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AP Blows Story on Digital Music

Posted By Barry Ritholtz On January 24, 2006 @ 8:45 am In Music | Comments Disabled

This article [1] on digital music has some of the most utterly bizarre quotes I have ever read:

"Digital music finally took off in 2005, according to data published ahead of this week’s Midem music trade show in Cannes, while lawsuits kept illegal file-sharing in check."

First off, digital music took off seven years ago in 1999, when Napster ignited the P2P [2] craze of swapping mp3s. Last time I checked, MP3s were digital music.

Further, file sharing numbers [3] have actually [4] increased [5], despite the harrassing litigation. [6] 

Two factual errors is a rather inauspicious way to start a column, but such is life in an era when aping press releases is what passes for reporting.

Let’s continue:

"But for record companies, the growth of legitimate downloads and the partial victory against piracy have come at a price. Many in the industry are concerned that the scramble to license out catalog for digital sales has done lasting damage to profitability.

"Music has become a disposable item," said Nicholas Firth, chairman and CEO of BMG Music Publishing, a division of Bertelsmann AG. "For many people it’s a traffic builder."

Partial victory against piracy? WTF is this guy smoking? 

Legal downloading is a drop in the bucket compared to what is exchanged on P2P. Last year, 332 million songs were purchased [7] via iTunes Music Store and other legit downloading sites. According to Music Industry News Network [3], at any given instant, there are 6.86 million P2P file sharers online in the US, and 9.47 million online globally. Given that most P2P users grab a fair amount of tracks per session, there are literally billions — Billions! — of swaps per month.

Annual legal downloading of music is equal to about a week’s worth of P2P.

Digital music sales tripled to $1.1 billion (euro900 million) last year, according to industry trade body IFPI, but failed to offset an estimated 6 percent decline in CD sales.

CD sales actually dropped 8% [8] (or 7% if you do not include singles [9]) but what the hell is an actual fact amongst friends and hacks? 

"Once hailed as the industry’s savior, iTunes is increasingly seen as part of the problem.

"I’m hearing that the artists aren’t happy, the publishers aren’t happy. Someone other than Apple needs to be happy for this industry to grow," said Amit Shafrir, president of AOL’s premium services arm."

WTF?  Quoting AOL on music? PUH-leeze — like AOL has any authority on anything these days; If you want info on how to put together the world’s worst merger, you go to AOL for the stright dope. But for anything else tech/content/digital related, AOL is ridiculously irrelevant, and has jack to contribute. I guess no one on the B list was available, so they went with the C — if not D – list.

And ITMS is part of the problem? This is unmitigated Recording Industry BS, and its astounding that any journo in the world would repeat it without speaking to an actual artist. (Pathetic).

I rarely come out and say this, but, this is amongst the most embarrassing reporting I have come across on the music industry.  What a steaming pile of enzyme-free donkey fazoo  . . .



Download Growth Concerns Music Industry [10]
Record Companies Struggle to Defend Value As Growth of Legitimate Downloads Comes at High Price
Laurence Frost
AP, Monday January 23, 6:21 pm

Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2006/01/ap-blows-story-on-digital-music/

URLs in this post:

[1] article: http://biz.yahoo.com/ap/060123/france_music_downloads.html?.v=1&printer=1

[2] Napster ignited the P2P: http://en.wikipedia.org/wiki/Napster

[3] file sharing numbers: http://www.mi2n.com/press.php3?press_nb=85986

[4] actually: http://arstechnica.com/news.ars/post/20060120-6021.html

[5] increased: http://bigpicture.typepad.com/comments/2004/01/report_illegal_.html

[6] litigation.: http://www.cdfreaks.com/news/12854

[7] 332 million songs were purchased: http://bigpicture.typepad.com/comments/2005/12/down_7_for_05.html

[8] CD sales actually dropped 8%: http://www.mtv.com/news/articles/1519469/20051229/carey_mariah.jhtml?headlines=true

[9] 7% if you do not include singles: http://news.bbc.co.uk/2/hi/entertainment/4566186.stm

[10] Download Growth Concerns Music Industry: http://biz.yahoo.com/ap/060123/france_music_downloads.html?.v=1

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