them0ment dug up a shocker from ArsTechnica. According to reporter Moses Avalon’s May 5th story, the RIAA’s hand-wringing over declining sales have been blatant misrepresentation of a changing marketplace.
To help understand things, let’s step back and take a quick tour of “the old way.” The RIAA’s member companies would print up metric tons of CDs by various artists and ship them out in huge containers to retailers like Best Buy, Borders, Walmart, etc. They often kept ten weeks worth of merch lying around in stores. It worked for a long time, but then, lots of inefficient business models work for a long time, too. One of the problems in this scenerio, though, is the ease with which a retailer can be “burned” by a release that looks hot but doesn’t move once it hits the shelf. They have crates and crates – 10 weeks worth of anticipated sales – but it sits, gathering dust and taking up valuable space that could be used by a real mover.
Over the past few years, retailers have been squeezed not just by Napsteresque downloading, but more efficient legitimate competitors like CDBaby, Amazon, and others. Taking a hint from efficient technology companies, many retailers have changed their gameplan. They’re ordering smaller quantities and a greater mix of music, cutting their “shelf time” for product down to two weeks, and responding faster to new trends.
This is a good thing for both retailers and music lovers, because it means less stale product cluttering up shelves, faster turnover, anda better chance of finding interesting new material when you wander out to Borders, instead of waiting for a 2-week special order. (Well, most people will just wander back home and hit Amazon if a CD isn’t in stock. But that’s exactly why retailers are trying to cut down the amount of “stale” product they carry.)
This approach is working great, from the looks of it. According to Soundscan, the company that tracks actual sales of music, sales are up almost 10% industry-wide. Even with Napster-like services l33ching music, the industry is ding better.
Where, then, does the RIAA get off saying things are bad? Simple – the numbers IT gives are the shipments being sent out to retailers. That’s what they consider “sales” – not the CDs that actually end up in the hands of consumers. Because the retailers are becoming more efficient, ordering smaller batches of merchandise and avoiding stale product, the RIAA sees orders dropping.
Quick! Time to lobby congress and outlaw P2P networks! Sue fans who download music! Film public service announcements! Try to legalize malicious hacking, if RIAA employees use it to target P2P network users! Change copyright laws!
The RIAA is facing a mini-crisis because they can no longer shove boatloads of product at retailers and trot off to the bank while said retailers try to move dead product. The fact that they have the ear of our gorvernment, via powerful lobbyists and huge donations to politicians on both sides of the partisan fence, is scary. The things the RIAA wants to make into law will fundamentally alter the intellectual and creative landscape of our culture – all in order to protect the profit margins of an inefficient middleman who’s feeling the squeez.