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The music industry is changing so fast. I feel sorry for the industry, despite their bad karma. Illegal digital downloads disrupted everything, and cut profit

The music industry is changing so fast. I feel sorry for the industry, despite their bad karma. Illegal digital downloads disrupted everything, and cut profits substantially. Luckily, Apple and Steve Jobs showed up and offered a brief reprieve. But now, just a 10 years into paid digital downloads, when the new revenue is still a tiny fraction of the old revenue, the field is disrupted again by streaming. And as with previous disruptions, it appears revenue will again be cut dramatically. I'm not sure what the takeaway is. Maybe the importance of owning your distribution channels?

newaccountfool 12y ago
Have you got concrete fact that illegal downloads cut profits?
- nostromo 12y ago
  You know I don't. And I know you don't either. Unless we can run a study whereby some portion of the population is entered into a control group and doesn't have access to the internet, it'll remain a question about interpreting data and not of fact.
  - newaccountfool 12y ago
    So your statement was just a guess, just checking. I don't know the data from the record companies because I wouldn't bother reading it for fear of bias, I just know that a lot of the 'anti piracy' groups never actually put money back into the music industry, its just more money to fund more lawsuits.
    - GotAnyMegadeth 12y ago
      > I wouldn't bother reading it for fear of bias That's a dangerous stance in general, probably better to listen to both sides whilst acknowledging that they are both likely to be biased in their own favour.
      - newaccountfool 12y ago
        Yeah true, I just know MPAA and RIAA have been know to publish information that is later found out to be false.
  - kllrnohj 12y ago
    A study like this one? That found that illegal downloading INCREASED sales, not decreased? http://musicfeeds.com.au/news/study-confirms-illegal-downloads-increase-music-sales/ http://musicfeeds.com.au/news/study-confirms-illegal-downloa...
- Jgrubb 12y ago
  I have no concrete facts, but my intuition tells me that commodity CD-Rs played as big a role. I think that whole line about illegal downloads is industry propaganda. You never hear about how illegally burned CDs brought down the industry, when everybody I know was ripping CDs from each other for a period of years. Why? Because record labels' parent companies were the ones selling CD burners hand over fist.
deleted 12y ago
[deleted]
humanrebar 12y ago
> I'm not sure what the takeaway is. Maybe the importance of owning your distribution channels? Supply of all types of media content is way up. There are only so many hours in the day, so demand is comparatively inelastic. This means per-unit cost has to go way down. This is the general trend for pretty much all media, including things normally categorized as something else, like news and stage productions. On the plus side, distribution is basically free and gatekeepers are losing their monopolies and monopsonies, so creators and consumers of niche products can connect better than ever.
- anigbrowl 12y ago
  Connecting with more people is only as good as your ability to monetize those connections, though.
  - humanrebar 12y ago
    Unless you're a twelve-year-old showing off your Minecraft mods or your new styling tips. Then you're getting non-monetary value (friends, fun, reputation) from creating content, and you're unintentionally competing for the attention of kids and tweens that used to buy comic books and Backstreet Boys albums.
    - anigbrowl 12y ago
      You said 'creators and consumers of niche products' which implies commercial intent to me, and we are having this discussion in the context of music publishing. You're not wrong, but I think this is a loss of focus.
      - dublinben 12y ago
        Hardly. Commercial content has been challenged and displaced by non-commercial, purely cultural content like never before. Young people would rather see a goofy image macro that their friend made than some lame sitcom by old white guys in Hollywood. For the first time ever, this non-commercial content lives side by side with commercial content on massively popular portal sites like Faceebook, reddit, and YouTube.
belorn 12y ago
> cut profits Every year, the average household spends proportional more money on entertainment than the year before. If you only look at one part the market, the conclusion will be equal incorrect. First it was radio, the cassette tape, VHS, P2P, streaming, ectra ...), and each time someone proclaimed this was going to doom the "industry". The music industry could argue that illegal music is pushing purchases to the movies, and the cinema could argue that illegal movies is pushing purchases to music services. Why should anyone believe either claim when the total profits from entertainment is going up?
- rtpg 12y ago
  just because more is spent by households doesn't mean profits have gone up. Maybe companies have to spend more to sell their products now (which might seem silly but I'm pretty sure advertising is one thing which _hasn't_ gotten cheaper in most cases).
betterunix 12y ago
"Illegal digital downloads disrupted everything, and cut profits substantially" Only because a decade beforehand the RIAA decided that instead of working on ways to monetize the Internet, they would work on ways to make computers less useful for music distribution. Basically the recording industry's shortsightedness and failure to embrace the greatest communications revolution since the printing press led to everything else you described. To put it another way, the RIAA could have pushed for Congress to set up a micropayments system for music downloading, before most people even knew about music downloading. Instead they lobbied for the DMCA and spent their money developing DRM schemes that failed before they were ever deployed. Their "bad karma" is a result of their response to the complete failure of those efforts: abuse of the legal system on a massive scale.

