RIAA Loss Report Contradicts Nielsen Sales Record

DerekAtLC writes "In a not-so-surprising twist of the tables, RIAA reporting of 'losses' is a little bit off. An interesting blurb at Ars Technica referencing a Kensei News article points out that Nielsen's Soundscan (Which tracks retail point-of-sale numbers for the music industry) shows a 10% increase in sales from Q1 2003 to Q1 2004. The RIAA has recently reported drops in revenue from last year, citing online piracy as the main problem. The crux of the issue? The RIAA hasn't been talking about sales or revenue in terms of sales to consumers or money generated via those sales. The RIAA talks about losses in terms of number of units shipped to retail outlets. The article points out plenty of problems with this (and reasons why we are seeing the trend), but it is fairly obvious that the RIAA is not reporting the most 'useful' numbers to the public."

Out of business stores dont keep inventory.

Another interesting thing has happened over the last few years. The growth of mega-chains such as Best Buy plus the .com's joining into the marketplace have knocked mom and pop record stores out of existance.

Less stores selling music means not only are stores keeping smaller inventories, but some store inventories fell to zero as they left the business. There's just plain less "unsold" disks sitting in the system.

Re:Out of business stores dont keep inventory.

Less stores selling music means not only are stores keeping smaller inventories, but some store inventories fell to zero as they left the business. There's just plain less "unsold" disks sitting in the system.

This seems like a highly debateable point as to causes of lower inventory levels. Traditionally, inventory levels have been an indirect measure of confidence in the economy. However, utilization of JIT methods aided by technology enables businesses to run at lower levels than previously thought acceptable. In fact, there really isn't any contradiction to the principles of economic order quantity because both ordering costs and turn around times are much lower. This is truly a new paradign.

Re:Out of business stores dont keep inventory.

Isn't this the opposite of capitalism?

For years, I had to go to run down stores with poor customer service and no inventory. Now, I can order online.

Why would we want to go backwards? Aren't we supposed to evolve? If you want your mom and pop store to succeed, shouldn't you be searching for a niche/market in which you excel? Do you think the world really owes your mom and pop store a favor?

I don't think so. I hate *most* mom and pop stores. Too many salesmen, too many commissions. Too little inventory, too poor customer service. Too high prices, too many just grunge music fans.

When I buy online, I hear reviews from people that listen to MY music. Not yours, I'm not limited to some little twat that only listens to such and such music.

Note to moderators - This post is objective.

Re:Out of business stores dont keep inventory.

Too many salesmen, too many commissions. Too little inventory, too poor customer service. Too high prices, too many just grunge music fans.

Uh, isn't that most huge chains? And what customer service are you referring to from any online store? Customer service to them is tracking your order. Let's take music stores for example.

Killer mom-and-pop stores still exist ESPECIALLY in record sales; in big cities (like Chicago) where the music scene is all about a well stocked record store, it's MUCH preferred over a chain. You walk into the store, hum a few lines, and it can be pretty damn impressive when the guy behind the counter a) knows who you are and b) can name the tune immediately. Not to mention the fact that they know what you like and drop you tidbits about what's coming out, and if you like certain bands, that you'll like certain OTHER bands, on top of which, special ordering is sooo painless most of the time. They also more often than not have a pulse on what's going on locally. And where do you get this limited selection bs?? I find MORE stuff at my local record store (and not even the obscure and/or local stuff) down the street, along with a whole slew of imports. Half the time I can't find the exact stuff I want online, like a very specific concerto recording (almost always easily found by my fave classical music place) or that Jawbreaker import that has been out of print forever.

Now don't get me wrong; I also love places like amazon when I know exactly what I want... but no internet store is going to take the place of stopping in at Reckless and chatting (or arguing!) with the music geeks on both sides of the counter about the newest album releases, etc etc.

More Mega-Store Efficiencies and Other Trends

> Another interesting thing has happened over the last few years. The growth of mega-chains such as Best Buy plus the .com's joining into the marketplace have knocked mom and pop record stores out of existance.

Excellent point. But it goes further than you suggest.

It is much easier for a mega-store to predict its sales, and manage its inventory efficiently, than it is for a small store.

For example, a small store might receive shipments once a week, or even once a month. For a given CD, that store might expect to sell just two copies before the next shipment, but a week or a month is a long time to be sold out of something, so that store will want to stock three, or more likely four copies of that CD. That's 50% excess inventory on average. Plus, there is nothing the small store can do with that excess except to return it with the next delivery truck.

But a mega-store will receive shipments every day. Plus, the mega-store might expect to sell 5 copies per day of that same CD. So let's say the mega-store keeps 10 copies of that CD on the shelf, with re-orders every day, and ends up returning the excess 5 copies at the end of a month. But that's 5 copies returned on a month's sales of 150 copies, which, in the long run, only represents an excess inventory of 3%.

And let's not forget the mega-stores' other advantages for efficient inventory management, including computerized check-outs, and the ability to move inventory around from one store to another.

So it shouldn't surprise us if excess CD shipments have been drastically reduced.

I can see another way in which Internet Radio, and music downloads would lead to more efficient sales. Today's buyer will go the the record store with better knowledge of what he/she likes and wants. Thus, that buyer will be less likely to pick up the mass-marketed Britney Spears CD, and more likely to pick up some lesser known band. It's not worth it to the record store to stock extra boxes of a small band's CD, the way they would with a Britney Spears CD. Plus, it's less likely for there to be a sudden rush on that small band. Thus, the trend is away from the mass-marketed items, where it's worth it to be wasteful (and necessary, to meet the peaks), and toward more highly focussed items, which sell a few at a time. And let's not forget the increase in the almost-100%-efficient special order sales.

As to the drop in international sales, I think that is more likely to be a shift away from the heavily-advertised American groups, and toward the less-advertised local groups in each country. Once again, Internet Radio and downloads would allow listeners in each country to discover those other groups, rather than simply being led by U.S. advertising. I assume that many, if not most of those smaller groups' sales in other countries are _not_ measured by the RIAA.

Re:More Mega-Store Efficiencies and Other Trends

As to the drop in international sales, I think that is more likely to be a shift away from the heavily-advertised American groups, and toward the less-advertised local groups in each country. Once again, Internet Radio and downloads would allow listeners in each country to discover those other groups, rather than simply being led by U.S. advertising. I assume that many, if not most of those smaller groups' sales in other countries are _not_ measured by the RIAA.

I don't know if this is a trend everywhere, but it seems to be true for Norway. First quarter this year, the sale of Norwegian CDs* was up by 46% volume (54% value) compared to the same period last year. 21% per cent of the CDs sold were Norwegian, up from 14% last year.

* Not including singles and DVDs, which probably would have pushed the numbers even higher.

Ref: Sterk økning i salg av norsk musikk [www.dn.no] (in Norwegian, I'm afraid ...:)

It's time to change sampling techniques?

I think the problem that is affecting groups like the RIAA, MPAA, the television networks, and so on is the fact that their techniques for measuring things like sales and viewership are being rapidly obseleted by changes in communications technology.

