CDs, it's become electronic transfer.

selling CDs promotes ripping without any content copy-limiting software system. if the pinheads in Big Music had their schytte together, they'd stop shipping physical media, and sell it all online through iTunes and the like.

but all they have together is their off-key whining....

(Light goes on) Dang! (1, Funny)

Anonymous Coward | more than 8 years ago | (#14886512)

the default physical medium for music sales has changed. it isn't Edison cylinders, Brunswick 77s (all "78" record makers used a different speed), 3-3/4 IPS 4-track tapes, or CDs, (has) become electronic

So that's why I can't find a portable player for my 16 2/3 rpm 16-inch transcription disks! Mystery solved at last.

Re:so what does iTunes to to Edison cylinder sales (2, Insightful)

Anonymous Coward | more than 8 years ago | (#14886579)

The answer: even though legal online music is DRMed, the labels and RIAA do not look kindly on iTunes or other online distrubution precisely because they would lose control of distrubution. They love control, they sleep with control, they make sweet anal love with control when things go their way, control is within and without them. They can't think of having it any other way. In fact, they have a very hard time thinking that technology hasn't progressed since the 50's.

With online distributors, they lose control--they rely on another company to distribute their product because they were to narrowminded to innovate the idea of legal online electronic dirstrobution in the first place, even though they had the best chance of anyone to successfully pull it off... The industry as a whole will never move to such a system. We'll see music on DRM'ed holographic data crystals before they'll sell all of their music online, providing the whole industry dosen't collapse first.

Re:so what does iTunes to to Edison cylinder sales (1)

bloodmusic (223292) | more than 8 years ago | (#14886610)

but all they have together is their off-key whining....


Maybe someday the big record companies will learn about pitch correction tools so they can at least seem to whine on key...

Re:so what does iTunes to to Edison cylinder sales (1)

ignavus (213578) | more than 8 years ago | (#14886822)

Environmentally friendly, too.

Why is this in YRO? (1)

Rude Turnip (49495) | more than 8 years ago | (#14886146)

This might be an interesting business article, sure, but the topic is completely out of the bounds of Your Rights Online. Note to editors: articles should not be classified under YRO to complain about lack of convenience. Ironically, this is the first /. thread where the big complaint is that a song is NOT being sold in a DRM'd format.

Good joke! (1)

thePowerOfGrayskull (905905) | more than 8 years ago | (#14886190)

"If you know you have something of depth, you have to be careful about how you bring it into the marketplace," he said. "We're in the business of having consumers believe in an artist." Haha! At least the labels have a sense of humor.

You know, I have a problem with this.... (4, Insightful)

10101001011 (744876) | more than 8 years ago | (#14886207)

In scientific tests, one can take a solution, mix it in another solution, and observe the results. Then one can make a single change keeping all other variables identical and perform the same tests. Those results are (arguably), if not valid, then at least a decent indication of a pattern. This summary (and I presume the article?) attempts to use this methodology with music artists -- something that by its very definition stands itself apart from science. Just because one individual's CD sells a certain number of copies through one venue, while another does comparatively poorer through another does not mean that the results are valid.

First you are taking one individual CD's sales through a store and comparing them to another CD's sales through an online distribution. While this test is almost impossible to perform (release the song at the same time through both channels and see the online distribution win and people would say that it simply hurt the CD sales, or alternatively, vice versa), it might have been a better comparison to simply take one popular artist's newer album, release it exclusively online and compare it with previous releases. Even this is not an indestructable argument, but at least you would be comparing Granny Smiths to Red Delicious, and not fruits to vegetables.

Now I am by no means a scientific person (having a greater interest in history) but it astounds me (through every century) when one side tries to sound scientific by saying, look! ho! this way works better and one can see it conclusively because the stars are in the sky and not in the ocean! This was pretty much a complete red herring of an article.

Interesting quote... (5, Interesting)

addbo (165128) | more than 8 years ago | (#14886213)

"If you're buying a Picasso," he continued, "you can't just buy the upper right-hand corner."

