Tuesday, January 11, 2011

Methinks the music industry doth protest too much!

(With apologies to William Shakespeare, of course!)

The British Phonographic Industry, or BPI, represents the music industry in the UK. It recently released its analysis of sales figures for 2010, about which it had these bleak words to say:

A third successive record year for singles and the emergence of a mainstream market for digital albums failed to halt a further overall decline in UK music sales in a market that remains heavily distorted by still-increasing levels of illegal downloading, new Official Charts Company data released today by the BPI confirmed.

Combined sales of digital and physical albums overall fell by 7.0% to 119.9m in 2010, with growth in digital sales failing to offset the decline in physical CD sales. Despite the encouraging digital albums sales of 21.0m, growing 30.6% on last year’s sales of 16.1m, the market for CD albums declined 12.4% to 98.5m from 112.5m in 2009.

The singles market recorded an all-time sales high of 161.8m, 5.9% up on 2009’s tally of 152.7m, reflecting the unparalleled choice and value on offer from the UK’s burgeoning digital music retail environment. 5.2m tracks were downloaded in the final week of 2010 – the first time weekly sales have surpassed 5m. Sales of digital single tracks represented 98.0% of overall singles sales, with CD singles only accounting for 1.9m sales, down on last year’s total of 2.5m.

. . .

“ ... Despite unprecedented demand for music, and strong innovation offering consumers new ways to access music online, legal downloads are unable to offset the decline in CD sales because they are dwarfed by illegal competition.

“We will continue to do everything we can to promote the legal market, but meaningful action to tackle illegal downloading remains absolutely critical if we are to stabilise British music sales, let alone return to growth. Without it, investment in new digital services and in British musical talent will begin to dry up.

Tony Wadsworth, BPI Chairman, added, “Consumer choice for recorded music has never been greater – both in depth of catalogue and the many ways to buy it. It is now crucial that action to stem illegal downloading, incentivising continued investment in this popular art form, is implemented decisively and urgently.”

There's more at the link. Bold print is my emphasis.

Sounds bad, doesn't it? However, analysis of the very same figures by a blogger who specializes in file-sharing reveals a rather different picture.

Last week the BPI released their overview of 2010 sales volumes in the UK. As always, their press release was filled with claims that piracy is ruining their industry and most mainstream media was quick to republish this propaganda. However, we can use the very same data to show that more music is being sold than ever before, and argue that piracy is likely to have had very little impact.

We’re not going to argue about the exact impact of piracy in this article, but we do want to balance out the music industry’s propaganda a little bit. By doing so we hope to show that the music industry isn’t doing so badly as they claim. In fact, year after year more music is being sold.

What’s changing is the type of music consumers buy, and this change is driving revenue down. The question, however, is whether piracy has anything to do with this change. We doubt it, and we’re going to show why.

. . .

In 2010 the BPI reports that there were 281.7 million units sold, which is an all-time record. Never in the history of recorded music have so many pieces of music been sold, but you wont hear the music industry shouting about that. In fact, the music industry is selling more music year after year and today’s figure is up 27% compared to the 221.6 million copies sold in 2006.

But, instead of praising the increasing consumer demand for music, the industry cuts up the numbers and prefers to focus on the evil enemy called piracy. By doing so they spin their message in a way that makes it appear that piracy is cannibalizing music sales. But is it?

In their press release the BPI points out that album sales overall were down by 7%. Although digital album sales were up 30.6%, physical CDs were down by 12.4%. If we believe the music industry, this drop in sales of physical CDs can be solely attributed to piracy. This is an interesting conclusion, because one would expect that piracy would mostly have an effect on digital sales.

We have a different theory.

Could it be that album sales have been declining over recent years because people now have the ability to buy single tracks? If someone likes three tracks from an album he or she no longer has to buy the full album, something that was unimaginable 10 years ago.

This theory would also fit the sales patterns of the last few years, where album sales are down year after year while the number of individual tracks sold is increasing rapidly. In 2010 the UK music industry sold 161.8 million singles (digital and physical) compared to 66.9 million in 2006. Where does piracy fit in here?

Could it possibly be that piracy is only affecting album sales and not single sales? Would that make sense?

Or could it be that the consumption habits of the average music consumer have changed in the last decade? You never hear the music industry talk about the digital music revolution where an entire generation of people have never even owned a CD. To these people the album concept doesn’t mean as much as it does to older generations.

I’d hate to break the news to all the suits in the music business but the CD is dying, and the album is dying with it.

. . .

We’re not here to argue that piracy has no effect on sales at all, positive or negative, but we do want to point out that the music industry might be chasing a ghost while they ignore the big elephant in the room. The music industry isn’t dying, it’s evolving.

Again, there's more at the link. Once more, bold print is my emphasis.

It's funny how a glass can be half-empty or half-full, depending on how one looks at it or describes it, isn't it? Same glass, same contents . . . but one side is negative, and one side is positive. I'm still a fan of CD's, and I've never bought a track online in my life: but I'm at the point where I'll no longer buy a CD for the sake of one or two good tracks on it. If I don't like the entire recording, or most of it, I don't buy it. (And no, I don't have a single piece of pirated music on my computer! I own every CD I've ripped into digital format.)

The music industry, like the buggy-whip 'industry' of the late 19th century, or the mainframe computer industry of the 1960's and 1970's, or the cathode-ray-tube (CRT) manufacturers of the 1990's, has got to adapt to change . . . or die. I'm getting very tired of massive lawsuits and legal threats issued by industry associations, here or elsewhere. They're fighting to maintain an insupportable structure, one that the market's already left behind. I fully agree, piracy must be stopped (or at least minimized): but it's futile to blame the problems of an outdated, outmoded, archaic business model on piracy. If they won't confront the real problem, they're never going to be able to fix it.

Methinks the BPI doth protest too much indeed!


1 comment:

Anonymous said...

I would be hard pressed to number the (significant) number of times in which I have 1.) heard a song on the XM radio, then 2.) downloaded an illegal copy from the internet, and then 3.) after a week of listening to it, decided to go ahead and buy the album.

Sometimes I get to stage 2 and decide I don't really like it all that much, and then delete it.

Anonymous for this comment for obvious reasons. ;)