If you're read Alvin Toffler's book The Third Wave, Toffer some 25 years ago said that as more communications choices for consumers become available, old means to measuring "eyeballs" won't work anymore. I mean look at what has happened since The Third Wave was published in 1979:

1. Consumers now possess the technology to time shift TV programming by videocassette recorders and increasing digital Personal Video Recorders, which is making the idea of prime time meaningless.

2. The choice of TV programming has literally increased exponentially. Back in 1979, most Americans could only watch at most 5-7 channels of TV programming on over-air broadcasts; today, cable TV has expanded the available channels to over 70 and small-dish satellite TV has expanded the available channels to over 200!

3. The rise of pre-recorded videocassettes and now DVD's have drastically altered the landscape of both movies and TV programming. Indeed, many movies are only breaking even with home video sales (or doubling their profit with home video sales!) and there's now the new trend of complete TV seasons available on DVD! I'm sure HBO has enjoyed healthy sales of full seasons of The Sopranos, Sex and the City, and Six Feet Under on DVD sets.

4. The rise of the public Internet has also started to affect TV viewership, as several recent surveys have shown.

5. Current methods of measuring TV viewership don't take into account the increasing trend of large scale public viewing of TV programs at public gathering places and/or having a large group of friends watching the program at someone's residence. For example, the final episode of Friends probably got underreported by Neilsen tracking because a large portion of viewers probably saw it in a group setting either in a public place or at a private residence with a large living room.

6. Tracking sales of music will have to be revamped, especially in light of the way Wal-Mart handles sales inventories, the sheer retail power of Best Buy, the heavy use of online sales at Amazon and Barnes & Noble web sites, and individual song downloads at various legal sites such as Apple's iTunes web site.

I think if the various media companies actually bother to change their way of monitoring sales/viewership they could actually get a far more accurate measurement, something that could eliminate underreporting of actual sales/viewership.

No surprise there

So the RIAA won't stop at bending the facts a little -- okay, a lot -- on their way to ripping fair use out of America. Nothing we didn't know.

What will be interesting will be to see how much play this gets in the mainstream media. Probably no more than any of the other facts that aren't convenient for the "hackers steal $billions on teh intarweb" headlines they like to run. :-|

Dont forget

They also tend to count every single pirated copy as a loss. Even though, if forced to buy, most of it would not be purchased.

In related news...

The US census is now counting every possible sperm-egg combination as a "potential" citizen.

Re:In related news...

In that case, my left hand is guilty of mass murder...

Re:In related news...

... not to mention mass turbation.

Re:In related news...

Well, if we learned anything from Monty Python, it's that: There are Jews in the world. There are Buddhists. There are Hindus and Mormons, and then There are those that follow Mohammed, but I've never been one of them. I'm a Roman Catholic, And have been since before I was born, And the one thing they say about Catholics is: They'll take you as soon as you're warm. You don't have to be a six-footer. You don't have to have a great brain. You don't have to have any clothes on. You're A Catholic the moment Dad came, Because... ...Every sperm is sacred. Every sperm is great. If a sperm is wasted, God gets quite irate. Every sperm is sacred. Every sperm is great. If a sperm is wasted, God gets quite irate. Let the heathen spill theirs On the dusty ground. God shall make them pay for Each sperm that can't be found. Every sperm is wanted. Every sperm is good. Every sperm is needed In your neighbourhood. Hindu, Taoist, Mormon, Spill theirs just anywhere, But God loves those who treat their Semen with more care. Every sperm is sacred. Every sperm is great. If a sperm is wasted,... ...God gets quite irate. Every sperm is sacred. Every sperm is good. Every sperm is needed... ...In your neighbourhood! Every sperm is useful. Every sperm is fine. God needs everybody's. Mine! And mine! And mine! Let the Pagan spill theirs O'er mountain, hill, and plain. God shall strike them down for Each sperm that's spilt in vain. Every sperm is sacred. Every sperm is good. Every sperm is needed In your neighbourhood. Every sperm is sacred. Every sperm is great. If a sperm is wasted, God gets quite iraaaaate! Actually, I'm more Protestant, and - as a member "of the Protestant Reformed Church, which successfully challenged the autocratic power of the Papacy in the mid-sixteenth century, we can wear little rubber devices to prevent issue." "...and, by wearing a rubber sheath over my old feller, I could insure... that, when I came off, (someone) would not be impregnated." After all, "...That's what being a Protestant's all about. That's why it's the church for me. That's why it's the church for anyone who respects the individual and the individual's right to decide for him or herself. When Martin Luther nailed his protest up to the church door in fifteen-seventeen, he may not have realised the full significance of what he was doing, but four hundred years later, thanks to him, my dear, I can wear whatever I want on my John Thomas,... [sniff] ...and, Protestantism doesn't stop at the simple condom! Oh, no! I can wear French Ticklers if I want....French Ticklers. Black Mambos. Crocodile Ribs. Sheaths that are designed not only to protect, but also to enhance the stimulation of sexual congress....I can go down the road any time I want and walk into Harry's and hold my head up high and say in a loud, steady voice, 'Harry, I want you to sell me a condom. In fact, today, I think I'll have a French Tickler, for I am a Protestant.'" But, I digress. Monty Python is great.

Re:In related news...

Fine so long as I can claim the dependants.

Re:using that to condemn phony accounting is fine

if the RIAA charges more than you want to pay, that doesn't mean you get to take it anyway.

First, it's not theft, it's copyright infringement.

Second, if a person can't afford to buy something, they're not morally obligated to thrash themselves with the spiked whip of capitalist ethics. They hurt no one by doing so.

Strict adherance to law is simply strict adherance to politicians. They're the ones who make it.

Re:using that to condemn phony accounting is fine

...if a person can't afford to buy something, they're not morally obligated to thrash themselves with the spiked whip of capitalist ethics...

Much like if a closed source software company wants your software, but can't "afford" to abide by the rules of the GPL, they're not morally obligated to thrash themselves with the spiked whip of GNU ethics.

If, like many of us, you object to the scenario I have outlined above, you will want to vigorously support copyright law. That is the root of your moral obligation - not capitalist ethics, but your own ethics. This is very much like supporting free speech: I may object to the uses that the RIAA and MPAA make of copyright law, but I will support their right to do so.

Re:using that to condemn phony accounting is fine

The supposed victims of copyright law shouldn't be able to ask for taxes on CD's and internet connections

You mean like in Canada and most of Europe, where this happens?

You shouldn't get to copy their stuff without permission, because our laws say you don't have the right to.

You mean except after 28 years, or for that matter, any reasonable delay, when it becomes public domain? Oh, I mean lifetime of author (~60-80) + 75 years.

Laws don't have to say what's right. The beauty of the US Constitution is that I have many rights, that there wasn't any need to explicitly put into writing. That "our" laws, and by this, I'm using your words, not mine, say otherwise, is sad. But "our" isn't so accurate anyway, is it. Some corporate lobbyists sent a Lear jet to DC, to pick up a few congressional friends for a game of golf at a resort. You see, senators like that, because there's not that great a chance that Air Force 1 will ever be theirs. Then, the lobbyist tell them how horrible it is, that Mickey Mouse will be public domain, and they'll lose something they deserve to keep! Oh no! But the senators, high on complimentary nose candy, they're too stupid to realize, hey, only a 2 minute clip, Steamboat Willy is actually going to become public domain, because Mickey is trademarked.