This is a weird analogy... if I buy a single song... that's not like buying the upper right hand corner of a Picasso (though with some of Picasso's work I might enjoy it more). It's just like buying a single painting... you select the one you prefer and purchase it. You don't need to buy the whole body of work that an artist produces to appreciate the artist... a song I would equate to a single painting... meanwhile an album is just multiple paintings by the same artist.

At a buck a download... wouldn't they make more off of the album than at the 8 dollars they are selling the thing at Target for? How much does it cost to produce and distribute these CD's to each of the retail chains? How many of those CD's that are produced are in fact sold? So how many just sit on the shelves forever? Or... if you don't produce enough to meet demand... how much money have you lost opportunity costs?

Digital just seems so much more efficient... and this robbing peter to pay paul is silly... yes if you only sell a track in a single medium... of course the volume will rise for that medium... but in the end are you making more money or less? (Say you sold 300,000 tracks on iTunes... cost/benefit?)

Digital uptake is just ramping... if they start doing silly things like this to make it harder for consumers to get their content... either they'll go back to piracy... or it'll stop the whole legal digital distribution before it's even had a chance to become mainstream.

Re:Interesting quote... (0)

Anonymous Coward | more than 8 years ago | (#14886270)

"If you're buying a Picasso," he continued, "you can't just buy the upper right-hand corner."

Oh yeah? LOL. Who wants to bet they wouldn't sell "just the corner" for the price of the album if they could do it?

Re:Interesting quote... (0)

Anonymous Coward | more than 8 years ago | (#14886400)

Yeah, the Picasso analogy sucks. But here's a better one. For a good album, buying one song is like getting one page of a comic book.

Seems to me they could just list the songs on iTunes as "only comes with album purchase" or whatever specific verbiage they use. Thus, people are again forced to buy the album instead of single songs. (Pink Floyd does this and it's annoying as hell)

Re:Interesting quote... (-1, Flamebait)

Anonymous Coward | more than 8 years ago | (#14886810)

True, but this ignores the fact that there hasn't been a "good album" since Pink Floyd released Dark Side of The Moon in 1973.

Re:Interesting quote... (1)

MyNymWasTaken (879908) | more than 8 years ago | (#14886437)

At a buck a download... wouldn't they make more off of the album than at the 8 dollars they are selling the thing at Target for?

Not if there is really only one song worth purchasing on the whole album. I've purchased several albums like that.

Re:Interesting quote... (1)

emilv (847905) | more than 8 years ago | (#14886846)

You can't compare two different art forms.
Rasmus Fleischer (known in Sweden as an anti-copyright activist, but he even writes about culture in many forms) wrote in his blog a few days ago about a newspaper comparing comics to poetry, and he didn't like the way they placed poetry as the highest and best art form.

Here's the blog in Swedish:
http://copyriot.blogspot.com/2006/03/serier-behver -inte-jmfras-med-poesi.html [blogspot.com]

Re:Interesting quote... (3, Interesting)

e4g4 (533831) | more than 8 years ago | (#14886972)

Excellent point. I do think, however, that Mr. Brummel's analogy is apt - in some circumstances. Take, for example, Sgt. Peppers Lonely Heart's Club Band (by the Beatles). As an album, it was quite popular (don't have any specific numbers), and yet, not a single song on the album hit the Billboard Chart #1 spot. The reason for that, IMO, is that the album was a complete work - the individual pieces did not make much sense. The same can be said for Dark Side of the Moon (whether or not you play it over the Wizard of Oz).

The problem, however, is that this is not how pop albums are put together. Basically, they take what they consider to be the best songs on the album, and put them within the first five tracks of the cd, and then fill in the blanks with songs that very few people listen to so that they can justify charging full price for the cd. In this case, it makes perfect sense that iTunes drives CD/album sales down (regardless of the worthless statistical data in the article) because there's no reason to buy the cd, which threatens the record company's business model.

Really, my point is that the record industry has no one but itself to blame. If you produce something that people don't actually want to buy, and then package it with something they do want to buy, and then force them to pay extra for the crap they don't want, do you really think that when offered the opportunity not to pay for the crap, they wouldn't take it? I mean, doesn't it piss you off that that winter weather package on your car comes with a racing stripe and chrome rims?

