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iTunes Sales Ban Does Increase CD Sales 185

Posted by Zonk
from the sounds-logical dept.
Guinnessy writes "According to the New York Times, some music labels have deliberately stopped selling some new singles on online stories such as iTunes or Rhapsody while promoting songs on the radio, so that listeners will rush out to buy the CD album instead. The album appears in itunes at a later date. Not everyone seems to think this is a good idea. From the article: 'The labels are shooting themselves in the foot,' says Rhapsody's Tim Quirk. However, Ne-Yo's CD In My Own Words sold 301,000 copies using this method. Chris Brown's Run It, that was in the itunes store, sold 154,000 copies in its first week. Ne-Yo's So Sick was downloaded approximately 3.4 million times on the peer to peer networks during the week of his album release while the album Run It!"was downloaded approximately 5.3 million times in the same release period."
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iTunes Sales Ban Does Increase CD Sales

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  • I want the names and addresses of those millions NOW!
    • by Golias (176380)
      Why in the hell is this a "YRO" story???

      Do I have a "right" to pass up on the newest lump of turd to come out of Britany Spears's ass at the CD store and buy it from iTunes instead?

      Is it my "right" to not have to wait a few weeks to download it from an on-line music store?

      I don't get it.
      • Discriminating against online stores to force people who want the single NOW to buy an entire album at inflated cost should be illegal. Even though most of us don't give a shit, there are people (or someone's parents) who are being victimized ;p
        • Discriminating against online stores to force people who want the single NOW to buy an entire album at inflated cost should be illegal.
          Theres no price fixing scheme here. Should it be illegeal for Lucas to release his movies on video in such a way that you end up buying Star Wars "Jeff Portkins shot first edition." Its a free market, and there is no agreement to do this, just studies that show it works. Maybe we should outlaw studies?!
      • Do I have a "right" to pass up on the newest lump of turd to come out of Britany Spears's ass at the CD store and buy it from iTunes instead?

        Do you have an intention to purchase feces? Surely those aren't the best two places to look.

  • by fishdan (569872) * on Thursday March 09, 2006 @05:50PM (#14886094) Homepage Journal
    From the article..."Island Def Jam offered a discount to retailers who stocked the album, allowing it to sell at stores like Target for $7.98 last week" This is a great example of someone making up stupid numbers. The fact that more CD's were sold because there no downloads sold makes complete sense. If these people, who were going to legitimately buy a CD could not buy it online, then they would buy it in the store. If they were allowed to buy it online, would they buy it TWICE? The important figure (which are not revealed in this meticulously researched article) is which way did they make more money or which way did they move more units. The fact that they sell less CD's when there is another format to buy the media should not be a surprise to anyone (except for record execs, who can't count).
    • by Dutchmaan (442553) on Thursday March 09, 2006 @06:00PM (#14886184) Homepage
      From the article..."Island Def Jam offered a discount to retailers who stocked the album, allowing it to sell at stores like Target for $7.98 last week"

      So one can reasonably conclude that iTunes, at least in an indirect way, is forcing labels to sell their music cheaper in order to secure more sales!

      I don't think iTunes is going anywhere, but if it's presence causes labels to actually price aggresively the way it should be, then I think it's a good thing.

      • by bicho (144895) on Thursday March 09, 2006 @06:28PM (#14886431)
        I think it is not much different than printing a hardcover first and paperback later.
        • Only if. (Score:3, Insightful)

          by Belial6 (794905)
          Only if they drop a bunch of letters out of the book to make it take less space, then make you use one of those little red filters to read the paperback so that it would be difficult for you to go and photocopy it. ;)
        • I think it is not much different than printing a hardcover first and paperback later.

          I think you're on to something, but I'm not convinced the logic works.