And then, the really fun stuff starts. Millions of apologists like you stand up, and say "Thank god we protected Micke!" even if it means you're being stolen from. As if some korean knockoff could be any worse than the tripe Disney tosses to the public.

There exist many systems far more efficient and fair for compensating creative people. But we're not getting close to those systems, we're moving away from them. So forgive me if I roll my eyes when I see you cheerleading.

Re:using that to condemn phony accounting is fine

[snipping sarcastic rebuttal]

Sorry, but you completely changed the point just to fit something unfunny. I'll bypass it for the points you attempt to make:

Your attitude wouldn't be nearly so obnoxious, if the subhumans you were apologizing for didn't try so hard to murder every single bit of free entertainment there used to be.

How's this? I'm not apologizing for anyone, nor supporting the actions of the RIAA/MPAA. I'm against anyone who thinks that if they can't afford something, then they're perfectly allowed to steal it. Steal, as in, not pay for something which can only legally be obtained by paying.

You can't afford Windows XP Pro, but hate Windows XP Home, so you should be allowed to pirate it because it's too high a price. Same with Photoshop and Acrobat Writer.

No one's being hurt, after all, since you couldn't afford them anyways.

Except, well, you're gaining something from their use and taking away a profit from those who created it. There are free alternatives to nearly every software package out there, so why not use them? If they don't meet your needs, lower your needs or raise your disposable income.

For music and movies, there are free alternatives. Nick Park released one of his ten mini-films for free on his website. Many big bands have free music on their websites. There are concerts you should be able to find in your area which have little to no charge to attend.

So, again, how on earth are the RIAA/MPAA killing free entertainment? Oh, yeah, they're trying to retain their monopolies and losing. So what? Help them die off by NOT listening to/watching their productions, even if you could do it for free, and support those who meet your price range or code of ethics.

How long til they actively start lobbying against it? With software, we already see the "free/open software threatens the livelyhood's of programmers!" bullshit, and that being true (god, that was hard to type, even as a "for the sake of the argument"), does not the guy that puts up a free novel on the web not steal from those trying to sell theirs?

So? Educate the opposite. Pass out free copies of software you legally can. Offer to train a person or two in how to use it so that perhaps they can show off to others, and pass along the knowledge.

But playing the "Someone else put this up for free, so we must stop it" bit is boring already. There are free novels available, and free stories, free music, free movies, free everything. As much as people hate competition and will try what they can to limit the damage competition does, supporting free alternatives helps them to grow. So please stop using this as an argument that free alternatives are dying; they won't if people like you help them out.

If I play the guitar on my front lawn, am I not robbing poor little Britney Spears?

No, and I have no idea why you bothered with this logic. It's not based on anything in my post.

You arguments are old and tired, and have nothing to do with logic. If they want to be artists, fine, you'd think they'd be flattered so many want their "art".

How does it have nothing to do with logic? The parent poster suggested that if people cannot afford a service, they are not morally obligated to pay for it, but can still receive it. Where's the logic in that? And I provided examples of how stupid it really sounds when it does not involve a geek trying to get free entertainment.

But no one said that they had a god-given right to make a job of it, or that they have any say in how I arrange bits on my hard drive. That they could make a living out of it, for a few decades, that doesn't make it any more profound or righteous.

Nor did I even imply it. However, no one has a god-given right to get services for free that are otherwise only obtainable through paying channels. Whether or not you could afford it makes no difference. You want that welfare, contact the gove

Re:Dont forget

> There are 2 ways to get music, buy and and steal it

No, there are 3 ways: Buy it, Steal It or Copy It

Copyright Infringement is not theft. It is kinda "like" theft, except nobody is left without the stolen item.

Until online music stores allowed you to buy music on demand for a single track, the only way to get music on demand for a single track was to commit copyright infringement.

Many students download music. They don't have music to spend on the music. How this can be termed a "lost sale" is beyond me. More like "free music for students might lead to future purchases when they have money" ... this works for Microsoft and software. Let's not get onto percieved value of music either - I buy most of my music at between 3 and 7 a CD from a store called FOPP in the UK, or online at play.com. This is what I consider a reasonable price for a CD. Not 14 to 18 that most new music comes out at - especially if I've only heard one or two tracks from the CD. Singles are overpriced as well ... 1.99 including video would be acceptable ... not the 3.99 or more that many of them are.

I'm sorry, but steal is the wrong word.

Re:Dont forget

> There are 2 ways to get music, buy and and steal it

No, there are 3 ways: Buy it, Steal It or Copy It

Where along the line did we forget Make It?

Re:Dont forget

I am somewhat reminded of a post regarding the appraisal of the Asian software market, and some of the ways the BSA calculates losses. From what I remember, it went something like this:

If Autocad Super Deluxe Enterprise Edition costs $10,000, and 100 Chinese children install it on their home PC, it obviously cost the industry One Million Dollars!

Same difference. If the RIAA stopped being a bunch of whiners and offered a P2P service for $10/mo, they would make SO much money. $120/year is MUCH MUCH more than I spend on CDs in a year. Unfortunately, some organizations are too set in their ways such that they wouldn't know opportunity if it threw a suitcase of money at them.

Re:Dont forget

$10 a month for unlimited downloads sounds great... although I don't think people would go for it for one simple reason... the P2P part. If they're paying $10 a month I can't see many people being willing to share their upload bandwidth, especially people on dial up and those with picky broadband providers. Maybe the solution to this though is treat bandwidth like a $$ credit. For every 100mb uploaded we take a dollar off your monthly fee. (of course then you're probably opening yourself up to some sort of scheme where a group of friends just downloads everything from each other)

The solution I see is the magic $5 price point for cds. Then you're getting into the range where it's harder to justify piracy or going to the trouble of burning your own, for the simple fact that you get a shiny new pressed cd with artwork for a low price. Plus $5 is like the magic number in the U.S. since you can get a value meal at most fast food places for that. I think a lot of people would go for that because it's easy to justify $5 since a cd is more permanent than a meal and americans are good at rationalizing away things like that. Oh I skipped breakfast=$5 so I'm breaking even for the day.

Re:Dont forget

Obviously either way you want the music. So if you stole it, it should be considered a lost sale, as you obviously wanted the music but chose to steal it instead of buying it.

Not true. Hypothetical example: I'll grab a copy of the latest Creed album (insert favorite over-hyped band here) if it's free and yeah, maybe I'll listen to it once or twice, but it's not worth it to me to pay $17.99, $15.99 or even $12.99 to be able to listen to it. So no, not every download is a lost sale. It's just basic economics:

• 10 people will buy it at $20
• 15 will buy it at $17
• 30 will buy it at $12
• 90 people will buy it at $1
• and millions will "buy" it for free.

Re:Dont forget

Wait hold the phone, you are saying there are ten people that listen to creed?