Re:Interesting quote... (1)

SydShamino (547793) | more than 8 years ago | (#14887017)

When the whole album is one track and one contiguous work, or is themed in such a way as to make it one work (i.e. the Beatles' Sgt. Pepper's or Pink Floyd's the Wall), then one could argue that it is one work and should be sold as a unit, maybe.

When there is no correlation between the songs, especially when the song order was chosen by a record company executive, and some songs are just used as filler to make the collection CD length, then this argument is not valid.

Artists know how to create larger contiguous works. See Inna-gadda-da-vida. (Note that IIRC the whole song sells for $0.99 on iTunes.)

Re:Interesting quote... (1)

Jon_E (148226) | more than 8 years ago | (#14887027)

"If you're buying a Picasso," he continued, "you can't just buy the upper right-hand corner."

agreed that this analogy breaks down in a big way .. having an original painting is quite different than a digital reproduction. really with music you're getting captured performance art and with replay - it's ultimately designed to be cut, remixed, dubbed over, etc.

however:

At a buck a download... wouldn't they make more off of the album than at the 8 dollars they are selling the thing at Target for? How much does it cost to produce and distribute these CD's to each of the retail chains?

i believe the point the article is trying to bring across may have more to do with the cut that online distributors are taking as opposed to retail outlets. if content producers are claiming that their revenues are higher creating physical CDs, and distributing to retailers, than whatever secret deal they have with apple and rhapsody - that may be something to sit up and take notice of. CD rips are much easier to distribute illegally than DRM'd online content, but ultimately it seems that the content producers are saying that the extra money they may be paying tech firms to add their "DRM" is ultimately not worth their bottom line. i don't know, a much more interesting data point would be around revenue from content that is only available in an online DRM format.

 

Need broader statistics to be meaningful (2, Interesting)

Bombula (670389) | more than 8 years ago | (#14886224)

This is quite a particular instance, and it is probably reckless to draw sweeping conclusions from it. As I understand it, the broader statistical data show quite clearly that sales of CDs, as well as overall music sales, have steadily increased during the same period that P2P file sharing appeared and became widespread (even after correcting for inflation and overall economic growth).

It therefore seems hard to argue that file sharing and digital distribution has a negative affect on music sales.

amazing, headline news (3, Insightful)

l33t-gu3lph1t3 (567059) | more than 8 years ago | (#14886225)

The only possible conclusion you can get out of this is "customers don't buy the same product twice".

CD sales is not the point! (1)

tfcdesign (667499) | more than 8 years ago | (#14886248)

If its selling online, then its still selling. Regardless if it replaces cd sales or not is irrelevent, its whether the over all sales are up or not which is important.

How the hell do record company execs manage to put their shoes on?

Re:CD sales is not the point! (2, Funny)

ShibaInu (694434) | more than 8 years ago | (#14886456)

Let's see, if I'm a record exec and I see a digital copy of a song sell 3 million copies, which cost me nothing to reproduce or distribute, why do I care about CDs at all? Selling 300K CDs is pretty good in a week, but the lable had to press and ship all those CDs. They sent one digital copy to iTunes and sold 3 million, and they are complaining? These folks are really working hard at being stupid.

whoops (1)

tfcdesign (667499) | more than 8 years ago | (#14886538)

Regardless if it replaces cd sales or not is relevent...

Wow, that's so Statistical! (4, Insightful)

twifosp (532320) | more than 8 years ago | (#14886252)

So two different CDS with two different audiences, with two different marketing strategies, had two different outcomes? DUH?

This fails so many statistical tests for process control and would never even be eligible for something like an Annova (test for statistical difference) tukey-kramer test. They find one demographic of people, internet buyers. Split them in two. Offer the download to 33% of the group, deny the download to 33% of the group, and let the other 33% have the choice to steal/buy online/buy the cd ect. All the while exposing them to the exact same marketing, radio singles, and ensuring their purchasing habbits are the same. Only then can you even begin to test which group is statistically more likely to alter their purchasing habbits.