newaccountfool 12y ago

Have you got concrete fact that illegal downloads cut profits?

nostromo 12y ago
You know I don't. And I know you don't either. Unless we can run a study whereby some portion of the population is entered into a control group and doesn't have access to the internet, it'll remain a question about interpreting data and not of fact.
- newaccountfool 12y ago
  So your statement was just a guess, just checking. I don't know the data from the record companies because I wouldn't bother reading it for fear of bias, I just know that a lot of the 'anti piracy' groups never actually put money back into the music industry, its just more money to fund more lawsuits.
  - GotAnyMegadeth 12y ago
    > I wouldn't bother reading it for fear of bias That's a dangerous stance in general, probably better to listen to both sides whilst acknowledging that they are both likely to be biased in their own favour.
    - newaccountfool 12y ago
      Yeah true, I just know MPAA and RIAA have been know to publish information that is later found out to be false.
- kllrnohj 12y ago
  A study like this one? That found that illegal downloading INCREASED sales, not decreased? http://musicfeeds.com.au/news/study-confirms-illegal-downloads-increase-music-sales/ http://musicfeeds.com.au/news/study-confirms-illegal-downloa...
Jgrubb 12y ago
I have no concrete facts, but my intuition tells me that commodity CD-Rs played as big a role. I think that whole line about illegal downloads is industry propaganda. You never hear about how illegally burned CDs brought down the industry, when everybody I know was ripping CDs from each other for a period of years. Why? Because record labels' parent companies were the ones selling CD burners hand over fist.

deleted 12y ago

[deleted]

humanrebar 12y ago

> I'm not sure what the takeaway is. Maybe the importance of owning your distribution channels? Supply of all types of media content is way up. There are only so many hours in the day, so demand is comparatively inelastic. This means per-unit cost has to go way down. This is the general trend for pretty much all media, including things normally categorized as something else, like news and stage productions. On the plus side, distribution is basically free and gatekeepers are losing their monopolies and monopsonies, so creators and consumers of niche products can connect better than ever.

anigbrowl 12y ago
Connecting with more people is only as good as your ability to monetize those connections, though.
- humanrebar 12y ago
  Unless you're a twelve-year-old showing off your Minecraft mods or your new styling tips. Then you're getting non-monetary value (friends, fun, reputation) from creating content, and you're unintentionally competing for the attention of kids and tweens that used to buy comic books and Backstreet Boys albums.
  - anigbrowl 12y ago
    You said 'creators and consumers of niche products' which implies commercial intent to me, and we are having this discussion in the context of music publishing. You're not wrong, but I think this is a loss of focus.
    - dublinben 12y ago
      Hardly. Commercial content has been challenged and displaced by non-commercial, purely cultural content like never before. Young people would rather see a goofy image macro that their friend made than some lame sitcom by old white guys in Hollywood. For the first time ever, this non-commercial content lives side by side with commercial content on massively popular portal sites like Faceebook, reddit, and YouTube.

belorn 12y ago

> cut profits Every year, the average household spends proportional more money on entertainment than the year before. If you only look at one part the market, the conclusion will be equal incorrect. First it was radio, the cassette tape, VHS, P2P, streaming, ectra ...), and each time someone proclaimed this was going to doom the "industry". The music industry could argue that illegal music is pushing purchases to the movies, and the cinema could argue that illegal movies is pushing purchases to music services. Why should anyone believe either claim when the total profits from entertainment is going up?

rtpg 12y ago
just because more is spent by households doesn't mean profits have gone up. Maybe companies have to spend more to sell their products now (which might seem silly but I'm pretty sure advertising is one thing which _hasn't_ gotten cheaper in most cases).

betterunix 12y ago

"Illegal digital downloads disrupted everything, and cut profits substantially" Only because a decade beforehand the RIAA decided that instead of working on ways to monetize the Internet, they would work on ways to make computers less useful for music distribution. Basically the recording industry's shortsightedness and failure to embrace the greatest communications revolution since the printing press led to everything else you described. To put it another way, the RIAA could have pushed for Congress to set up a micropayments system for music downloading, before most people even knew about music downloading. Instead they lobbied for the DMCA and spent their money developing DRM schemes that failed before they were ever deployed. Their "bad karma" is a result of their response to the complete failure of those efforts: abuse of the legal system on a massive scale.