--Joey

Re:Dont forget

Wait hold the phone, you are saying there are ten people that listen to creed?

No. It was a hypothetical example, because no one listens to Creed.

Diatribe

There are 2 ways to get music, buy and and steal it (and please no diatribe on whether steal is the right word).

OK, you *know* it's the wrong word, and yet you use it anyway? You sir, are being an industry shill.

So if you stole it, it should be considered a lost sale, as you obviously wanted the music but chose to steal it instead of buying it.

A "lost sale" is someone stealing a CD off the counter, or even a customer walking out without buying anything because the clerk pissed them off - but we are talking about copying from media that has alrady been bought, not the theft of a product. It's a subtle difference that business doesn't like to acknowledge because all they see is dollars that they didn't get. It's like NOS getting pissy abuot "lost sales" when people build a DIY nitrous system for their car. Sure, they didn't sell a kit to someone who was interested in their stuff, but if the price was closer to the reproduction cost + hassle of DIY, they probably would have. Not being competitive in the market place is the reason they "lose" sales like this, plain and simple.

Once again, it's not a lost sale if you weren't going to get it anyway. I'm interested in lots of music, but I'm not going to buy a $32 NZD industry backed CD because they are a complete rip-off (I also don't download MP3s either). Having said that, I bought a $5 NZD CD of driving music from the gas station last night. Pricing is a key issue - they'll bleat about the cost of producing new music, but if the industry wasn't snorting their profits and spent less playing at being rock stars prices would be more realistic.

And BTW, the same retail vs wholesale thing is the reason (pop star|idol) tops the charts the week of release - nobody bought it except the stores, but the punters see it in the charts and buy it 'cos a) it *must* be good if it's in the charts, b) it's advertised everywhere so it's all they know. The music recording industry is a joke - go down to the pub this weekend and supprt your local bands instead.

Re:Dont forget

The alternative is to account for the loss, like everyone else does, rather than attempting to mock up some elusive misdirected profit figure. For example:

I make a product; let's say it's a limited edition Newt Gingrich action figure. It costs me $2 worth of materials and I pay various employees about $1 worth of labor per item. Figure another buck in there for distribution costs. I sell these items for $28.50.

Now someone steals one of these little items. What have I lost? By normal accounting, approximately four bucks. By the RIAAs accounting, $28.50. Sure, $28.50 is what they list for, but does that mean that if I decide to list them for $285 each that my loss per item is now ten times as much, even though no one is buying them at that price? This is like those adds which throw in several free items and claim "A four hundred dollar value, only $19.95.". The only legitimate way to account for loss is by demonstrating what the item cost, not what you are asking for it. In fact, such accounting is circular, since the list price of a product invariably includes a markup to account for losses due to shoplifting.

Now, let's take this one step further. Someone sees one of my action figures in the store and, since they cannot afford one, goes home, looks at one the neighbor just bought and makes one which looks just like it. (My grandmother did this with Cabbage Patch Kids while I was growing up. She would make them for the kids whose parents could not buy them.) Now how much has the manufacturer lost? By any normal accounting, absolutely nothing: no materials, no labor, no distribution costs.

If this is done on a massive scale, then some loss of market can be alleged. On the other hand, most of the loss is not caused by the "theft", but by the fact that the manufacturer priced themselves out of a market. If those action figures where sold for $6 (a healthy 50% margin), someone would probably not waste time trying to duplicate it. My grandmother would not be making cottage industry Cabbage Patch Kids if they had sold for $10 apiece instead of $150+. This scenario only occurs when the price of an item is totally out of line with what it really costs to make the item.

Now, the unfortunate part of this, is that people should respond by supporting local, independent artists instead of copying RIAA distributed music. That may be, but you should recall that the RIAA has worked very hard to squash the distribution of anything they don't control. I happen to know a bunch of small-time musicians and performers and personally, I would rather support them then copy the crap that the RIAA publishes and, personally, I do. But, just like kids getting tormented in school for not having a Cabbage Patch Kid (and kids can be vicious, it is hard, even as adults, to not be mainstream and listen to mainstream things. The various cartels have made mainstream music and movies a requirement for participating in modern culture. If you don't have it, you aren't with it, you can wait outside.

Re:Dont forget

This actually is a bad analogy: you might not have bought the car, but *someone* probably would have. Since only one person can be in possession of a particular car, your (hopefully hypothetical) theft IS a lost sale: not only does the owner lose the potential sale to you, they also lose the potential sale to every other customer on the planet.

This is analogous to walking into a CD store, taking a CD off the shelf, and walking out without paying. The difference between shoplifting and making an extra copy of a CD is left as an exercise for the reader.

Daniel

It's not something we can ever get hard numbers on

I'm sure you know ever really getting hard numbers on piracy is impossible just because the nature of the industry and who would really buy something if they couldn't get it for free.

Honestly the responce to it? I think they should embrace and encourage, maybe give a biz model similar to what Napster was pushing for. A distributed model (sign the music so you know it isn't tampered with) that will is a premium up and above the free realm stuff like kazaa. That way people still get their free stuff, the music companies get a shit load of revenue without much effort on their part and everyone is a little happy.

Of course they want to have absolute power over their product, think of the profit that could be made if they could control it no matter what. Or if they could do a pay to play model(pay per view), or if they could figure out a way to pull a microsoft in that they have a limited seat license that only one or 2, etc people could watch that copy of the movie at one time. That is a gold mine in their eyes and will be what they go for. Is it right...? No, but do they want it? Yes.

Piracy, P2P, and etc are just the latest buzz words for them to try and get what they can. Remember a couple of years ago how piracy was akin to supporting terroism, it is just getting more attention from you and I because it is now in a field that is affecting us more as techies.

1900s called, they want your business model back..

Sales are down for the RIAA... they're considering a CD sold at the point when they get paid for it, the point that it lands in the warehouse of a store chain, not the point at which it lands in a consumer's hands which is where Soundscan sets up its counting points.

The fact that store shelves are holding less in inventory is bad for them, but isn't exactly a sign of piracy, just a sign that the RIAA's business model is becoming dated.

I'm pretty sure that the major chains such as Wal-Mart and Best Buy would love to have a small CD factory in the back of each store in which they could print the discs and surrounding paperwork on a just-in-time basis. Afterall, both the music and liner notes could be available to the store over a digital network. Why ship physical packages that might not sell when you can just ship blank disks and figure out what to put on them later?

Bottom line, it's going to get worse for the RIAA. They profit from the wastes in the system, and the system just keeps getting better at not buying things that can't be sold to consumers...

Re:1900s called, they want your business model bac

Things change. Typically, no, commercial CDs aren't burned by a Plextor drive at the factory, but the market is changing and that's directing the industry to change too.

If burned discs aren't a solution, then they have to come up with a different solution. If they find a way to press one-off CDs because of the prodding, great for everybody. But maybe, just maybe, that's the hint that CDs themselves aren't the solution.