          Print publishing has been around for a long time, and they have had a chance to perfect the pricing model. There are two questions, why are hardcover books more expensive than paperback, and why do hardcover come out first? The answer to the first is that hardcover books are a bit more expensive to produce. The answer to the second is a little more i

          • Some people are willing to pay more to get a book first, and they are willing to pay more than the difference between a hardcover and paperback copy - for example, a hardcover costs 10% more, but some people are willing to pay 40% more to get it early. If the publisher only released paperback, they would lose out on all the profits from the 'early adopters' while if they only released hardcover they would lose out on those who would be willing to pay a little less. So, release the hardover, which costs 10%

            • '' Then why not just release a paperback version first with 40% higher price tag and once early adopters have wasted their money, decrease the price to "normal". Is there any reason the publisher should use 10% valuable item for the first release? If the audience is ready to buy an overpriced product, they will do it anyway regardless of were it a paperback or a hardcover. ''

              Of course they wouldn't. With the hardcover book, you pay more money, but there is a perceived higher value. The customer knows that t
        • Which is lame enough as it is.
      • So one can reasonably conclude that iTunes, at least in an indirect way, is forcing labels to sell their music cheaper in order to secure more sales! I'd interpret it as: Cutting prices can increase sales.

        Also not mentioned here is that the Brown album was available for download ONLY for over three months before they released the physical album. '

        so what I see being 'proved' is that:

        • Disallowing CD sales for 3 months cuts into CD sales.
        • Cutting the prices for CDs increases CD sales.
        • exhausting your Radio play before releasing an album can cut into album sales.
        • Forcing fans to download music increases downloads.
        • Being available online for 3 months can increase downloads.
        and for number one......

        Bare statistics can be misleading.

        ((mumbles something about hanging by the toenails and being beaten by an organic carrot))

    • You hit the nail right on the head with the price reduction being the key. They did that deliberately to get numbers like that that they hoped would be misinterpreted.

      What the RIAA is all about is controling what choices you have in music. If you can only get the CD's that they distribute, they can force anything down your throat. If you can download any artist's music, the artist has much more power, and the labels much less. The RIAA would love to end all downloading of music -- because right now Ap

    • The important figure (which are not revealed in this meticulously researched article) is which way did they make more money or which way did they move more units.

      But you can't just compare revenue or profit anyway. Song X frequently makes more money than song Y. That doesn't mean that X's marketing strategy is better - it may have just been a better song, or appealed more to the masses.
    • The important figure (which are not revealed in this meticulously researched article) is which way did they make more money or which way did they move more units.

      which "they" do you mean? the record labels or apple/rhapsody? ultimately it comes down to margin for the content producing agency which is probably higher on a CD sale than on a ESD sale .. with IP such as this it doesn't have to do with moving units or distribution models - it has everything to do with margin and market penetration.
    • To be fair, I think the point they're trying to make is 'if the songs weren't available online, the in-store sales would be higher.' Specifically, I think this argument is meant to counter the people who say 'if it wasn't available online, no one would buy it.'

      Now, I don't think either statement is correct. If the songs weren't available online, yah, in-store sales would be higher, for people who'll buy in whatever format is most convenient. I also think there ARE people who wouldn't bother to go to the
    • RTWholeFA...

      CD First:

      "In My Own Words," burst onto the national album chart yesterday at No. 1, with sales of more than 301,000 copies, easily ranking as the biggest debut of the year so far. And just as eye-popping: the digital single of "So Sick" sold almost 120,000 copies in its first week, according to Nielsen SoundScan.

      iTMS first:

      "Run It!" was available for sale online for more than three months before his eponymous CD hit stores. During that time, Mr. Brown's song sold more than 300,000 copies.

      • > Noooo, Slashdot is 'news for nerds' and would never treat its readership as if they were illiterate morons.

        Slashdot posts stories to discuss. They don't write their own stories. The point of slashdot is comments like yours -- that's why people read slashdot. If you're just here for some tech articles, you're in the wrong place. (Check out digg.)

        If you're here for discussion, that's what slashdot is about. You're in the right place ;)
    • Given that the numbers are correct ( 301,000 CDs and 3.4 million downloads vs. 154,000 CDs and 5.3 million downloads) it's hard to draw any conclusion.

      If one takes the difference in downloads (1.9 million) and divides it by a typical CD cost ($15), one gets ~127,000. That's almost enough to make up for the difference in actual CD sales (it leaves a delta of ~20K CDs), with no marginal cost of goods for the record labels to bear.

