CD Sales Go Down Faster Than _______ in a ___________

Let's take a trip in the DeLorean all the way back to the summer of 2004. Big things were happening in the world: Olympic games were held in Athens, the U.S. had a presidential election coming up, and Ken Jennings (a personal hero) was kicking ass on Jeopardy! for over 70 episodes. Yet, for the movie industry, things were looking rather glum. Much ado was made about falling ticket sales in movie theaters, and industry execs scrambled to pinpoint the cause. There was a substantial amount of pontification on the part of analysts to find the reason for the slide, and one scapegoat quickly emerged more worthy than all the rest: peer-to-peer networks. Here was a direct cause for the effect, an all-but-proven reason for lag in the system.

Sounds reasonable enough... but, just out of curiosity, let's take a quick look at a few of the movies released that summer: There were the comedies, such as Without a Paddle, The Big Bounce, Envy, Eurotrip, Garfield: the Movie, Chasing Liberty, Around the World in 80 Days, White Chicks, The Girl Next Door, Mr. 3000, Connie and Carla, Welcome to Mooseport, and Jersey Girl; action films such as Torque, Catwoman, The Day After Tomorrow, Walking Tall, Flight of the Phoenix, The Perfect Score, The Chronicles of Riddick, and The Alamo; a host of sequels like Dirty Dancing: Havana Nights, Barbershop 2, Agent Cody Banks 2, Scooby Doo 2, The Whole Ten Yards, The Princess Diaries 2, Spiderman 2, Exorcist: the Beginning, Superbabies 2, Resident Evil: Apocalypse, Seed of Chucky, Ocean's Twelve, Bridget Jones: The Edge of Reason; and of course, Anacondas: Hunt for the Blood Orchid. One alternative theory to the reason for the film industry's falling profits, though, never seriously considered by execs themselves, was the... errmm... poor quality of the movies in question. Rather, the prevailing theory seemed to be that the number of tickets sold should always be proportionate to the number of films released in a given time period, regardless of quality or content.

Now let's step back into the DeLorean to three Nickelback Grammy nominations, a Lil Eazy-E album, and a massive payola scandal later -- it appears that not much has changed, only this time the music industry is the industry in question. CD sales have declined by 20%, compared to the same time last year, a loss that couldn't even be nullified by a 54% increase in digital music sales over the same time period. An overall look at music sales taking into account all formats, including formats such as ringtones, still shows a sharp 9% decrease. CD prices have dropped in many markets, likely a response to price drops led by companies such as Best Buy and Wal-Mart. Russ Crupnick of NPD Group, a firm who recently released a report stating that P2P downloads still outweigh the number of paid downloads in the overall market, was quick to attribute the sales drop to the factors shown in the group's study: "Unfortunately for the music labels, the volume of music files purchased legally is swamped by the sheer volume of files being traded illegally... Five billion files downloaded illegally clearly affect prospects for both CD sales and sales of digital song tracks online."

The legitimacy of such criticism is, of course, based on the assumption that everyone who downloads a track would have likely otherwise bought it in stores or online (and that no consumers both download and buy the album or that P2P actually increases the overall popularity of music consumption), but regardless, it'd be difficult to argue that downloads haven't affected CD sales, at least in some small way. They have, just as public libraries affect overall sales of books, because artistic content has been made more easily available to the public in a way that no one directly or illicitly profits from. Yet when I think back to the unforgettable trip we just took back to the year 2004, I can't help but compare the movies being pushed by the big studios at that time to the albums being pushed today by major studios.

Of all the music downloaders I know, not a single one of them is unwilling to pay market value for an album they really enjoy. But have consumers been given enough reason to do this? A major criticism of the music industry for decades has been their tendency to promote albums through one good single, which when listened to later, after being bought on a CD, turns out to be the only decent song on the album. I don't want to stereotype anyone's musical taste or accuse all major label albums of having one good song a piece, but I do believe the industry is having troubles finding consumers who are jumping at the opportunity to spend the equivalent of three work hours at minimum wage on an album that may or may not have more than one good song; it's not without two generations of prior conditioning.

Whatever the conclusions, questions will linger: Has the drop in sales affected the music? Is the weak first quarter releases a reason for the significant drop? Is the shift to digital music making the CD or full-length album a dying medium? Or a niche medium? Has the growing awareness of how little money the artists receive from CD sales played a role in the drop? Most importantly, why hasn't anyone commissioned my boy Ken Jennings to do a full report on this issue? I'm afraid only time will be able to answer these questions for us, especially that last one. In the meantime, you and I can eagerly await the next quarterly report, while the major labels sit around and merge or whatever it is that they do for entertainment these days.

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