Don't consider it a problem that it can't be done now - it's an opportunity for a new product to be invented, a new mechanism to be introduced. Could be a digital distribution medium that will actually be researched rather than the crap they've been hacking together lately.
-N

I don't think it matters

If they have the moral and legal right to seek action against people who pirate music in the case where piracy is costing them lots of sales, then they have that same right in the case where it doesn't hurt them much or at all (or even helps them). Whether you have the right to copy music should not be decided based on how it affects the profits of the companies who make it. Either it belongs to them and these restrictions are permissible, or they are not.

Re:I don't think it matters

That's true. The problem is that using their numbers, they are lobbying congress to take consumers rights away and make the penalties for "casual piracy" (a few songs, as opposed to running a pirating ring where you copy and sell 1000s of discs) rediculous. They are also trying to do things like extend copyrights and such, which can easily negativly effect consumers.

They have the right to fight piracy. They DON'T have the right to use wildly missleading numbers to convince the government to help them prop up their failing business model.

Re:I don't think it matters

Well they have the right to use whatever misleading numbers they want.

Um, no they don't. It's called fraud.

Funny numbers?!?!

the RIAA is not reporting the most 'useful' numbers to the public."

OMG! Someone is using statistics to slant an issue their way! OMG!

Re:Funny numbers?!?!

All statistics are made up anyways, 3 out of 4 people know that.

Brownie points to the person who can identify that quote.

Well it makes since if you factor in....

... they have to hide the money they are keeping (stealing) from the artists somehow...

How Exactly is That Different

From all those companies lying about their revenue during the height of the stock market bubble/scam? Are the numbers the RIAA is reporting to us any better than the numbers Enron or Tyco reported to us?

Re:How Exactly is That Different

From all those companies lying about their revenue during the height of the stock market bubble/scam? Are the numbers the RIAA is reporting to us any better than the numbers Enron or Tyco reported to us?

The RIAA's numbers are at least correct counts of what they're supposed to be representing. However, consumers are paying less for music doesn't ring too when it's the wholesale transactions going down but not the number of retail transations. That just says there's less CDs sitting unsold on shelves these days...

We don't care about your stat...

Soundscan would also count an "unsigned artist's" CD just the same as any other because it went through the cash register... but the RIAA's stat doesn't include CDs sold by companies that aren't members of their group.

The RIAA represents most of the recording industry, but not all of it. Sales going down for the RIAA members does not always equate to sales going down for the industry...

You've got to make sure you know what a stat was really counting before you make conclusions based on it.

Re:We don't care about your stat...

"The RIAA represents most of the recording industry, but not all of it. Sales going down for the RIAA members does not always equate to sales going down for the industry..."

I agree. The way the RIAA calculates sales, by the "number of units shipped to retail outlets," is very flawed. I'm sure all those purchases I've made through emusic [emusic.com], the iTunes Music Store [apple.com], DMusic [dmusic.com], and CD Baby [cdbaby.com] haven't been included into their [RIAA] numbers.

This leads me to believe that music sales are actually up worldwide. Until *all* music sales are calculated (from digital downloads and independent/non-RIAA CDs to RIAA member CDs), I don't think we'll really know for sure what the sales numbers are like.

Re:We don't care about your stat...

That's the crux of the matter.

The fact is that the RIAA members had a near monopoly on the means of distribution until the last few (perhaps as few as 2) years. What is really going on is musicians are taking back control of distribution. Just about every established band in my town has a cd. You can buy them at shows, or from web sites like CD BABY, or even from independent record stores run by people who care about music and musicians rather than just shoveling product.

This is good for musicians but more importantly its important for listeners because as a result a lot of styles, both historical and regional, can once again be heard.

But the RIAA is in trouble because their business model is no longer valid - that business model was to extract monopoly rents (to use the economists jargon) from the distribution system.

Given that their technology based initiatives will be useless against organized piracy who already operate outside the law one can only assume their real objective is to regain monopoly control of the distribution channel. To do that they would have to mandate equipment that could only play media licensed by their members, and I don't think anything passed so far is that draconian.

Reminds me..

..of the people who are complaining to Congress about the cost of 'frivolous' lawsuits whilst buttering up their shareholders in their annual reports about how the cost of litigation 'will not have a significant impact on the bottom line.'

The bottom line is that anything big businessmen have to say should be taken with a pinch of salt.

It's called "Just in Time" Inventory

in the past, the RIAA always shipped considerably more units than were sold. Why the change? Retails stores simply want less inventory, so they order less, even though they are selling more.

This trend is commonplace everywhere. Retail outlets don't want things sitting on their shelves for two reasons: First, because they have to PAY for them and second if they don't sell, they have to PAY to ship them back.

What the record stores are doing has been done for years in most other retail outlets. It's called "Just in Time" inventory. For example, a grocery store tries to predict how much lettuce they'll sell and only buys that much, lest they get stuck with rotting produce. McDonald's made a science of this back in the '90's.

Now, the RIAA wants to use this new inventory trend to SPREAD THEIR LIES! It shows just how dirty rotten to the core they are! They KNOW what's going on; they're cherry picking stastics to LIE!!

Magic...

Apparently, people who deny that magic is real haven't looked at statistics. After all with statistics and polls you can take information that you want to see and conjure up some arcane formulation that will make it look as if that information is in fact the truth.

If we follow this vein, there are many other forms of magic, such as economics. Following this even further, we can point out the evil warlocks of the world, those who practice their economics and statistics steeped in their own lies.

I'm sorry, it's Thursday night.

Court of public opinion

Of course the RIAA is going to fudge the numbers. If word got out that they were *GASP* not losing money, or at least not as much as they lead people to believe, it would make it oh-so-harder to justify their legal pursuit of grannies and pre-teens to the general public. As it is, it's a game of "oh look at us, we're the poor RIAA, we are making so much more money in a week than you poor consumers will ever make in our lives, but it's not as much as it used to be... we used to make more in a DAY than you would make in your entire life! Take pity on us, and understand why we are fucking the artists, and giving them pennies for every CD sold, so that we can afford limousines and caviar for our poor underfed kitties!". And the consumers eat it up, as evidenced by the ill-informed dolts saying things like "duh, anybody who downloads music off the internet is a thief". The RIAA makes it so that even if you download music that you're ALLOWED to (like Indy) it has a stigma associated with it. It's not about protecting "the artists", or the IP, it's about ensuring their lifestyle. They're thieves too, but in a way that is so much worse than average Joe Public who jumps on Kazaa or SoulSeek to download the new Creed/Eminem/[insert shitty pop band here] song-- Joe Public downloads the song because he likes or loves music, the RIAA and MPAA'ers of the world do what they do because they are money hungry fucks who will do anything they can to maintain their dominance.

I'm not a religious person, and I normally don't resort to Biblical citations, but I think this one applies:

"The love of money is the root of all evil." (also one of the most misquoted passages in the Bible just for the record).

On the reverse side, piracy is not the ideal situation either. I am a musician, and I hope someday to make a living off my music, but I know it won't be with a record deal-- and I sure as hell know it probably won't be from selling records. Hopefully by the time I am ready to try my music as a full time career we'll have something a bit more established that will allow truly independent music distribution, with a vehicle that guarantees the artist will at least see some money for their hard work.

