AP Blows Story on Digital Music

This article on digital music has some of the most utterly bizarre quotes I have ever read:

"Digital music finally took off in 2005, according to data published ahead of this week’s Midem music trade show in Cannes, while lawsuits kept illegal file-sharing in check."

First off, digital music took off seven years ago in 1999, when Napster ignited the P2P craze of swapping mp3s. Last time I checked, MP3s were digital music.

Further, file sharing numbers have actually increased, despite the harrassing litigation. 

Two factual errors is a rather inauspicious way to start a column, but such is life in an era when aping press releases is what passes for reporting.

Let’s continue:

"But for record companies, the growth of legitimate downloads and the partial victory against piracy have come at a price. Many in the industry are concerned that the scramble to license out catalog for digital sales has done lasting damage to profitability.

"Music has become a disposable item," said Nicholas Firth, chairman and CEO of BMG Music Publishing, a division of Bertelsmann AG. "For many people it’s a traffic builder."

Partial victory against piracy? WTF is this guy smoking? 

Legal downloading is a drop in the bucket compared to what is exchanged on P2P. Last year, 332 million songs were purchased via iTunes Music Store and other legit downloading sites. According to Music Industry News Network, at any given instant, there are 6.86 million P2P file sharers online in the US, and 9.47 million online globally. Given that most P2P users grab a fair amount of tracks per session, there are literally billions — Billions! — of swaps per month.

Annual legal downloading of music is equal to about a week’s worth of P2P.

Digital music sales tripled to $1.1 billion (euro900 million) last year, according to industry trade body IFPI, but failed to offset an estimated 6 percent decline in CD sales.

CD sales actually dropped 8% (or 7% if you do not include singles) but what the hell is an actual fact amongst friends and hacks? 

"Once hailed as the industry’s savior, iTunes is increasingly seen as part of the problem.

"I’m hearing that the artists aren’t happy, the publishers aren’t happy. Someone other than Apple needs to be happy for this industry to grow," said Amit Shafrir, president of AOL’s premium services arm."

WTF?  Quoting AOL on music? PUH-leeze — like AOL has any authority on anything these days; If you want info on how to put together the world’s worst merger, you go to AOL for the stright dope. But for anything else tech/content/digital related, AOL is ridiculously irrelevant, and has jack to contribute. I guess no one on the B list was available, so they went with the C — if not D – list.

And ITMS is part of the problem? This is unmitigated Recording Industry BS, and its astounding that any journo in the world would repeat it without speaking to an actual artist. (Pathetic).

I rarely come out and say this, but, this is amongst the most embarrassing reporting I have come across on the music industry.  What a steaming pile of enzyme-free donkey fazoo  . . .



Download Growth Concerns Music Industry
Record Companies Struggle to Defend Value As Growth of Legitimate Downloads Comes at High Price
Laurence Frost
AP, Monday January 23, 6:21 pm

What's been said:

Discussions found on the web:
  1. DG commented on Jan 24

    As someone who has more than a passing familiarity with P2P file sharing, I’ll say this:

    The music industry brought this on themselves in two ways. Firstly, they were extremely slow to react to the end of their years abusing the consumer. Secondly, the music industry ITSELF, prompted by the advent of music television, moved twards a “looks” driven method of selling music, rather than substance driven. As a result, sub par albums have been produced for years, and people just got tired of spending $19.99 on an album with ten tracks, two of which were good.

    They did it to themselves. People are just reacting.

  2. John Navin commented on Jan 24

    The reporter needs to check with my 18-year old son before writing any stories on this subject. Or just about any 18-year old — you can find them at the CD store listening, but not buying.

    A revolutionary concept for a modern journalist: go to the source and ask questions.

  3. royce commented on Jan 24

    I’ve seen a lot of really bad AP business stories recently, so this one doesn’t come as a surprise.

  4. Matt Schwartz commented on Jan 24

    You hit the nail on the head with this one. This month’s Rolling Stone had an article that touches on the digital music movement and re-thinking the music industry business model. The majors are just wining and complaining because their business model is out of date.


