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RIAA Admits P2P Not Solely to Blame for Decreased Music Sales

RIAA Admits P2P Not Solely to Blame for Decreased Music Sales

Says that “comparing sales numbers only reveals part of the story,” and notes that in 2010 the music market “saw enormous growth” in online streaming music services like Vevo and Pandora where music fans don’t make any music purchases at all.

The music industry has long made it seem that P2P is solely to blame for the overall decline in legal music purchases, but by its own recent admission this isn’t true, there are many more reasons why revenues are still in decline.

According to Nielsen SoundScan, digital music sales are still nowhere close to compensating for the decline in physical music purchases. Last year digital album sales rose 13% to 86 million while physical CD sales declined by 20% to 240 million sales. Overall album sales were down 13%.

Digital music now accounts for 46% of all music purchases; up from 40% in 2009 and 32% in 2008. It’s this fact that should be most troubling to the music industry because digital music has lower price points and allows music fans to cherry pick the songs they want on services like Apple’s iTunes. These two things squeeze the amount of money record labels can make on both ends – the number of songs purchased and the amount paid per each.

Thanks to decreased distribution and nonexistent packaging costs the price needed to charge consumers for music is decreasing, thus lowering its overall revenue by default.

There are also other forces at work that have caused a decline in music purchases and one of them, by the RIAA’s own admission, are free music streaming services.

“As we and other industry observers have noted, comparing sales numbers only reveals part of the story,” it says in a recent blog post by Joshua P. Friedlander, the RIAA’s Vice President of Research and Strategic Analysis. “Perhaps more telling about the direction in which the music market is headed, 2010 saw enormous growth in online streaming music and access models. Although the growth of services like Vevo and Pandora have been well documented, the growth of revenues from streaming services is becoming more significant.”

There you have it. Music sales only reveal “part of the story.” When it regularly lobbies members of Congress to pass legislation like the controversial Combating Online Infringement and Counterfeits Act (COICA) you can bet it doesn’t have an asterisk next to the figures for declining album sales that says “only reveals part of the story.”

Copyright holders always need to make file-sharing seem like much more of a problem that it really is, and admitting that P2P is only partially to blame for its woes wouldn’t help pass “urgent” legislation like giving the justice dept. a fastrack process for seizing domain names before owners have a chance to contest the charges in court.

A UK survey has even shown that streaming music has already caused a majority of young adults (54%) to quit illegally downloading music altogether.

At some point the music industry has to publicly admit that its business model has changed, and that its woes aren’t solely to blame on illegal file-sharing. Music fans have an increasing variety of listening options these days, and many of them will mean much less revenue for the music industry. Making a playlist on YouTube, for example, or cranking up Pandora, on a daily basis by millions if not billions of people worldwide is a much greater cause for declining music industry revenues than is a guy who downloaded an album that he may not have even bought otherwise.

Stay tuned.

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Jared Moya
I've been interested in P2P since the early, high-flying days of Napster and KaZaA. I believe that analog copyright laws are ill-suited to the digital age, and that art and culture shouldn't be subject to the whims of international entertainment industry conglomerates. Twitter | Google Plus
shaw
shaw

Back in the 80s the RIAA was complaining about cassette tapes and how they were going to harm record sales. The only thing that made record sales increase was the invention of the CD. Everyone had to buy all of his albums again in CD form. The only problem now, there is nothing new that can come out and replace the CD

S242
S242

@Jared,Can I just say that your article takes those RIAA statements and paces them out of context - completely. Those statements were done to compare the different growth rates between digital sales and streaming plattforms, and they only account for 2010 but they nowhere say anything about piracy in general.Also I dont know any statement where the music industry ever claims that piracy was their only single problem. You just make it sound that way.

Bas
Bas

Source? Would love a link to wherever you got these RIAA statements.

Dave
Dave

Back in the day I was sad to see Vinyl replaced by CDs. The Industry signed their own death warrant by digitizing music in the first place. Sure, you can record off LPs and tapes but unless you have the master, they will always be second generation recordings. The actual data is in everybody's hands now. They can pass laws until their face turns blue. If they want to stop piracy, they should go back to Vinyl records, Analog Tapes, 8 Tracks or maybe even the Edison machine. Go see your favorite band in concert. Even if you make a recording of the show, you can't pirate the experience :-)

MAFIAA is evil
MAFIAA is evil

Pshhh, these mobsters won't admit anything. And pandora and vevo (which sucks btw) only came about because of piracy. Without people just taking music free via p2p, MAFIAA would NEVER have licensed Internet streaming. So yes, piracy IS to blame for destroying MAFIAA and YOUR WELCOME. lolz, big content convinced u sharing was wrong so easily. U know the same people who own music own tv and video right? You won't hear the pirates side from the Lamestream media or the 'government' cuz they're all owned by the same people, dbags like Rupert Murdock.The fact is that riaa/mpaa groups like time Warner, Disney, viacom, newscorp, Sony, etc OWN 85% of music and probably an equally appalling amount of all media, in America. That's 85% of OUR culture being held hostage, and ransomed back to us, by just a few corporations. Corporations that collude and conspire daily to maintain this monopoly. Example: internet radio MUST pay royalties for any song, even an indie song thats free. Th law was written by riaa lobbyists, and ALL the money goes to the riaa. Even for free music, even for non-riaa bands. Other than being greedy and scummy, one of the broader implications, is that there can NEVER be free internet radio legaly. Riaa aka mafiaa has hijacked ALL internet radio through bribes and lobbyists. I'd call it a conspiracy, but really conspiracies, lies and bribes are just another Tuesday for these people.So my point is this: yes sharing is killing the big labels, the bloated middlemen, stuffing their faces at the trough of OUR culture, becoming so engorged there remains no room for anyone else to eat. Your bloody welcome ;)

me0w
me0w

not to mention grooveshark, and the decline in quality of the product.......

disinter
disinter

God how odd it is to see the two words "RIAA Admits" together.

Jared Moya
Jared Moya

? U obviously havent been listening over the years, and wasn't taken out of context.Streaming music is large part of the reason why people NO LONGER BUY MUSIC.Sites like pandora and last.fm are increasingly popular since they're FREE, EASY to USE, and CONVENIENT. So when it tries to blame P2P for decreased music sales in the CONTEXT of additional law enforcement measures by the govt and ISPs it's important to point out, in the RIAA's own words, that this is patently false,

Chris
Chris

@MAFIAA is evil"internet radio MUST pay royalties for any song, even an indie song thats free. Th law was written by riaa lobbyists, and ALL the money goes to the riaa. Even for free music, even for non-riaa bands."This is completely incorrect. They have to pay ASCAP and BMI which are NON PROFITS. About 90% of this money goes directly to the songwriters and because these orgs are performance rights societies, it is free for artists to sign up. I have absolutely no idea where you heard that info, but it is completely false. There are lots of reasons to hate the RIAA. There is no need to make up new ones.



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