There is a growing trend for major music labels, and their industry counterparts, to point the finger of declining sales at peer-to-peer file swapping. Over the last few years, the Recording Industry Association of America has been very vocal about the damage they claim the technology is causing. Now the Australian Record Industry Association (ARIA) is jumping on the same bandwagon.

In their Australian Record Sales - 2004 Full Year Results, they point out that CD Albums declined by 4.75% in volume and 5.52% in value. They go on to say that the “CD singles market experienced a slight decline of 1.89% by volume, though the larger decline in value of 6.45%”. All up “wholesale recorded music sales (including albums, singles and DVDs) were down almost 4% by volume to 63.1 million units and the overall value fell by 6% to $607 million”. Which as an industry is something to be concerned about, especially when this is the second year in a row for a decline in sales of CD singles.

So what do they attribute to this decline. Bad management? Crap music? Lack of innovation? No. In fact they point to three main reasons for the decline. Firstly, competition from “digital music carriers” like the iPod, and non-music DVDs, and not only the dollars they consume, but retail rack space. Secondly, competition in general from the retail environment, where all forms of consumables are now competing for the buyers dollar. Finally, broadband. Yes, that good old subversive medium, where all things evil occur. Or as they put it, “which more easily enables the illegal downloading of music”. Admittedly, they do see this as a potential boon, suggesting that when the Australian online music market gets its act together they’ll see growth like the rest of the world, but it’s interesting to see them pick that as one of the three reasons for decline.

What they neglect to point out is the major decrease in choice they’ve provided to the Australian music consumer. Fortunately, we’ve got some very clued in researchers, just like Alex Malik. Malik is conducting research at the University of Technology, Sydney, toward his PHD, and being a former ARIA in house lawyer, happens to know the market well. His research, which uses ARIA’s own data, points out that the major labels have released 39% less albums and 42% less singles for the year when compared to 2003. No wonder sales have decreased.

Even more concerning is the reports suggestion that the majors are investing less in developing new artists as well as releasing and marketing less Aussie music. Thank God for indie music scene though, who doubled their album releases last year.

The point is, that while pointing the finger at broadband and suggesting that the decline in sales is due in part to illegal downloading of music, they should consider that it’s the lack of choice that is the root of the problem. I’d say that a 6% decline is a fabulous result for a 42% reduction in choice. It seems almost unfair, because you’d certainly expect a much greater decline in sales. It also seems, with numbers like that, that major labels have made a concerted effort to contract the market.

In fact, with numbers like that, thank God we’ve got digital music carriers, broadband, and the indie scene, because otherwise music may already be dead.

This entry was posted on Monday, March 21st, 2005 at 8:24 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.