    “The major labels want to say the glass is half full,” says Gwen Stefani’s manager Jim Guerinot. “I think everybody’s getting the message: You better get a fucking smaller glass.”

  5. Stu commented on Jan 24

    You look back at the history of the music biz, and I have to admire Geffen’s timing, having sold his music label in 1990 for a half billion dollars to MCA, before it was passed around a bunch of international investors including Matsushita (Japan), Seagrams (Canada), Vivendi (French)…

    It takes a smart man to sell at the top, and Geffen had the foresight to sell, before all this piracy became the flavor of the day, and the entire capitalization of the music industry and than some, went to the enabler of digital music – Apple – away from the content owners – the labels.

  6. Jack commented on Jan 24

    If anybody bothered to interview the people that actually listen to, and purchase digital music, the story would have been much more positive. There is finally a growing number of legit choices for digital music at much more reasonable and fair prices now. The music industry is just fretting over its inevitable loss of power and control.

  7. Sean commented on Jan 24

    Geffen sold in 1990.
    Now we know it was a top, but that’s because we have 20/20 hindsight.

    If he foresaw the rapid advent of file sharing ~ten years down the road, he wasn’t only a genius, he was Nostradamus.

  8. JK commented on Jan 24

    Actually, CDs are digital music also, as are DATs. So digital music took off a long time ago. What’s new is pay-for legal online music downloads (PFLOMDs?).

  9. Stu commented on Jan 24

    Sean, you got that right. Maybe I am giving Geffen too much credit.

    But, he is the same guy, who was smart enough to give Eddie Lampert a few of his of his Matsushita dollars, back in the 90’s.

    Luck, Skill, Timing. A good combo:)

  10. Herb commented on Jan 24

    It seems that the industry in general has collected some of the most inept and incompetent business minds around. If they’re not careful, they’ll end up in the same boat GM and Ford are cruising around in.

  11. Jeff commented on Jan 24

    “They did it to themselves. People are just reacting.”

    They lost me when I found that I could choose from either paying $16 for the CD new, or could wait and find it for $8 used. I’ve got around 2K cd’s, and probably only 1/3 of them were bought for retail price.

    I’d much rather my money went to the artist that made the music, but given the choice of either one new CD or 2 used ones, it’s a pretty simply decision. The ITMS really isn’t a viable option because I enjoy the liner notes of reissues of classic jazz and rock, and lossy files without any accompanying documentation really doesn’t cut it – especially when I can get the same thing used for less.

    The DVD business is going down the same path, with their endless re-issues, re-packaging, and double-dipping “special editions.” Give me the movie in a quality package with the features I want, and don’t make me regret the decision six months later when a “better” package comes along.

  12. David Silb commented on Jan 24

    Mariah Carrey might surpass the Beatle’s in #1 hits.

    Barry asked if this is a sign life is meaningless or if there’s no god.

    I sided with meaningless.

    The public is showing the music biz that if it weren’t for their lawyers the RIAA they might be meaningless.

  13. Hambric’s Curve commented on Jan 24

    BMG Music CEO Speaks in Cannes, Crowd Shouts Freebird!

    (Thats what should have happened)
    Youve got to be kidding me! Download Growth Concerns Music Industry, by Laurence Frost, gives us a peak at just how out of step the music industry is with consumers. The sub headline, Record Comp…

  14. Jason commented on Jan 25

    “You better get a smaller fucking glass” needs to be the credo of the new music industry. The recording business is not going to support private jet lifestyles anymore. The public just doesn’t value their product that much anymore, and, as others have pointed out, they brought it upon themselves.

    The new industry is going to look more like what I imagine the comic book industry looks like: lots of product, dedicated customer base, but nobody getting rich.

  15. Zach commented on Jan 27

    The AOL merger was one of the greatest mergers of all time. AOL used an incredibly over-valued assett to purchase a more stable under-valued one. Time Warner is who you see about terrible mergers.

Read this next.

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