The music recording industry is in difficulty. For several years today, sales of new and well-liked music have got steadily decreased and show no sign of changing. The record companies are quick to blame the growing popularity of the Internet; music is being traded in a digital form online, often anonymously, with the use of file-sharing programs just like Morpheus, KaZaA, and Imesh, to name a few. The RIAA (Recording Industry Connection of America) succeeded in disbanding the pioneer Internet file-sharing plan, Napster, yet is facing confrontation with similar courses that are escaping American copyright laws. While there is usually an obvious interconnection between decreasing popular music sales and increasing file sharing, there is even more going on than the RIAA would like to admit. I will show that the recording companies are overpricing goods, and not sufficiently using the Internet while an opportunity to marketplace and sell many. I shall begin by talking about in increased detail the problem that the saving companies are facing, as well as the developing epidemic of online music trading. From there, I will demonstrate correlation between the two and describe the other factors impacting on record product sales, and how these kinds of trends could possibly be turned around to assist the market.
" The Record Industry is trouble, " says Jann S. Wenner in an editorial appearing in a recent issue of Going Stone Journal. " Recording sales are down almost 20% via two years back, and the record business is definitely facing the biggest retail slide since the Great Depression" (Wenner). People are obtaining less and less products released by recording companies. " Nobody doubts that the music organization is in difficulties. Last year, global sales of CDs were down simply by 5% by 2000, the first land since the formatting was launched" (NAPSTER Ur. I. P). The Nielsen SoundScan, accustomed to report last sales to consumers, exposed some of it is figures within a September 2002 issue of Billboard Publication. " Nielsen SoundScan reports that total music revenue compared with the year before were off by doze. 6%В…while project sales were off by 9. 8%. Total first-half units sold fell to 317. several million devices from 363. 4 mil; the number of cds sold slipped to 311. 1 mil units via 344. eight million В– an eight. 1% drop" (Garrity). Even the number of albums that turn into hits can be decreasing. " At mid-year 2001, thirty seven titles acquired sold more than 1 , 000, 000 units each; halfway through this year, only 21 titles had distributed that many, according to Nielsen SoundScan" (Garrity). Even product sales figures pertaining to singles are down. " Sales happen to be off by simply 63. 9%В…6. 7 million units were sold in the first six months of 2002 vs . 18. 6 , 000, 000 unites in the same period in 2001" (Garrity).
Not only are definitely the companies themselves facing hard times, but the retail stores that promote music are also suffering their particular losses. " Musicland Shops, the largest music retailer inside the U. H. continues to statement losses and declining salesВ…For the third one fourth, the Minnetonka, Minn. -based company information a new loss in $16. 1 million, compared with a damage last year of $144. 6th million" (Jeffrey). The company was even required to close several of its stores. " For quarter's end, Musicland operated 1476 storesВ…During the one fourth, the company shut the following: Seven Sam Goody/Musiclands, two Media plays, 1 On Cud, and on U. K. store" (Jeffrey). This challenge hits residence in Vermillion, South Dakota, where the community On Cue store, the sole place to acquire entertainment items like Compact disks and audiocassettes, was required to close as a result of insufficient income. Inhabitants of Vermillion have become forced to travelling anywhere from 35 to sixty miles aside to purchase music offline. Although this area obviously reflects a very small percentage of consumers, the lack of immediately available music products certainly will not ensure that the declining record sales.
The stocks and shares of music retailing companies are also slipping. " Publicly owned music-retail chains taking about hundreds of dollars million in share-holder benefit over the past number of years, as...