hip hop music

April 4, 2005

Questioning RIAA Math

Mark Cuban wonders if the music industry's math is fuzzy:

Let's Test the RIAA Logic

At a CEA event I attended a couple weeks ago, I listened to a panel where Mitch Bainwol, the head of the RIAA, basically put out the argument that it was obvious that illegal downloads were hurting music sales. It was obvious because the advent of file sharing coincided with a decrease in music sales. Therefore A lead to B.

...Since Mitch thought it was important to use RIAA Logic to show how obvious the link was, I decided to test Mitch’s logic by applying it to other digital content. So I’m putting together a list of digital media content types that are sold, and looking and asking if they have seen an increase or otherwise in sales since the introduction of Napster. I was hoping blog readers could contribute their thoughts to the list as well. Here is my list:

DVDs - Huge Increase in Sale
Digital Photographs - Huge Increase in Sales (see Corbis and other outlets)
Video Games - Huge Increase in sales
Software - Not huge increase percentage wise, but increases in actual dollars… I couldn’t find a specific reference. Anyone have one?
Ringtones - Huge increases in Sales

So, using Mitch Bainwol/RIAA logic. If 5 digital based products sold since filesharing came on the scene are showing flat at worst, up huge at best sales, doesn’t it hold true that filesharing can’t hurt and must BENEFIT digital product sales?

...The RIAA claims that sales of the top 100 CDs sold 195mm units in 1999, materially above the 154mm units sold in 2004. Which leads to a question. Are sales down due to filesharing, or have RIAA members just lost marketshare?

I contend RIAA sales are down because they lost marketshare. There are more CDs being self published or released by non RIAA members than ever before. Sales from websites, concerts and car trunks are taking away sales from traditional labels. Access and awareness of that music has exploded through webradio, websites, p2p, satellite radio and tours ...What I don’t know is how much these alternate music sources are selling.

When the RIAA refers to the “record industry”, they are always misrepresenting themselves. In this era of massive self-publishing, they have no idea what sales are for the entire record industry. Only what soundscan or their members report to them. Both of which under report the incalcuable number of self publishing artists.

Which leads me to finally agree with Mitch Bainwol. RIAA logic says that if every other digital content products has seen increases in sales since the filesharing era began, than music should see an increase too. I think the RIAA logic holds. I think total music sales are up significantly since 1999. I’m just looking for the proof. Anyone able to help?

Industry types, what sayest thou? Is it wishful thinking to imagine that self-publshing etc. can account for such a steep drop in the total numbers?

Posted by jsmooth995 at April 4, 2005 5:09 PM

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