      It all seems like a wash to me, and of course only has any hint of significance

  • by Opportunist (166417) on Thursday March 09, 2006 @05:51PM (#14886098)
    One sample? You draw conclusions from ONE sample? Hire some statistician, would you?

    There are SO many variables to be taken into account that could influence that. Do they target the same audience? To give a very drastic example, if you compare CD sales to download of a Techno song and a Country song, it does NOT matter when it comes out on which medium to predict almost flawlessly which one has a higher download and which one has a higher CD count.

    Were they released at the same time? If it is released around Xmas, that would boost CD sales compared to downloads (it IS after all easier to wrap a CD in gift paper than a bunch of bits). What's the weather like on release day? Bad weather and I'd rather download it instead of going out in the pouring rain.

    Do the CDs offer the same "goodies" that come with the CD? Do they both offer the lyrics in the booklet, for example, or some pictures of the artist? How about the CD cover?

    So please, before drawing conclusion from ONE SINGLE sample, at least make absolutely sure that the results are comparable. Or, better, get a few 100 samples before jumping to a conclusion!

    Aaaaaand, let's not forget: If it's not available from legal download... especially if the CD is DRMed into uselessness.
    • by op12 (830015) on Thursday March 09, 2006 @05:53PM (#14886121) Homepage
      Agreed...if the study is not based on numerous samples, this is garbage. And even then it can still be skewed. This is no way to measure the effectiveness/ineffectiveness of iTunes sales. You'd be just as accurate flipping a coin to tell you whether it impedes sales or not.
    • Most booklets dont have the lyrics you realize? At least the cds I am used to. And generally the album art, its nice to look at once for 5 seconds, then it gets tossed away.
    • One sample? You draw conclusions from ONE sample?

      What they're obviously missing is that denying iTunes sales increases CD sales which translate into more piracy.

      Good plan.

      • by Romancer (19668) <romancerNO@SPAMdeathsdoor.com> on Thursday March 09, 2006 @06:28PM (#14886430) Journal
        I'd like to see if there are any statistics on which initial purchase method is released into the P2P arena.

        If it's the CD rip that eventually gets on the networks or the iTunes. If they had a simple watermark at the end of the song that would show up in the resulting encodings and be detected they could track which method is actually contributing to piracy. If people who are more likely to purchase a CD and rip it to serve on the file sharing networks or if it's the iTunes users that serve it up. With a couple hundred songs marked and tracked that'd be compelling data either way.

        In any case all it takes is one person to borrow/buy/steal/download a track and serve it up.

        It makes a lot more sense to make it cheap enough and easy enough to get a song that illegally downloading it is not benificial. Not threatening them with vague lawsuites that people really don't care about. And not DRM crap that makes it better to download it illegally to use on the multitude of products out there being marketed by the same companies that restrict the customers ability to use them (cough-sony-cough).

        If there were a service that let people pay a small price for music by the track in a high quality standardized format and allowed them to do whatever they wanted with it without any draconian DRM restrictions, it would be an alternative that would capture the majority of the market share overnight. And at the same time would make the p2p networks that much less attractive.
        (didn't hear it from me, allofmp3)

        It's not something new, but needs to be said again to these execs: Basic economics 101, if you offer an easier product at a cheaper price without a significant quality drop you will make more money in volume than your competitors.

        The competitors in this case are virus ridden, illegal, spotty selection, gun to the head, can go away at any time, P2P networks.

        You hear that RIAA? You could make millions happy, rake in billions of dollars in sales, have more volume with significantly less overhead and 3rd party costs. All you have to do is look at the market and act like business people and fulfill the obvious need.
        • The first point you made is very interesting - using a detectable 'watermark' (or some other scheme) to determine which format is pirated more readily - is just the type of thing I know I would do. It would provide a useful metric for determining prudent business decisions in a changing marketplace with new dynamics.

          A good businessman would then weigh those results with the rest of the reliably collected demographic, technical, and marketing data so as to make a competitive, profitable decisions.

