July 28, 2003

Whah, Whah, Whah...

...that's pretty much all the music industry and their mean-ass bulldog, the RIAA, has been saying for some time now. They say that the both the number of units (that is, CD's) shipped and sold have gone down dramatically since online file sharing has become more widespread. Now, I'm not going to argue that online file sharing has no effect on in-store or online music sales, because I realize that's definitely happening, but I think that the RIAA is overstating the effect of online file sharing on their sales (read, profits) in order to provoke others in the business community and government representatives (not to mention gullible, RIAA tools who actually believe swallow their rhetoric) to help them make online file sharing completely illegal, if not just morally reprehensible in people's minds. I, for one, find it hard to feel sorry for an industry that pulls down over $12 billion a year (and that was during 2002, a supposedly bad year for the industry due to file sharing) by fleecing both musicians and music fans, but it makes me downright angry to think that they're fudging their numbers so they can violate internet user's rights so they can get their revenue back up to $14-15 billion a year.

For some time now, I've been thinking to myself, "Why are they so shocked that sales are declining when we're in the middle of a (secret) recession, we're constantly "at war" with "terrorists", and unemployment is rampant." Now, I don't even pretend to know that much about economics... we all know I wasn't actually paying attention in AP Econ with Spagel-bagel... but even I know that when times are bad, people buy less unnecessary goods... and I definitely consider CD's to be unnecessary. It seems pretty obvious to me that the music industry can't be the only one experiencing loses in sales during this new dark age of American history we've come into. Auto, travel, luxury, retail and real estate sales have all taken a hit since 9/11 and throughout George W's bullshit war on terrorism. If people don't have jobs, aren't earning enough money or just aren't earning as much as they used to, of course they're not going to go out and buy a $20 CD that sucks anyway when they need that money for food, housing, bills, transportation, etc. So, I've been wondering... are the reported loses in sales and revenue really due to file sharing, thus making file sharing (and all those who do it) the enemy of the RIAA, or is it that file sharing is only part of the problem which really stems from other situations in the world... such as our fake president, fake representation, fake wars and "non-existent" recession.

I'm not alone in this thought, and apparently, other, smarter people than me have not only thought of this, but have written really good articles about it:

Business Week Online: Big Music's Broken Record

O'Reilly: The Music Piracy Myth

O'Reilly Weblog: Economic Reality Check

After reading these articles, I feel more justified in my suspicions that the RIAA's whah-whaing and boo-hooing is actually exaggerated to make it look like file sharing is solely responsible for their "crisis", when they and everyone else in the (intelligent) world seems to know that other factors are involved. One major factor is price elasticity of demand. Apart from decreased consumer confidence and a decrease in the number of titles released by recording companies, unemployment, decreased wages and wages depressed due to high unemployment mean that incomes are down so it's only natural that demand for CD's is down. Since CD's are luxury items, "...in a recession or economic slowdown, these items of discretionary spending might be the first victims of decisions by consumers to rein in their spending and rebuild savings and household financial balance sheets."

It may be true that the availability of free downloads is decreasing music sales, but if the downloader wasn't in the market for a CD anyway, due to the need to economise, I don't really think that's a loss to the music industry. Much like people who aren't even looking for a job aren't included in unemployment statistics, how can people who are too poor at the moment to buy CD's included in sales losses when they download music. In olden times, before file sharing was possible, such people may have just gone without the music, taped it off the radio or copied it from a friend, but we do have the technology to get music from a variety of strangers (provided the music you want is mainstream enough to be available) and we do have a right to privacy on the internet, so I say to the RIAA, "Shut Up You Fucking Baby"!

0) $paginate_current_page = 0; $paginate_sections = array( 0 ); $paginate_top_section = $paginate_sections[$paginate_current_page-1]+1; $paginate_bottom_section = $paginate_sections[$paginate_current_page]; } else { $paginate_top_section = 1; $paginate_bottom_section = 0; } $paginate_self = '&' . $_SERVER['QUERY_STRING'] . '&'; $paginate_self = preg_replace("/&page=[^&]*&/", "&", $paginate_self); $paginate_self = substr($paginate_self, 1, strlen($paginate_self) - 1); if($paginate_self == '&') $paginate_self = ''; else $paginate_self = htmlentities($paginate_self); $paginate_self = basename($_SERVER['PHP_SELF']) . "?${paginate_self}page"; ?> Posted by Kristina at July 28, 2003 01:41 PM

The RIAA has been crying about profit slumps since the late 90s, in the height of the dot-com boom (it's amazing what a different a few years and a new president can make). Back then people were at least willing to listen to them, since the industry was "losing money" in a time of financial plenty.