In other words, doing all of the above is hard and takes time and just coming up with bogus conclusions is so much easier.

I can't wait until the RIAA gets so much control over the music industry that they legally charge each user every time they listen to the song. Hell, they'll charge the user 1 cent per second the song is played. It wouldn't be fair to pay the same price for a 2 minute song and a 4 minute song would it?

When that day happens, and it looks like it might, the RIAA will finally implode and independant music will return in a blaze of glory. Or be outlawed as a potential communication medium for terrorists. One of the two anyway.

What a sample size! (1)

Spyder (15137) | more than 8 years ago | (#14886255)

Ok a sample size of ....(say it with me).....1 for each case. This obviously proves a point. Now I don't know, but are these two songs targeted at the same fan base? Are they of the same relative popularity? Could this meerly be an abberation? Tune in next year for the final conclusion of As The Dataset Turns.

Your anacdotal evidence does not work on me, Jedi.

Not only what I said before but... (3, Insightful)

tfcdesign (667499) | more than 8 years ago | (#14886269)

CDs are easier to pirate than DRM protected iTMS songs. At least at the same quality.

try this (5, Informative)

troll -1 (956834) | more than 8 years ago | (#14886273)

Search online [gnutelliums.com] before you rush out and drive 15 miles in your SUV to get that latest CD.

Message to the music industry:

The horse and buggy distro system of funny plastic disks has been superceded by an Internet. Tune in or drop out.

Re:try this (1)

filterban (916724) | more than 8 years ago | (#14886545)

The horse and buggy distro system of funny plastic disks has been superceded by an Internet. Tune in or drop out.

Thanks for making my day.

Why is it that everyone who used Napster for the first time knew instantly that audio CDs were dead - except for the people who could have profited from that information the most? (In other words, the record company execs?)

Exec 1: Woah. Napster gives people any music they want easily. Let's FIGHT IT. Exec 2: Woah. Napster gives people -what they want-. Let's find a way to profit on it.

I think you know what happened. Exec 2 triggered a revolution in an industry that his company wasn't even involved in.

Shocker (4, Insightful)

Cyberllama (113628) | more than 8 years ago | (#14886282)

You mean when a band puts out a cd with one good song and a pile of crap that cd sales are higher when people are forced to buy the entire cd to get the one worthwhile song than when they can simply buy that song alone.

The real story here is not "Itunes hurts cd sales" its "Itunes promotes better music". The a-la-carte style of music downloading that itunes offers punishes crappy cds for sucking and rewards good ones for being good.

Re:Shocker (1)

MrPiquul (960129) | more than 8 years ago | (#14886804)

The record industry is aware that most of todays "artists" aren't really artists; There are no more Fleetwood Macs or Rolling stones or Carole King's.

Albums aren't art anymore. They aren't actual pieces of time, history, what-have-you. There's usually 2 or 3 "hits" on one cd and the rest are fillers. The last album that was a complete and whole statement was "Jagged Little Pill" (which is why it was so large) and that was what? Early 90s?

You're being sold an act -not- an artist.

They're a dying industry with dying acts churing out the same babble-cock-bull and for one to assume it's "all about greed"....at this point is totally correct. They shot themselves in the foot by trying to pass off crap as fantastic, know -we- know only 2ish songs are decent and only want those.

Shit Cd by Bull low-pay artist:
$8@Target / Large profit
$9.99@iTunes / Invalid

Likely outcome (1)

booch (4157) | more than 8 years ago | (#14886310)

Most likely, the best way to maximize profits is to stagger the releases. Just like movies released in the theater first, then on DVD. You'll always get some people who will buy both. If you release them both at the same time, you'll get less people buying both.

The big question is, which would maximize profits more? Selling the digital download first, or the CD first? I suspect it would depend on the audience for the given artist. For pop music with a young audience, I would not be at all surprised to find that kids would be more likely to buy the CD, and then the digital download a few weeks later.