          Ah, who am
          • I dont think there is a need for a watermark. Just go to newzbin, and you can see that more albums are available to the public than individual tracks. Most media types will go through a release on usenet or bittorrent before they hit music networks.
    • It's the Slashdot summary (surprise, surprise) that makes the conclusion "iTunes Sales Ban Does Increase CD Sales". The article itself is titled "Labels Halt Downloads to Increase CD Sales" which just means that labels are trying to increase CD sales by halting downloads.
  • That is not a correct scientific method they using to measure it.
  • by zubinjdalal (816389) on Thursday March 09, 2006 @05:52PM (#14886117)
    ... people turn to newspapers after leading news agencies refuse to publish new content and breaking news on their websites.
  • Oh, yeah... (Score:5, Funny)

    by tool462 (677306) on Thursday March 09, 2006 @05:53PM (#14886120)
    Nothing more statistically meaningful than a single data point! Their powers of extrapolation are mind boggling!
  • by tehwebguy (860335) on Thursday March 09, 2006 @05:54PM (#14886128) Homepage
    now that we've compared 2 artists we finally know the truth about music consumer habits!
  • by Radi-0-head (261712) on Thursday March 09, 2006 @05:55PM (#14886139)
    And why should anyone care?
  • by swschrad (312009) on Thursday March 09, 2006 @05:56PM (#14886140) Homepage Journal
    hey, folks, it's epiphany time! -- the default physical medium for music sales has changed. it isn't Edison cylinders, Brunswick 77s (all "78" record makers used a different speed), 3-3/4 IPS 4-track tapes, or CDs, it's become electronic transfer.

    selling CDs promotes ripping without any content copy-limiting software system. if the pinheads in Big Music had their schytte together, they'd stop shipping physical media, and sell it all online through iTunes and the like.

    but all they have together is their off-key whining....
    • by Anonymous Coward
      The answer: even though legal online music is DRMed, the labels and RIAA do not look kindly on iTunes or other online distrubution precisely because they would lose control of distrubution. They love control, they sleep with control, they make sweet anal love with control when things go their way, control is within and without them. They can't think of having it any other way. In fact, they have a very hard time thinking that technology hasn't progressed since the 50's.

      With online distributors, they lose
    • Environmentally friendly, too.
  • by 10101001011 (744876) on Thursday March 09, 2006 @06:02PM (#14886207) Homepage
    In scientific tests, one can take a solution, mix it in another solution, and observe the results. Then one can make a single change keeping all other variables identical and perform the same tests. Those results are (arguably), if not valid, then at least a decent indication of a pattern. This summary (and I presume the article?) attempts to use this methodology with music artists -- something that by its very definition stands itself apart from science. Just because one individual's CD sells a certain number of copies through one venue, while another does comparatively poorer through another does not mean that the results are valid.

    First you are taking one individual CD's sales through a store and comparing them to another CD's sales through an online distribution. While this test is almost impossible to perform (release the song at the same time through both channels and see the online distribution win and people would say that it simply hurt the CD sales, or alternatively, vice versa), it might have been a better comparison to simply take one popular artist's newer album, release it exclusively online and compare it with previous releases. Even this is not an indestructable argument, but at least you would be comparing Granny Smiths to Red Delicious, and not fruits to vegetables.

    Now I am by no means a scientific person (having a greater interest in history) but it astounds me (through every century) when one side tries to sound scientific by saying, look! ho! this way works better and one can see it conclusively because the stars are in the sky and not in the ocean! This was pretty much a complete red herring of an article.
  • Interesting quote... (Score:5, Interesting)

    by addbo (165128) on Thursday March 09, 2006 @06:03PM (#14886213)
    "If you're buying a Picasso," he continued, "you can't just buy the upper right-hand corner."

    This is a weird analogy... if I buy a single song... that's not like buying the upper right hand corner of a Picasso (though with some of Picasso's work I might enjoy it more). It's just like buying a single painting... you select the one you prefer and purchase it. You don't need to buy the whole body of work that an artist produces to appreciate the artist... a song I would equate to a single painting... meanwhile an album is just multiple paintings by the same artist.

