Quote:
Originally Posted by Sean
Of course it applies. Lost sales = lost money. Lost money = hurt artist.
Providing a digital file may not require the same cost as the actual pressing of a physical cd, but the creation and marketing of the music does cost the same whether it's a cd or a digital file. At least some of that money needs to be recouped through sales, and the success of a release is primarily measured through number of sales.
And as for how easy it is or isn't to obtain digital files illegally, it seems to be pretty easy. A study released last summer showed that an average teenager's digital music player contains an average of 1770 tracks, and of those, an average of 842 tracks were obtained illegally. That's 48% of an average teenager's music collection.
Now in a more recent study released by the International Federation of the Phonographic Industry (IFPI), they estimate that around 10% of illegal downloads are probably lost sales. Granted, the IFPI is basically the "global version of the RIAA", so their numbers will surely be questioned, but the 10% assumption doesn't sound all that unreasonable to me.
Now here's something that I don't think a lot of people consider. That 10% probably isn't evenly distributed between all labels and individual releases. So if a specific single is immediately leaked onto a P2P website, it'll take a bigger sales hit than one that doesn't get leaked. And if the leaked one is from a small independent artist, it does serious damage to that artist. So overall, it may only be around 4.8% of the average teenager's music files that represent lost sales for the music industry as a whole, but the individual damage it can do to lesser known artists can still be devastating. |
Of course the question is, how many sales are lost? Dealing with a smaller-scale artist it seems pretty much impossible to tell. I just wonder how much of it has to do with leaks, which is something I think that IS bad for the industry. Discs that get leaked 6 months ahead of the release date have to have lower-than-expected sales. If the industry could stop them I think it would help a lot.
As for the IFPI numbers...such a study seems really tough to do, as I've read some that claimed the opposite. We DO know CD sales peaked in the age of Napster, when free downloading was also at a peak. The RIAA purposely misreports their numbers to make it look like things are worse than they are:
http://www.musicdish.com/mag/?id=9452
They also point their fingers at downloading as an explanation even when they release something like fewer CDs from one year to the next. The internet model seems like it could kill off the idea of the megastar, from whom the RIAA profits immensely. Honestly I believe their problem with downloading is that it opens peoples ears to different types of music, in particular stuff not promoted or even on their labels. When five releases sell 20 million copies apiece, the RIAA's profits skyrocket - however, spread those 100 million sales across many different albums and they make less.