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RIAA Petitions Judge For Lower Royalties As Agency Struggles To Adapt To New Music Markets Print E-mail
Friday, 15 December 2006
Reports from the Internet including gaming website, IGN.com, report that the music industry group, RIAA, is petitioning judges to lower the royalties paid on music. This comes as the music industry has been suffering from eroding sales that has reduced their domestic yearly sales from north of 30 billion dollars per year in the early 1990’s to reportedly around 11 billion dollars in 2005. Concurrently, other sales reports show downloads sold through legitimate vendors such as Apple’s iTunes Music Store represent in the ballpark of 3 billion dollars in sales. The RIAA clearly represents the interests of the four major labels and is working to get them an increasing share of a shrinking market. While the RIAA has taken a litigious strategy for years (fighting Napster, suing consumers etc…) what they should be doing is embracing new technologies that help protect the idea of selling the album. When the music business was in its heyday (from the launch of the Compact Disc to the mid-1990’s) the vast majority of their sales came from back catalog sales, records that were produced and paid for long ago. Why isn’t the RIAA talking about ways record labels have adopted releasing music in 24-bit, 192 kHz stereo, 7.1 surround sound and paired with HD video on copy protected disc formats like HD DVD and Blu-ray?

As much as the RIAA likes to cry fowl about downloads, it was the DVD and video gaming that killed the business model of the record business. For decades their “sue it or break it” philosophy actually resulted in more and more sales, mostly helped by tons of free advertising from a once powerful terrestrial radio system and a once highly influential music video network like MTV. Today technology as a whole is more powerful than music on its own and when consumers are receiving at an audio-video experience for $22 on DVD or even $50 for a video game with HD video and impressive game play – people vote with their wallets and in most cases it isn’t for the CD. Yes, you can still steal music from the Internet but you can’t steal the top 1,000 rock records of all time re-released in high-resolution surround sound. But you can’t buy them either because the major labels, the RIAA and all of their know-it-all executives are too shortsighted to see that they need to be marketing music in more than one venue and that the Compact Disc is a dead format when selling it at $18.99. Just ask Tower Records how well that model worked.

The music industry needs to hit rock bottom in order to change but they aren’t there yet. They need to realize that today’s kids are different than in past generations such as Baby Boomers and Generation X. Today, kids are raised by their TiVo and are amped up on attention deficit drugs to the point where they can barely focus for more than two minutes on any one task. This is a generation that thinks text messaging is more fun than burning a Bob Marley sized spliff and chilling to Dark Side of the Moon, yet it is the dube-smoking Baby Boomers that sit atop their ivory tower making foolish decisions about how to sell, market and promote music.

Roll the tape a few more years into the future and see how content providers like satellite radio, computer companies and video game developers will be exploiting new ways to get a new generation their music and trust me it won’t be on an $18.99 CD. Fighting for lower royalties is the last thing the record companies need right now. The easiest solution comes from the creation of better, more well crafted music. However, that isn’t what we hear in this lowest common denominator music market littered with hip-hop garbage and bands that are scared to take a guitar solo. Returning to signing bands that can really play and paying songwriters for the best of their work is only a start to the solution. The final answer is then taking a higher quality musical product and distributing it in many creative and profitable channels.

Sources: IGN.com, Apple.com

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