The Decline of the Music Industry

Aug 27, 2002 · 4 minute read

Today ends in a ‘y’, so it must be time for the music industry to release another report showing a downturn in music sales, and to start shouting: “See!!! You’re killing music! Give us the right to hack into your computer!”. They were noticeably quieter last week, when a different report said that music downloading probably hasn’t hurt music sales in the way the RIAA claim. Still, music sales are down, and have been declining for several years. If it’s not the fault of file sharing, then what is to blame?

• The recession - There’s an economic downturn happening all around us. Americans are not spending as much as they used to, thus they’re not buying as many luxury items as before.


• The End of the Baby Boomer Conversion - From the record labels’ point of view, the CD market was a fantastic idea, as it meant that everybody had to go out and re-buy all their albums, replacing the original vinyl versions. This probably helped push CD sales for over a decade, as people slowly worked through their collections. But what happens when practically everybody has done this? The sell-through of back catalogue will go through the floor. This happened in 1996. Strangely, the record companies don’t mention this anymore. The downturn started before Napster.


• The Music Industry is rotten - due to sweeping changes in regulation, one company owns most of America’s radio stations. The majority of independent labels are nothing of the sort; they’re vanity labels for corporations who want to present a ‘Gen-X’ front. The major labels are resorting to vapid talent shows to make a few quick hits, a big-selling album, and a fast slide into obscurity. So far, they seem to be doing okay with this strategy, but each time they do it again (as in the difference between PopStars and Pop Idol sales), their returns get smaller and smaller.


• Finally, CDs are too expensive. The RIAA can whine about how CDs are cheaper than they’ve ever been in real terms, and that it’s naive to say that a CD only costs 10c to produce. True enough, but consider this: as far as I know, the most expensive pop album ever produced is Michael Jackson’s Invincible, at a cost of $30 million dollars. The list price is $18.98. If we look at a film with a similar budget, say Austin Powers 2, and look at the DVD of the film, we can see that, for a dollar more, we get commentaries, a whole film, deleted scenes, interviews, music videos, and more besides. On the CD, we have a maximum of 74 minutes of audio. You can see why the DVD market is skyrocketing, whilst CD sales plummet.

What can the record companies do? Well, they could reduce the price of CDs, try and re-introduce some excitement back into the industry by allowing small record labels to flourish (and not buy them out when they look profitable), and making the CD package more enticing, e.g. by including DVD discs of the album/single’s videos (they don’t cost much to press, and they’re already paying for the production of the videos already, so why not make use of them?) Will they do this? No. Instead, they want to pass laws that will allow them access to anybody’s computer that they suspect is being used for file-sharing, and take measures to stop them. They want to lock up their customers, preventing them from doing things with their music that they’ve done for years. They’d love to force a new format upon us, to get the Boomer Effect back; but their efforts so far have failed miserably, as people are still feeling the pain from the vinyl-to-CD transfer. It’s not their fault. Oh no. It’s our fault. We should be grateful we can pay $20 for the new teen-pop sensation, coming straight from the baiting-pit of the smash hit TV show on Fox. We should be grateful that the watchful eyes of the RIAA are upon us, waiting to strike if we commit the sin of copying a music track to our computer, and we should be grateful that the RIAA, and its friend the MPAA, will make the computer safe for us nice little consumers.