Every six months or so the Recording Industry Association of America releases its latest figures about the state of the music business, and every time the numbers are misleading in exactly the same way. The RIAA’s October 3 press release declares that music shipments of “all physical formats” are down 5.8 percent for the first half of 2005–evidently compared to the first half of 2004, although that’s not clear. (CDs have dipped 6.5 percent; it’s a reasonable guess that DVDs are up.) Why the drop? “Illegal online downloading” and “rampant unauthorized CD burning,” the RIAA claims–the usual suspects.
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But take a close look at what those numbers represent. They’re for shipments–the number of discs that labels send to stores–not sales. There’s a big difference, though the RIAA avoids making a distinction. Unsold CDs are returnable, and if shipment numbers are down that doesn’t necessarily mean there’s a downturn in sales. It might just mean that distribution is getting more efficient, or that fewer stores are selling CDs. The Almighty Institute of Music Retail, a market-research firm, claims that more than a thousand American music stores have closed since 2003, supplanted only in part by the likes of Wal-Mart, Best Buy, and Target.
Still, the big labels wouldn’t mind getting their mitts on the other third. Bertelsmann AG–the German company that owns half of the major label Sony BMG and poured money into Napster a few years back–is about to launch another “peer-to-peer” service, modeled not on Napster but on BitTorrent. Sort of.
