With all of the RIAA whining about piracy it is interesting to look at the sales figures for DVDs and CDs. Nielson SoundScan notes 681 million albums were sold in 2002, down from 785 million in 2000. The RIAA reports the average price of a CD is currently $14.21 (down a bit from 2000 due to price fixing on the part of the major record companies). Using that price we see a loss of just under $1.5 Billion.
During the same period DVD sales have risen from a bit under $2 Billion a year to $10.8 Billion. Many studies suggest people don't buy music separately from video - it tends to come from a total "budget" the consumer is willing to spend on entertainment.
So DVDs have gone up by $9B - somehow the record companies have managed to only lose $1.5 Billion. They shouldn't be complaining.
But you protest - video also includes VHS and that has been shrinking. True. In fact last year marked the point where DVDs began to outsell VHS. So we look at the overall figure. In 2000 about $13.9 Billion was spent on VHS+DVD ... this rose to $16.8 Billion for 2002. So we see the video market growing by $2.9 Billion .. nearly twice the loss the RIAA is reporting.
You still complain ... it turns out that box office receipts are up about $0.7 Billion during the same period. And the economy sputtered. And one might add the growth in console games, which was a bit over $1 Billion - you get the idea.
If the conjecture that entertainment dollars are somewhat bounded in a flat or receding economy, the RIAA has real cause for worry this year. DVD player sales were incredibly strong with the introduction of $100 models during the Christmas season. DVD player penetration is about a third that of VHS players. Combine the cheap player price with the fact that many movies are only being released in DVD format and DVDs tend to be priced at 1.5 times that of a CD with, for many people, greater value than most CDs and you might project CD sales dropping even more.
There is an additional piece of evidence that suggests the quality releases has dropped dramatically over the past two or three years. I have not seen direct measurements of this, but it is strongly suggested in interviews that some of us have conducted. It is hard to believe that people would be increasing their music consumption in light of this even without competition from other purchased media.
The recording industry is more interested in protected a failed business model and mismanagement than addressing the issues of how to capitalize on new media types and new delivery techniques. Their stock holders should be furious with them.
I would call these guys weasels, but I like weasels. When I was first directly exposed to the greed of these guys I decided to take the following steps in protest.
Using these techniques we have much more interesting music in the house than we would ever get by going through the majors. We are diverting a bit over $1000 a year from the majors and channeling it to areas where it impacts music more directly. Last year we only bought one CD from a major. That is one too many and perhaps this year it will be down to zero.
6:27:32 AM 
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