    At a buck a download... wouldn't they make more off of the album than at the 8 dollars they are selling the thing at Target for? How much does it cost to produce and distribute these CD's to each of the retail chains? How many of those CD's that are produced are in fact sold? So how many just sit on the shelves forever? Or... if you don't produce enough to meet demand... how much money have you lost opportunity costs?

    Digital just seems so much more efficient... and this robbing peter to pay paul is silly... yes if you only sell a track in a single medium... of course the volume will rise for that medium... but in the end are you making more money or less? (Say you sold 300,000 tracks on iTunes... cost/benefit?)

    Digital uptake is just ramping... if they start doing silly things like this to make it harder for consumers to get their content... either they'll go back to piracy... or it'll stop the whole legal digital distribution before it's even had a chance to become mainstream.
    • At a buck a download... wouldn't they make more off of the album than at the 8 dollars they are selling the thing at Target for?

      Not if there is really only one song worth purchasing on the whole album. I've purchased several albums like that.
    • by e4g4 (533831)
      Excellent point. I do think, however, that Mr. Brummel's analogy is apt - in some circumstances. Take, for example, Sgt. Peppers Lonely Heart's Club Band (by the Beatles). As an album, it was quite popular (don't have any specific numbers), and yet, not a single song on the album hit the Billboard Chart #1 spot. The reason for that, IMO, is that the album was a complete work - the individual pieces did not make much sense. The same can be said for Dark Side of the Moon (whether or not you play it over
      • the individual pieces did not make much sense. The same can be said for Dark Side of the Moon

        "Money" would stand alone quite well, if it didn't segue directly into the next track.
    • When the whole album is one track and one contiguous work, or is themed in such a way as to make it one work (i.e. the Beatles' Sgt. Pepper's or Pink Floyd's the Wall), then one could argue that it is one work and should be sold as a unit, maybe.

      When there is no correlation between the songs, especially when the song order was chosen by a record company executive, and some songs are just used as filler to make the collection CD length, then this argument is not valid.

      Artists know how to create larger contig
    • "If you're buying a Picasso," he continued, "you can't just buy the upper right-hand corner."

      agreed that this analogy breaks down in a big way .. having an original painting is quite different than a digital reproduction. really with music you're getting captured performance art and with replay - it's ultimately designed to be cut, remixed, dubbed over, etc.

      however:

      At a buck a download... wouldn't they make more off of the album than at the 8 dollars they are selling the thing at Target for? How much does
  • by Bombula (670389) on Thursday March 09, 2006 @06:04PM (#14886224)
    This is quite a particular instance, and it is probably reckless to draw sweeping conclusions from it. As I understand it, the broader statistical data show quite clearly that sales of CDs, as well as overall music sales, have steadily increased during the same period that P2P file sharing appeared and became widespread (even after correcting for inflation and overall economic growth).

    It therefore seems hard to argue that file sharing and digital distribution has a negative affect on music sales.

  • by l33t-gu3lph1t3 (567059) <arch_angel16.hotmail@com> on Thursday March 09, 2006 @06:04PM (#14886225) Homepage
    The only possible conclusion you can get out of this is "customers don't buy the same product twice".
  • by twifosp (532320) on Thursday March 09, 2006 @06:07PM (#14886252)
    So two different CDS with two different audiences, with two different marketing strategies, had two different outcomes? DUH?

    This fails so many statistical tests for process control and would never even be eligible for something like an Annova (test for statistical difference) tukey-kramer test. They find one demographic of people, internet buyers. Split them in two. Offer the download to 33% of the group, deny the download to 33% of the group, and let the other 33% have the choice to steal/buy online/buy the cd ect. All the while exposing them to the exact same marketing, radio singles, and ensuring their purchasing habbits are the same. Only then can you even begin to test which group is statistically more likely to alter their purchasing habbits.

    In other words, doing all of the above is hard and takes time and just coming up with bogus conclusions is so much easier.