So, where should I buy music? (3, Insightful)

Slipgrid (938571) | more than 8 years ago | (#14886328)

Here's my dilemma. I like music and I like my computer. I used to like CD's, but I like my computer more than I like CD's. I don't like the mixed-bag-of-root-kits-and-DRM that CD's want to put on my computer, so I don't buy them. I also don't like the DRM from iTunes, but at least from them I know what I'm getting. But, I've never bought from iTunes. So, where should I buy my music? The answer is, I don't buy it at all. I would pay for it. I want to pay for it. I used to pay for it. But, I don't like my toys to be broken by greedy strangers... Ok, extremely wealthy and greedy strangers. So, now, I still get my music, and I don't pay. If the record companies still sold a product that wasn't broken, or a risk, I'd like to pay them, or better yet the artist, for the music. But they are not offering something I'm comfortable with, so they get none.

Re:So, where should I buy music? (1)

kronos7871 (894021) | more than 8 years ago | (#14886395)

Try http://www.audiolunchbox.com/ [audiolunchbox.com] They offer a variety of plans - either a la carte or subscription with no DRM and they have a huge selection of indie music

Re:So, where should I buy music? (1)

tyme (6621) | more than 8 years ago | (#14886923)

Slipgrid [slashdot.org] wrote:
Here's my dilemma. I like music and I like my computer. I used to like CD's, but I like my computer more than I like CD's. I don't like the mixed-bag-of-root-kits-and-DRM that CD's want to put on my computer, so I don't buy them. I also don't like the DRM from iTunes, but at least from them I know what I'm getting. But, I've never bought from iTunes. So, where should I buy my music?

You can buy from iTunes.

Once bought, you are free to:

  1. burn a CD (sans-DRM) directly from iTunes
  2. re-rip the songs off the above CDs as MP3s (sans-DRM)
  3. re-encode your purchased music from (DRM'd) AAC to MP3 (sans-DRM)
  4. burn the (DRM'd) AAC files to CD for archival purposes

I regularly do all except for #2 (re-rip from burned CDs) partly out of paranoia (I don't want to lose any of the music I paid good money for, so I have multiple backups in multiple formats) and partly because I like to reencode the music I have on my iPod at half the bitrate (it still sounds pretty good and you fit a lot more music in iPod).

For all the fuss people make about Apple's DRM it's really pretty toothless. The total amount of extra work required to get non-DRM music out of iTunes is pretty minimal: you can do it with nothing more than the software Apple gives you and you don't even need to do any techie stuff (no hex-editing the iTunes binary, no mucking about in the registry, just a round trip through a CD-burner). The fact that the major labels agreed to Apple's DRM scheme almost suggests that they don't really care about piracy so long as it can be made inconvenient (or, alternately, that nobody at the major labels is bright enough to recognize the gaping holes in Apples DRM and thought everything was tight as a drum).

The Real News Here... (2, Interesting)

Anonymous Coward | more than 8 years ago | (#14886334)

What I find quite interesting is that no one is bringing up the real news here, in that what this article is pointing out is that iTunes/Raps needs to have an option to only allow buying the entire album, and not just the individual song. The actual CD has nothing to do with it. The overall concept would be that on initial release, only the entire album can be bought for the first 5 weeks. After this, individual songs can be purchased.

Why dont they have this now??? It is because iTunes is about selling players, and not about revenue from downloading songs. The blame for this is directly on the recording studios for not making downloading of music more profitable for the internet providers....

Re:The Real News Here... (1)

BurntNickel (841511) | more than 8 years ago | (#14886595)

I was under the impression that iTunes did have the option of buying only as an entire album but don't think I've seen many albums that way.

Experiment on a store like AudioLunchbox.com? hmm (1)

kronos7871 (894021) | more than 8 years ago | (#14886351)

If the major labels really want to try an interesting experiment, why not offer the albums on a store like http://www.audiolunchbox.com/ [audiolunchbox.com] or emusic.com where the users don't feel handcuffed by DRM. Just a thought..

so... (0)

Anonymous Coward | more than 8 years ago | (#14886404)

So they gave up nearly 2mil iTunes downloads for an extra 150k CD sales? What percentage of sales does the label get from each of these sources? But, at $15/cd, the $2mil iTunes sales vs. $2.25mil in CD sales doesn't exactly look like a huge windfall.