Dan

honesty, not usefulness

but it is fairly obvious that the RIAA is not reporting the most 'useful' numbers to the public

I believe the word you were searching for was "honest", not "useful".

Then again, this is peanuts compared to Hollywood which manages to make it look like every single movie looses (or makes very little) money so they don't have to pay taxes or pay people who are supposed to get a cut of the profits.

Of course, most of corporate america does exactly the same thing, which is why they've gone from a 52% tax share (versus individuals) to under 5% in 50 years.

Power Hungry

Heh...

Massive power hungry, money grubbing corporations telling lies ..

Who would have thunk it .. ???

``` ~~~
O_o

Easy..

Like other people have mentioned, record stores have been getting out of the business left and right. Either they've been closing, or switching over to more mixed media stores. The big boxes don't order huge inventories, especially of back catalog items, and smaller stores have been switching to other media types (DVDs and games mostly, very lucrative and growing markets)

So is this due to piracy?

Err..no.

Sales of the hit new music has remained pretty constant (which is expectable in a mostly stable marketplace), which are often the most easy to download, so it makes it obvious that something else is at play here...

Maybe it could be the MASSIVE growth of used media stores that have been popping up all over the place?

So what can be done about that? It's obviously legal, and easy to say that it's ethical to do, after all, we do have the right to sell what we have paid for...

My suggestion for the RIAA is to actually lay off the worrying about piracy, and instead, run an information and advertising campaign informing consumers about how when they buy a used CD, they are in fact ripping off their favorite artist. By changing the focus, and acting through education and not litigation they can regain some respectability, especially if they make a good argument for it.

ahhh statistics

You know what they say 97.89% statistics are made up on the spot....

This was obviously a farce from the get go. Mp3's open people up to music they would have never bought, same can be said with libraries and books.

Statistics

Ahh, statistics are wonderful things, aren't they?

Reminds me of a couple of classic quotes about statistics:

Aaron Levenstein once said "Statistics are like bikinis; What they reveal is suggestive, but what they conceal is vital."

and Thomas Carlyle once said, "A witty statesman said, you might prove anything by figures."

The thing is, I dislike the RIAA quite vocally, but I'd still probably believe them if they said their revenue is down. But the first thing they teach you about statistics in math is that "Correlation does not equal causation."

The Coalition of Independent Music Stores

This is why I support The Coalition of Independent Music Stores.

Boycott the RIAA the Week of July 4th

This is another example of the kind of deceptive practices that the RIAA is using to convince congress to pass laws that turn our kids into criminals. The RIAA will continue to pursue this path until they learn that consumers will actually take a stand against it.

I would like to urge people to declare their independence from the RIAA on the week of July 4th, 2004. Boycott them. Do not purchase music or listen to the radio during that time. Instead, why not check out the independent artists that distribute their music for free? Show the RIAA that you know how to hit them back where it hurts... in the wallet.

In other words

In other words, the geek boycott of RIAA labels is failing. I don't really see this as good news.

lets setup a shell to 'stuff the channel'

This shipping product to your retailer/resailers just to have it round trip and come back to you later is called 'stuffing the channel' its an old trick. Sales Scum (tm) use it all the time to inflate numbers at the end of a quarter. If they (RIAA) is going to count numbers by the overly simple math then lets beat them at their own game. I say we setup a "Retailer" that never sells anything but just orders shipments like crazy. This "Retailer" Hoovers up as many units as they can ship. Then it just turns around and ships them back as unsold stock. We might even be able to work out a deal with the delivery companies to not even deliver the units just move them from the shipping dock to the recieveing dock at the distribution points.

This is nothing new

ARIA tried to hide their record CD sales from the Australian public Music industry way off track with song and dance about falling sales [smh.com.au]

Profit Model of the New Millenium

1.) Announce a wholesale price hike, causing retailers to stock up on inventory, and purchase less the following year
2.) Attribute "fewer sales" to P2P
3.) Sue the butts off of "pirates"
4.) Appeal to the public as being truly hurt by these individuals, while extorting money from defenseless individuals who couldn't afford music in the first place
5.) ???
6.) Profit!!!

Note: By "pirates", I am referring to individuals who share music they MAY indeed own yet are "breaking the law" by doing so.

I don't say piracy is right or wrong. For those who can afford licensed media yet pirate, shame on them! For those who are concerned with the cost of living - I can't blame them. The RIAA isn't any better than the "pirates" they sue, as long as they employ dubious tactics.

RIAA is Dying

Netcraft reports, .., RIAA,..., Red ink, ;)

It would make a great troll!

Hardly Surprising!

Since most of the "losses" come not from file traders but from those who copy the full disc, including the liner notes and sells those on the street and even to music stores.

The RIAA once reported one in six discs that you buy is a pirate disc. This is where they are truly losing money. However if all this contrary information were to make it to the courts that are granting the search warrants for ISP's then it would be that much hard for the RIAA to get those warrants....and that would prevent them from getting the easy money from going after file traders.

Speaking of this easy money, has anyone seen the figures of how much the RIAA has brought in from these Nazi tactics and how much of that total was reimbursed to the artists who lost sales? Also how does the RIAA determine who has been pirated and how are the reimbursed? If someone were to bring these point up to the judge who is issuing warrants then the RIAA might really have to do something more than whine to get a warrant.

let's ignore the existing music industry!

why not create an alternative music business together with unknown artists? i just had an idea of a new promotion method - the permanent listening test... i posted it here [slashdot.org]

nico

It makes sense with their way of thinking...

They believe that every single pirated song was a guaranteed sale, which is not the case.

Just because a person has 4,000 songs doesn't mean that they would've purchased ALL of those CDs had they not had the means to download them... but the RIAA stands firm in their belief that this is possible.

A few possible explanations.

1. fake products -- scam artists shipping stuff to stores that RIIA membership doesn't know about -- but good enough to fool consumers (haven't heard of this running rampant).
2. Less spoilage (shipping fewer, selling more, returning way less). Better profits all the way 'round. Works for stores, artists get more money, so does the RIAA.
3. RIAA scam (they tell artists "140M records", but they sell 160M) -- but the RIAA wouldn't do that would they???

Note that, in all possible circumstances, record sales are up.

Only in (1) would the RIAA (and artists) actually get less money, but that's not the fault of the "pirate scum" 12 year olds that the RIAA insists on suing. If this is the case, then the RIAA needs to start going after the real pirates, and stop suing kids.

For (3), The artists are getting less money, but that would be because the RIAA is scamming on both ends (cheating artists, raising prices, suing customers). It'd take a public scandal to fix that.

The Wal-Mart Effect In Action

As other posters have pointed out, retailers are carrying less stock than was previously mandated by the RIAA. Why? While we'd like to think this has something to do with mp3 and Kazaa, I think it's primarily due to Wal-Mart.