    I can't wait until the RIAA gets so much control over the music industry that they legally charge each user every time they listen to the song. Hell, they'll charge the user 1 cent per second the song is played. It wouldn't be fair to pay the same price for a 2 minute song and a 4 minute song would it?

    When that day happens, and it looks like it might, the RIAA will finally implode and independant music will return in a blaze of glory. Or be outlawed as a potential communication medium for terrorists. One of the two anyway.

  • by tfcdesign (667499) on Thursday March 09, 2006 @06:09PM (#14886269) Journal
    CDs are easier to pirate than DRM protected iTMS songs. At least at the same quality.
  • try this (Score:5, Informative)

    by troll -1 (956834) on Thursday March 09, 2006 @06:10PM (#14886273)
    Search online [gnutelliums.com] before you rush out and drive 15 miles in your SUV to get that latest CD.

    Message to the music industry:

    The horse and buggy distro system of funny plastic disks has been superceded by an Internet. Tune in or drop out.
    • The horse and buggy distro system of funny plastic disks has been superceded by an Internet. Tune in or drop out.

      Correction. The horse and buggy distro system of people paying for a CD with liner notes has been superseded by people leeching MP3s off torrent sites for free. There's no way any label or artist can compete with that.
      • The horse and buggy distro system of people paying for a CD with liner notes has been superseded by people leeching MP3s off torrent sites for free. There's no way any label or artist can compete with that.

        Indeed. What they can do, however, is adapt to it by getting out of the business of selling copies of bits, and stick to the core business of actually writing and performing music, by insisting on getting paid for the time they put into it, rather than getting a little tiny payment for each copy sold. New
  • Shocker (Score:5, Insightful)

    by Cyberllama (113628) on Thursday March 09, 2006 @06:10PM (#14886282)
    You mean when a band puts out a cd with one good song and a pile of crap that cd sales are higher when people are forced to buy the entire cd to get the one worthwhile song than when they can simply buy that song alone.

    The real story here is not "Itunes hurts cd sales" its "Itunes promotes better music". The a-la-carte style of music downloading that itunes offers punishes crappy cds for sucking and rewards good ones for being good.
  • Most likely, the best way to maximize profits is to stagger the releases. Just like movies released in the theater first, then on DVD. You'll always get some people who will buy both. If you release them both at the same time, you'll get less people buying both.

    The big question is, which would maximize profits more? Selling the digital download first, or the CD first? I suspect it would depend on the audience for the given artist. For pop music with a young audience, I would not be at all surprised to find
  • by Slipgrid (938571) on Thursday March 09, 2006 @06:17PM (#14886328) Homepage Journal
    Here's my dilemma. I like music and I like my computer. I used to like CD's, but I like my computer more than I like CD's. I don't like the mixed-bag-of-root-kits-and-DRM that CD's want to put on my computer, so I don't buy them. I also don't like the DRM from iTunes, but at least from them I know what I'm getting. But, I've never bought from iTunes. So, where should I buy my music? The answer is, I don't buy it at all. I would pay for it. I want to pay for it. I used to pay for it. But, I don't like my toys to be broken by greedy strangers... Ok, extremely wealthy and greedy strangers. So, now, I still get my music, and I don't pay. If the record companies still sold a product that wasn't broken, or a risk, I'd like to pay them, or better yet the artist, for the music. But they are not offering something I'm comfortable with, so they get none.
    • So, where should I buy my music? The answer is, I don't buy it at all. I would pay for it. I want to pay for it. I used to pay for it. But, I don't like my toys to be broken by greedy strangers...

      I'm in the same boat. Well, I used to be in the same boat.

      The last time that Slashdot ran a story like this, I activated a free trial of eMusic. I strongly suspect that when the trial is over, eMusic will not get a cancellation notice, that eMusic will get ~$190 to pay for 90 mp3s/month for 12 months, and that I
  • by Anonymous Coward
    What I find quite interesting is that no one is bringing up the real news here, in that what this article is pointing out is that iTunes/Raps needs to have an option to only allow buying the entire album, and not just the individual song. The actual CD has nothing to do with it. The overall concept would be that on initial release, only the entire album can be bought for the first 5 weeks. After this, individual songs can be purchased.

