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Music Industry Revenues Tank Right After Napster Is Silenced Print E-mail
Thursday, 15 November 2001
You tell me there is no correlation between the music sales and the gangland execution of the illegal file sharing phenomenon Napster? Reports in the Financial Times say Merrill Lynch is predicting that 2001 will be the worst in ever for the music industry with profits off 10 percent across the board. The losses are despite having a pretty strong Q1 and Q2 2001 says one LA-based music industry executive close to AudioRevolution.com. The majors are doing everything they can to protect their sales numbers including pumping up their ultra-profitable back catalog. Cases in point – brand new Madonna, Bob Marley and Pink Floyd Greatest Hits records on store shelves just in time for Christmas. Even more perplexing is the fact that there are records with smash hit potential out there from Brittany Spears, Michael Jackson, Lenny Kravitz and others.

Maybe putting copy protection that degrades the sound of the CD has scared off buyers? Perhaps the fact copy protected records don’t play in some computers has ticked off college consumers? Maybe computer savvy consumers wanted to download the song first from Napster before they bought it, much as they would hear it for free on the radio? Or could it be that if a consumer is going to buck up for damn near $20 for some pre-recorded music they want higher resolution and or surround sound mixes as found on DVD-Audio and SACD – two formats seemingly forgotten this Christmas.

If the music industry is singing the blues this Holiday season it is their own damn fault. They fight every new technology that comes along (remember DAT, DCC, CDR and MP3) while the movie studios are literally raking in the money with incredible home video success releasing their hit movies like The Mummy Returns, Star Wars: The Phantom Menace and Shrek. In 3 days, Shrek sold 7 million units (that’s 7 times platinum if it were a record) and pulled down $110,000,000 in revenue. Despite national tragedies and a global economic recession, consumers are willing to spend money on AV software. It just may not be on the CD anymore.

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