Wal-Mart is renowned for forcing it's suppliers to radically revamp their operations to meet Wal-Mart's needs. Wal-Mart dictates to it's suppliers, demanding just-in-time inventory control and annual - if not quarterly - wholesale price drops. 20% of CD and DVD retail dollars now flow through Wal-Mart. With that kind of buying pull, recorded music became yet another consumer item that Wal-Mart could live without, but that couldn't live without Wal-Mart. If we go with the theory that Sam Walton's boys popped the RIAA's cherry during the buyer's renegotiations, that probably provided leverage for other retailers from Kmart to Tower Records to cut the same deal, especially during a down economy.

I wouldn't be surprised to find that the gusto with which the music industry tries to squeeze more blood out of consumers by lobbying Washington and other capitals was in direct relation to how much of they're getting squeezed in Bentonville, AR.

The Short, Short Version

The RIAA is lying because, like most corporations, it is only interested in the preservation of its profits.

I met a sony music contracts executive

on a shared cab ride 2 days ago, and we got to talking about P2P, so I slyly asked her if perhaps they had considered that "maybe DVDs, game consoles, cell phones, and gameboys may be competing for entertainment dollars?"

"NO, Absolutely not - its P2P, the children don't understand and need to be educated. Those other explanations are nonsense." she said

I said "hmmm, well are you sure, cause it..."

"Yes we are absolutely sure. These P2P programs are set up to steal and kids don't realize what they are doing it wrong. Its silly and inexcusable, we need to change their attitude."

So you see - they don't CARE to see any facts or evidence that point away from their view. They don't WANT to hear it. And this not wanting or caring will re-enforce their current behavior patterns. It will also cloud their minds such that EVERY way they approach the problem will have P2P destruction or absolute control in mind.

What they DO understand that "war does not determine who is right, war determines who is left".

The Mighty Moses Strikes Out

Mr. Avalon almost got a clue there, but he missed the forest because he was able to identify two new varieties of trees.

Maybe next year he'll notice that:

a) Soundscan reports millions more CDs sold at retail than the RIAA reports having shipped to retail outlets (about 60 million for the past two years);

b) Since 2000, the numbers of "units" shipped to "promotional and specialty" outlets (aka record clubs), has dropped by 50%, accounting for the bulk of the industry's decline;

c) The REAL important numbers are how many units were shipped and how many units were returned.

The RIAA's numbers are designed to provide no useful data whatsoever.

These numbers don't matter

Music piracy (or whatever you'd like to call the rampant copying of music) is unrelated to the numbers. It's wrong. It's always been wrong and sitting here trying to come up with excuses is hypocritical from a group that zealously defends Open Source.

After all:

* No one loses the use of the original source when someone like Linksys modifies the source and doesn't release it.

* No one loses money because a company doesn't release its changes back to the community.

In short, if copying music is okay, then taking open source projects, modifying them, and selling them commercially without releasing the source can't possibly be bad.

Either intellectual property means something, or it doesn't. But make sure you appreciate the ramifications before espousing the "anyone should be able to do anything" argument.

Steve

so this goes on and on and .....

I have read through the posts so far, and a considerble number of the posts made on the subject before and a lot of the analogies come close, but don't hit the heart of it for me.

Here is the way it is for me.

Many years ago (I don't know how many - google it yourself if you're interested), Natalie Imbruglia came out with a song called Torn. I have listened to this song so many times I can almost repeat every note she sings, AND every note the rest of the band plays.

This song ranks among my top 10 all-time favorite songs. It fucking gives me goose bumps on occasion when I listen to it, just because of the way she uses her voice. On the basis of this one song, I am ready to claim that she has a vocal talent worthy of note (even if....(see rest of post)).

So, when all these p2p networks started springing up, I checked into them, in the interest of deciding which CD's would be worthy of MY hard earned dollars. Natalie was my first test case.

My purpose for this was not to download mp3's (at least in the final stage). I happen to like a lot of music where even the tinniest ear can detect the difference between formats. I certainly can. My purpose (as far as Natilie was concerned) was to see if there was enough of her other stuff I liked to purchase a CD of hers. This was the first time I used a P2P network. (I get my porn elsewhere.....tttthhhhhuuuuuppppppttttt).

Not a chance (so far..... I understand she is working on a third alblum).

She seems to be techno-pop, a genre I'm not all that interested in, but I downloaded all of the songs off of the two released CD's I could find of her for sampling.

Conclusion: I still think Torn may be one of the best songs ever written - as it was performed by Natalie. One of these days I will get around to seeing if she wrote it, or it was done by committee and she was only the performing artist. It doesn't really matter to me.

BECAUSE: I found (so far at least) that this is the only song of hers I like. I don't know if the one song was in line with her normal fare and I just can't appreciate the rest of her music - or this is a fluke and the only good song she did.

For the purpose of discussion, it doesn't really matter. What mattered to me was with the availabilty of downloadable mp3's, I SAVED at least 20 dollars because I didn't buy either of her CD's for ONE FUCKING SONG.

I've got more than a few years in me still but I ain't exactly young. Like many, over those years I have purchased LP's, 8-tracks, and cassettes of whole alblums because there was one or two songs on it I liked.

Those days ended long ago.

(okay, about 1975, when I had to start earning my own money).

In the last five years I have purchased two CD's. Alice Cooper - Welcome to My Nightmare, and Black Sabbath - We Sold our Soul for Rock and Roll. As you can see, Natalie isn't exactly my normal fare. For these two CD's I payed what I considered to be an equitable price. $7.99 and $5.99 respectively.

So maybe the RIAA counts the two Natalie Imbruglia CD's as lost sales, because I didn't buy at that time without listening to them first. If so, well.... everyone else has expressed an opinion on this many times that pretty much coincides with mine, but maybe for different reasons.

I don't buy ANYTHING now without listening to it first. Either I listen to it at the local library, the local Borders, or borrow it from someone I know who has it. If I don't like more than one or two songs on a CD, then there isn't a chance in hell I will buy it. If there is a song I really like, I may rip a copy of it off a friends CD, but this is not a lost sale, because I WILL NEVER BUY THE FUCKING CD AT FULL PRICE to begin with. I will wait until I can get it at the local Salvation Army for $0.25.

And that's the way it is.

To the RIAA: Deal with it fuckers. In the last 10 years you've managed to produce about 6 songs I like. Not exactly an exemplary sales position, is it.

RIAA shenanigans

Just another reason to add to my list why i will never buy another piece of music again, regardless of whether the deal the RIAA has sealed with Satan expires and the organisation is taken over by Jesus H. Christ himself. It's not like they will miss my monetary input, I haven't bought a CD since 1998 or so, but it's indicative of how irrelevant the organisation has become.

So what if their labels are losing sales?

I buy a lot more overseas and independent labels now than I ever did; and it's more due to internet radio and maturity than anything else... OMG OMG OMG they'll be going after streaming radio next... and making me take pills that turn me back into a kid??