I don't get it. (2, Insightful)

jcostantino (585892) | more than 8 years ago | (#14886411)

They're proud of selling a CD for $8 at Target with all the costs of shipping, printing, materials, markups, etc... instead of selling it for $9.99 on ITMS where it's (from what I recall seeing, I could be wrong) 90% profit for the publisher?

I don't get it...

Re:I don't get it. (0)

Anonymous Coward | more than 8 years ago | (#14886970)

In my opinion, here's why --

They market the band to individual people. If they market well, then they sell the person on the band. With single track downloads, they risk that the person they spent money to market the band to, only buys the ONE song they like and then move on to the next band. Total sale per customer = 99 cents.

With the CD, they know that if they market the band well enough, the person will buy the album. Total sale per customer = $8

So it's because they are nervous that people will only buy 1 or 2 songs per band. Of course, what they don't realize is that a lot of people still buy the whole album online. And those that don't are may still buy MORE music in the long run because of convenience.

advertising with "piracy" (1)

jonastullus (530101) | more than 8 years ago | (#14886416)

there's nothing like advertising with other people's wrong-doing, is there?

now "piracy estimates" are used to push business models... is this madness never going to end? let's all just agree that the collective conscience owes the music industry 1 quintillion dollars and be done with it.

"stealing" copyrighted material is wrong, pushing people into "law-circumvention" is too, suing them for ridiculous amounts of money certainly is. let's all just switch to legal (mostly not well produced) music and hope it'll get better in time. the big labels creep me out and the commercial online distributors are starting to scare me too, with their current line of reasoning.

they are basically blackmailing the music industry, saying "either you syndicate through us, or [we'll let] people steal it from right under your noses"

Not a good idea to follow the movie industry (3, Interesting)

ursabear (818651) | more than 8 years ago | (#14886428)

Stick with me on this for a minute:

If my family wants to see Harry Potter [insert episode here] at the movie theater, we'll go see it so we can have a blast sitting in the dark listening to the overly-amped up sound and get a fun thrill from the big screen.

However, if the DVD were available at the same time, we'd still go to the theater to do the family thing, then buy the DVD if we liked it.

Means this: we go to the theaters to see the things in which we are interested - irrespective of DVD availability. We then wait with anticipation for the DVD for a release (and generally buy it on the day it is released) if we really liked the film. What I'm trying to say is, if we like it enough to patronize the film, we'll see it several times.

Enter the music industry: The industry is trying to figure out how to stay in business, and along the way, they're forgetting something critical: the fans. If the fans like it, the ones who pay for music will buy it (and some of us will buy the CD if we want to support the musician(s)). Those that don't buy music probably won't buy the downloads or the CDs.

Key point: If the artist makes the fans happy, they'll buy whatever makes the fan happy (CD or individual download). Preventing one of the means of purchasing is not helping the artist or the label. Truthfully, (this is a personal opinion, folks) if I really like a given artist, I'll buy the CD - even if there are some tunes to which I won't listen - so I can patronize the artist. If I like one tune of a given artist - but the artist doesn't generally float my boat, then I'll download the one tune and not buy the CD.

Cutting off means of distribution is not a smart business tactic.

Nothing like... (1)

CupBeEmpty (720791) | more than 8 years ago | (#14886458)

...an n=1 for a good statistical correlation. This is statistically meaningless you cannot establish a trend with one sample.

Maybe they didn't consider... (3, Funny)

Kelz (611260) | more than 8 years ago | (#14886463)

Maybe they didn't consider the fact that maybe people liked one song/album better than the other?! Tomorrow in the news: Sales of online-ordered giant broccoli stumps plummeted today whilst store-bought beer flourished. Is this the end of online-ordering?!

Amazing (1)

SuperKendall (25149) | more than 8 years ago | (#14887038)

Oddly, I can find no record of BroccoliStumps.com. I was sure someone would have tried that at around the same time as pets.com. In fact I could imagine it coming from the same people.

