Okay, so here we are in the spring of 2007. Napster had it's heyday 8 years ago. (Sorry to those of you who haven't accepted your impending death....you are getting old!). The RIAA has been suing soccer mom's and grandpas for over 4 years. P2P networks have fought and lost in court to the RIAA. There is no new cultural phenomenon sucking people into P2P and Torrent sites in a mad dash to fill up a 60GB Ipod. (That happened a few years ago.)
In other words, I think it's safe to say that illegal downloading has pretty much stabilized.
So if illegal music downloading is about where it has always been, that means that RIAA sales should stay about the same. If there were 5 kabillion songs downloaded last year and the RIAA still made 100 jillion dollars, it's safe to say that industry profits should stay about the same if piracy, is indeed, stabilized and all other factors are about same.
Well, it appears that something weird is going on. Even though there is no sign of any dramatic increase in illegal music downloading, it appears the RIAA is still losing sales....lots of sales. How can this be? First quarter albums sales are down 16.6% for the first quarter of 2007 when compared to the first quarter of 2006. Even if we account for downloading (assuming that a cd is worth $10 and downloading a song costs $1), the music industry still brought in 10.3% less than they did last year.
The way I see it, maybe illegal music downloading hasn't had as big of effect as the RIAA once thought. I don't appear to be alone in this one. According to Yahoo News, http://news.yahoo.com/s/nm/20070409/media_nm/sales_dc,
Industry executives attribute the decline to a weak release schedule, the consumer's loss of confidence in the CD and a reduction in store space for the format.
Of course, “weak release schedule” is a nice way of saying “The music sucks!”. For the for the first time EVER (that I'm aware of), the music industry admits that may be they are releasing crappy music. So will this means that the industry will start taking more chances? I doubt it. It's crazy to me that an industry which has never been able to predict the albums that are going to define entire generations and yet, the modern trend is to sign less music.
No one predicted that Appetite For Destruction by Guns N Roses, Jagged Little Pill by Alanis Morissette or probably any other album that sold a zillion units would be as successful as they were. Music success is something that no one can predict with any certainty.
So maybe if the labels see that the current model of cranking out very mediocre and very “safe” music isn't working, they'll do something about it. I'm not claiming to have all the answers, but it's clear that the labels don't have all the answers either.
Brandon