Oh, but they are useful numbers

They help the RIAA's cause to clamp down on their customers rights and make them appear to be 'just protecting their musicians'

Just another fraud in big business, go figure. They are all corrupt to the core.

Useful numbers

Maybe I'm just being jaded, but I'm wondering if the more accurate numbers would be the number of dissolved nasal septums of record executives from a certain sniffing habit.

Politics as Usual

The RIAA must have used the same research firm that helped Dub-yah miss global warming.

The RIAA's Entire Mentality Is Full Of It

It's interesting how this whole thing started with the RIAA saying that consumers only own the "license" to listen to the music they purchase. According to them, the media doesn't matter. Using that logic, why I can't I return my scratched CD for a new media? If a CD is lost or stolen, why can't I mail someone a receipt and get a new disk since I own the license to the music? Why can't I convert my tape collection to CD for free. I OWN the license don't I? Its so hypocritical.

How can I feel sorry for their plight? Most music that I download consists of CD's or tapes which I own and are scratched; or owned at one time where it was lost or stolen.

If the music industry wants find out why sales are down (if what they say is even true) they should look no further than the crappy products that are hitting the shelves. There is only so much Britney Spears and candy ass boy bands the world can handle. Where is the quality music? Where are the artist that can actually play a instrument? Most of us are getting sick of listening to so called musicians who are nothing without producers, talented audio techs, and a drum kit.

Figures a LITTLE off?

In a not-so-surprising twist of the tables, RIAA reporting of 'losses' is a little bit off. Is anyone seriously surprised that lawyers would lie to us? I do my shopping on line to the extent possible because it's convenient and cost effective. Depending on the size of the orders I may or may not pay shipping - but I never pay the 8.5% tax which is always more than shipping.

Behold! The MTV Effect

Unless you lived in an elevator or beneath a secretary's desk, you may recall that the record industry was going nowhere until MTV arrived and introduced millions of viewers/listeners to hundreds of new acts. None of those listeners paid $0.99 to MTV per song (never seen the math based on a cable bill, though) but millions of those listeners ran out and plunked down $16 or so for a sparkling-new CD or relatively-new cassette. MTV+Sony Walkman+CD = Revived music industry. Internet+Apple iPod+IMS = Potential to re-revive music industry.

The music industry, like all collective monopolies, is terrified of disruptive technologies/innovation, even if the pay-off is beyond their wildest dreams. Very simply, they fear that the pay-off will be to SOMEONE ELSE like say... a computer company with tiny but loyal market share.

Watch for FUD, followed by lawsuits, followed by hostile takeover attempts, followed by legitimate offers with tail between legs. Repeat when next innovation comes. Kaut kas tam lidzigs...

MD.

Re:What else is new?

The short answer to there's two different measurement formats used. Decimal (GB) and binary (GiB) formats. Binary is used by Windows and decimal is used by the manufacturers. Both the manufacturer and Windows are giving you the "correct" number.

Binary numbers are numbers that are a power of 2. Decimal numbers are numbers that are a power of 10.

2^10 is 1,024 the closest Decimal number is 10^3 or 1,000 2^20 is 1,048,576 The closest Decimal number is 10^6 or 1,000,000 2^30 is 1,073,741,824 The closest Decimal number is 10^9 or 1,000,000,000

Now lets look at common terms: Kilo means 1 thousand Mega means 1 million Giga means 1 billion Tera means 1 Trillion

1000/1024 = .9765625 1,000,000/1,048,576 = .9536743 1,000,000,000/1,073,741,824 = .93132257

Noticing a trend yet?

At the Kilobyte size the difference is about 2.34% While at the Gigabyte stage the difference is 6.86% Since we're living in the day where it's relatively easy to put a full terrabyte of storage in your computer that "close enough" is becoming further and further from "close enough" At the Terrabyte level the difference is getting very close to 10%

Would you want to buy a hard drive that is labeled as 2^35 byte hard drive? Or would you rather see a 500Gb drive? I don't want anybody ever having to pull out a calculator to figure out how big their hard drive is!

Windows is the one reporting things wrong! Not your manufacturer. Windows does the binary calculations and then displays GB next to it. When GB is technically wrong due to it's definition. What it is actually displaying is the GiB size.

Since the GB number will always be so much higher than the GiB number it's a safe bet to assume that the hard drive manufacturers won't convert to using the GiB format. Memory manufacturers on the other hand are doing things right. You don't see then selling 1Gb of RAM as 1,073Mb do ya? It gets VERY confusing in the hardware world due to some people using 1 standard while they other group using the other one.

Re:What else is new?

"Look at the hard drive industry and tell me why my 80GB drive ends up being a 74.5GB drive when I format it."

That's because whenever a HDD is listed in GB's, it is using the calculation of 1,000MB = 1GB. The reality is that 1024MB = 1GB. That's why your 80GB HDD is 74.5GB when formatted.

In other words, 1,024KB = 1,048,576MB = 1,073,741,824GB. But the hard drive manufacturers use a simplified calculation and assume that 1,000KB = 1,000,000MB = 1,000,000,000GB which is completely wrong.

Re:RIAA

Hmm, have you been watching Rumsfeld lately?

Re:What else is new?

It's a very common practice in many industries to "tilt" the facts to their favor. Look at the hard drive industry and tell me why my 80GB drive ends up being a 74.5GB drive when I format it.

i do actually hope that the above was a rhetoric question... but just for the heck of it:

Giga is defined (in almost all of science) as 10^9; therefore 80GB = 80 * 10^9 Byte.
Computer Scientists have calculated most data sizes in exponents of "2"; therefore it is common to write KB as 2^10 Byte, MB as 2^20 Byte and GB as 2^30 Byte; this is also how your operating system will output your HDD capacity.

Recently it has been tried to introduce the units Mebibyte (MiB) and Gibibyte (GiB) for the exponents of "2", but it might still take quite a while (or may never happen) that the majority of computer scientists and the industry will switch to the new notation.

thus it is (due to ill-defined units) more or less correct to write:
80GB = 80 * 2^30 Byte = 8.59 * 10^10 Byte = 86GB

obviously it should really be written as 80GiB = 86GB, but such is our beloved computer science ;-))

yet, most likely you already knew that... well, next time better put the <irony> tags *gg*

Re:Lies, marketing...

Err, how did you arrive at that implication?

Re:Another shocking fact

Windows, yes; I'm dubious that Internet Explorer is still in favor among Slashdot readers. I know of few people that have tried recent builds of Firefox and still prefer MSIE. Mozilla used to be well behind when it came to user experience, but things have seriously changed.

I'm using a Windows machine at the moment because I'm not near my own computer, and I can't exactly put Linux on someone else's computer.

Re:What else is new?

All the people below going into details on number systems are correct, the computer uses 1024 bytes to a Gig, while the HDD makers use 1000 bytes.

However, this has not always been the way it's worked... at one time the HDD makers also used 1024 until someone figured out that by using 1000 it made their drives look bigger.

There is no other reason I can think of why they would make such a switch. I mean, why the hell would you want to sell a product that claims to be one thing, but when it's actually used is another?!

You try explaining the whole "Gigabyte vs. Gibibyte" thing to someone who isn't computer literate and watch their eyes glaze over while they wonder why their new 80 Gig drive really isn't.

Personally, I think the HDD makers should be forced to list their drive sizes as they will be reported by the devices they're plugged into, otherwise isn't it misleading?!