I would think (0)

Anonymous Coward | more than 8 years ago | (#14886472)

that this would just lead more people to download them for free. I mean if I just want the one song why am I going to buy a whole CD for it? And what is going to make me wait to get the song until after the full CD has sold some? This practice just seems like it will cause them more problems.

Missing numbers... (4, Insightful)

drew (2081) | more than 8 years ago | (#14886485)

Regardless of one's ability to draw meaningful conclusions from one datapoint, they also left out another key figure.

Ne-Yo's CD In My Own Words sold 301,000 copies using this method. Chris Brown's Run It, that was in the itunes store, sold 154,000 copies in its first week. Ne-Yo's So Sick was downloaded approximately 3.4 million times on the peer to peer networks during the week of his album release while the album Run It! was downloaded approximately 5.3 million times in the same release period.

OK, so how many downloads from "Run It" were sold in the ITunes store during that time period? If it was only about 50-100K songs, then they may have a point, but if it was something along the lines of 500K songs, then all they did was to give up some profits on CDs to make the same money on downloads. So, yeah, Duh, people are going to buy less CDs if they have the option to buy a CD or buy from iTunes than they will if they only have the choice to buy CDs.

It's like a deli that sells both ham and roast beef sandwiches complaining that they don't sell as many ham sandwiches as the deli down the street that only sells ham sandwiches. Big deal...

pop music value meals (3, Interesting)

fermion (181285) | more than 8 years ago | (#14886489)

I see this kind of like the fast food value meals. A customer can either buy an individual item, or for more, but less than the seperate items, the customer. The fast food stores implement these schemes to, among other things, increase the average order price. This then begs the question of why fast food stores don't implement a value meal only policy? Sure, some customers would be lost, but the price of a hamburger probably barely covers costs.

This attempt by the labels to push albums is nothing new. The last time we saw, which was only several years ago, was when they were trying to stop the sales of singles. The singles were cutting into sales of albums, and the theory was that if singles were not available, then the consumer would be more likely to buy an album.

I think the more likely aspect is the key. Wiithout singles, one might be more likley to record a song from the radio or just copy it from a freind. Even then there were albums that are so bad no one wanted anything but the same album. Not even the b-side was worht anything. With singles it was more likely all parties would be compensted for the product the consumer wants, and if we dig our heads of the artistic bigotry, when one is talking about selling a million albums, we are fundementally talking about providing a product that the student wants.

So, when singles were pulled, it was a statement that the labels would tolerate more copying in the hope they would end up with increased overall profits, even if the formula used to calculate royalties meant the perfomers and other parties recieved less. I wonder if this algebra will work out in the current climate of rampant unlicensed distribution of any hit track, not to mention much more sophiticated distribution channels for used albums. Frankly there have been way too many times lately when I have gone to iTunes hopeing to legally acquire a track, only to find it unavailable or only as an album. If it is an older album, I can get it used for much less than iTunes. If it is a new album, I soon will be able to get it used. Does this help the company bottom line?

Back to the original question. If the fast food joint only offered value meals, then a person with only a burger would cause a great deal of havok at the unfairness of the situation, disrupting bussiness. And such a person would have a point. The burger is seperate, you could sell it seperately, but you choose not to. It is simply not worth the effort, despite the clear benifits.

Dear Mr. Quirk, aka Rhapsody guy... (1)

TCQuad (537187) | more than 8 years ago | (#14886509)

every single track that you are worried about is available for free whether you want it to be or not

From the industry's standpoint, every single in your rental collection is available for free, because there is no downloading charge. They get the same amount of revenue if the customers download their track or not. If they delay release on your platform and force people to buy the CD instead, they have gained extra money.

Poor summary (2, Insightful)

dilby (725275) | more than 8 years ago | (#14886528)

Seems to me the issue here is not about delaying the release of songs on itunes increasing cd sales but not releasing songs as singles increasing album sales. The fact that the song wasn't released on itunes etc was only due to the record company wanting to bundle the song with the rest of the album, because surprise, surprise they make more money.

It looks to me like the record companies took a page from Microsoft's book.