But when people started to actually look at the RIAAs numbers, they noticed something pretty weird. Sales in the music industry had only fallen for CD singles, which is what you might expect at the height of the Napster craze. But sales of full albums had actually increased considerably.
So, one could surmise that the Vice President of CD Singles (if there is such a thing) desperately wanted to save himself from the wrath of the President of All That is Entertainment. And thus launched a smear campaign against online file sharing.

Once that campaign was started, it's not like the RIAA could reverse their statements and say that file sharing was fine and dandy. "Consistency of brand" and all that. So once they had put a few million dollars in, the only options became win or lose....there was no longer any hope of withdrawal.
(keep in mind the two previous paragraphs are speculation...I have no inside view of why the RIAA is pursuing this tack)

So, in a way, I think the RIAA has trapped themselves into a terrible situation that, if they were smart, they would abandon with haste. If they persist in indiscriminately suing individual file sharers, they're fucked. There's no way they'll ever see hundreds of thousands of dollars from Joe Schmoe bus driver. So they're paying for the hundreds of lawsuits out of their own pocket. And now newspapers are having a field day with the story. After all, the PR is fine if a company sues the pants off a 16-year old who's running a CD-burning business out of his own home. But it's a nightmare when "k00lg1rL1111@KazAa.com" turns out to be a little old grandmother who had her granddaughter show her how to download Miles Davis singles.

Posted by: Jacob at July 28, 2003 03:24 PM

Right on, Kristina! You put into words many of the feeling and thought I have about this subject. The RIAA is behaving like a whiny baby child that crapped its pants and somehow got the court system to believe it's shitty diaper gives the RIAA legal credibility.

I'm going to resist any quibbling over economics. I think you hit the nail on the head.

And I think it's time for record labels and other companies to stop paying their dues to the RIAA because their money is being mis-spent.

Posted by: cody at July 28, 2003 03:40 PM

Lovely metaphor extension, Cody :)

Posted by: Kristina at July 28, 2003 03:47 PM

Thanks. Does that mean I've finally earned a link to my blog on your site?

Posted by: cody at July 30, 2003 01:39 AM


here's a thought that may or may not be related. in the motion picture world we have the MPAA, but there's also SAG, the writers' guild, and the directors' guild. intuitively it would seem that these four powerful forces (though, admittedly, the MPAA and SAG are probably more powerful than the other guilds), keep each other in check. but in the music industry all you ever hear about is the RIAA. is there an artists' guild in the music industry? it would seem not, since record companies still "own" performers much in the same way that movie studios used to own actors.

so, maybe if the other players in the music business would organize, we'd start to hear some other voices and the RIAA would be forced to moderate its positions.

just a thought.

Posted by: holohan at July 30, 2003 08:36 AM

I saw the "Zing!" and I thought that comment was from Gene... but Gene is like the "God" of cementhorizon (not that I believe in God). He created this place and gave us all user rights and stuff, but he's not really ever around on comment strings... he's everywhere but nowhere. Eerie.

Anyway, Cody, you do have a link on my site... it was on the posting about you. You can't blame me for not having a link on my "links" on the main page, because there are no links there... you know I'm too lazy for that.

Mat, I'm not really all that sure if artists would be the contrary force that you imagine they would be. I know that actors oppose the MPAA all the time for censoring movies and giving them harsh ratings, making the movie "inaccessible" to younger audiences, but this isn't about censorship. It is possible that when movie downloading and DVD copying becomes less slow and shitty, actors will take a similar stance as musicians seem to have taken. I see videos on MTV with artists opening displaying and using their iPods (*barf*) and artists like Metallica, Dre and Madonna actively working and speaking out against file sharing. Perhaps it is because of the nature of their contracts with the big corporations that they're being this way, but I don't think unionizing would really change their position on this issue because of the way it has already been framed. Convincing them that it isn't stealing and that it can actually be used to promote sales of albums, merchandise and concert tix would be an ugly, up-hill battle.

Posted by: Kristina at July 30, 2003 10:28 AM

i think a compelling argument in favor of free internet file sharing (free as in easy and open, not necessarily free of charge) is that when you enforce copyright laws you're not really helping the people who produced the information in the first place (the artists), but the greedy corporate bastards who own the information and the artists (teh RIAA).

but, if it's a given that musicians oppose file sharing as well, then i don't see much justification in even opposing the enforcement of copyrights. i'm all about the free flow of information, but if you want information to be generated in the first place, you need to make sure the people who generate the information are happy.

Posted by: holohan at July 30, 2003 10:55 AM