How about just selling singles? (2)

mgkimsal2 (200677) | more than 8 years ago | (#14886617)

There seemed to be nothing in the article about selling physical singles. The choice is selling singles online, or promoting a single on the radio and only selling a full physical CD. Where's the middle ground? Record companies have been bitching about sales going down, but have made it harder to get the songs they promote. Hint - offering it in more formats (physical and digital) will increase sales.

What it promotes is more illegal downloads... (2)

Jackie_Chan_Fan (730745) | more than 8 years ago | (#14886640)

Keep it up RIAA. You're going to lose this one :)

CD *sales* ? (0, Flamebait)

nurb432 (527695) | more than 8 years ago | (#14886646)

Who buys cds anymore?

Ok, let me clarify that: Who buys them from RIAA supported producions? Indie labels dont count, as they should be supported.

Costs (1)

bladedom (957069) | more than 8 years ago | (#14886656)

That's 154,000 copies that aren't returnable vs. some percentage of CD's returned for defect, or fraud. Plus packaging, plus transportation, plus overhead. Plus you there's none of that couterfeiting and such. And the record companies can't fudge the nu,bers in theor favor. All in all more a win for the artist.

Retail: Yes, but at the right price (1)

Admodieus (918728) | more than 8 years ago | (#14886693)

Right now I buy more CDs at retail than on iTunes Music Store for a few reasons: 1) I have two computers with iTunes that I want to put the CD on, so just popping it in the drive and ripping it in is much more organized and efficient. 2) Best Buy sells most of the CDs I buy at $10, which is what I consider a fair price. Next year I'll be away at college, though, and I'm fairly certain my acess to Best Buy will be severly impaired, and I'll only be using one of my computers heavily (laptop). Thus, I'll probably buy CDs through the iTunes Music Store, as they sell Music Store cards in the campus bookstore. There's simply no reason to restrict access to one method of purchasing or the other. You're simply hurting your own sales one way or another.

News Flash: Hype and delayed gratification sells! (3, Informative)

bill_kress (99356) | more than 8 years ago | (#14886704)

When the DS was unavailable a couple years a go it sold like hotcakes, same with xbox360 this year. Special colors (my wife wants a Pink DS) are only released in small quantities and therefore are highly desired.

Making people listen to a song on the radio without making it available for purchase means that it will hit the charts hard when it does release. Is there anyone who could possibly be surprised by this?

two artist songs compared...conclusion both SUCK! (0)

Anonymous Coward | more than 8 years ago | (#14886757)

First off i didnt' know who these people were. So I investigated and listened to their songs. Conclusion, more "Music Mill Retards". The music sucks.... Just like everything else that the music industry just "churns out" to formuliac suck-a-tude.

I'm so sick of hearing something a unique artist that I actually enjoy, and then have the music labels sign 10 different bands with slightly less talent all copying that same sound, then complain that music sales are "off" and try and blame it on peer to peer networks or legit online downloads.

that biz is just full of asstards just like the movie industry, who i'd like to thank for killing superhero and sci-fi movie genere (aeon flux, ultraviolet, electra, bloodreign, etc.)

Correlation and Causation (2, Insightful)

Dalroth (85450) | more than 8 years ago | (#14886770)

Repeat after me... Correlation is NOT causation!

Thank you,
Bryan

err (1)

karearea (234997) | more than 8 years ago | (#14886772)

Can we please have examples of good music?

I mean I've never heard of those 'artists' so I can't say what the target market is. I mean are they teeny bopper type stuff, or hardcore rap? It'll make a difference to what socioeconimic group the 'music' is targeted towards.

I mean Bowie would have a different target market to Brintey Spears (or whoever the lastest half naked prepubesent music factory output is). And particular target markets will have greater tendancies to CD sales vs online sales and singles sales vs album sales.

One Song vs Entire Album (2)

TheNinjaroach (878876) | more than 8 years ago | (#14886920)

There are usually only two or three songs that sell an album. Price of an album: $12-$18 Price of three iTunes: $2.97 If execs can force people to buy their three good songs for $12-$18, why would they want to break the album into pieces and only sell the good stuff at a much reduced profit?
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