    Why dont they have this now??? It is because iTunes is about selling
  • I don't get it. (Score:3, Insightful)

    by jcostantino (585892) on Thursday March 09, 2006 @06:26PM (#14886411) Homepage
    They're proud of selling a CD for $8 at Target with all the costs of shipping, printing, materials, markups, etc... instead of selling it for $9.99 on ITMS where it's (from what I recall seeing, I could be wrong) 90% profit for the publisher?

    I don't get it...

  • there's nothing like advertising with other people's wrong-doing, is there?

    now "piracy estimates" are used to push business models... is this madness never going to end? let's all just agree that the collective conscience owes the music industry 1 quintillion dollars and be done with it.

    "stealing" copyrighted material is wrong, pushing people into "law-circumvention" is too, suing them for ridiculous amounts of money certainly is. let's all just switch to legal (mostly not well produced) music and hope it'l
  • by ursabear (818651) on Thursday March 09, 2006 @06:28PM (#14886428) Homepage Journal
    Stick with me on this for a minute:

    If my family wants to see Harry Potter [insert episode here] at the movie theater, we'll go see it so we can have a blast sitting in the dark listening to the overly-amped up sound and get a fun thrill from the big screen.

    However, if the DVD were available at the same time, we'd still go to the theater to do the family thing, then buy the DVD if we liked it.

    Means this: we go to the theaters to see the things in which we are interested - irrespective of DVD availability. We then wait with anticipation for the DVD for a release (and generally buy it on the day it is released) if we really liked the film. What I'm trying to say is, if we like it enough to patronize the film, we'll see it several times.

    Enter the music industry: The industry is trying to figure out how to stay in business, and along the way, they're forgetting something critical: the fans. If the fans like it, the ones who pay for music will buy it (and some of us will buy the CD if we want to support the musician(s)). Those that don't buy music probably won't buy the downloads or the CDs.

    Key point: If the artist makes the fans happy, they'll buy whatever makes the fan happy (CD or individual download). Preventing one of the means of purchasing is not helping the artist or the label. Truthfully, (this is a personal opinion, folks) if I really like a given artist, I'll buy the CD - even if there are some tunes to which I won't listen - so I can patronize the artist. If I like one tune of a given artist - but the artist doesn't generally float my boat, then I'll download the one tune and not buy the CD.

    Cutting off means of distribution is not a smart business tactic.
  • ...an n=1 for a good statistical correlation. This is statistically meaningless you cannot establish a trend with one sample.
  • by Kelz (611260) on Thursday March 09, 2006 @06:31PM (#14886463)
    Maybe they didn't consider the fact that maybe people liked one song/album better than the other?! Tomorrow in the news: Sales of online-ordered giant broccoli stumps plummeted today whilst store-bought beer flourished. Is this the end of online-ordering?!
    • Oddly, I can find no record of BroccoliStumps.com. I was sure someone would have tried that at around the same time as pets.com. In fact I could imagine it coming from the same people.
  • Missing numbers... (Score:5, Insightful)

    by drew (2081) on Thursday March 09, 2006 @06:33PM (#14886485) Homepage
    Regardless of one's ability to draw meaningful conclusions from one datapoint, they also left out another key figure.

    Ne-Yo's CD In My Own Words sold 301,000 copies using this method. Chris Brown's Run It, that was in the itunes store, sold 154,000 copies in its first week. Ne-Yo's So Sick was downloaded approximately 3.4 million times on the peer to peer networks during the week of his album release while the album Run It! was downloaded approximately 5.3 million times in the same release period.

    OK, so how many downloads from "Run It" were sold in the ITunes store during that time period? If it was only about 50-100K songs, then they may have a point, but if it was something along the lines of 500K songs, then all they did was to give up some profits on CDs to make the same money on downloads. So, yeah, Duh, people are going to buy less CDs if they have the option to buy a CD or buy from iTunes than they will if they only have the choice to buy CDs.

    It's like a deli that sells both ham and roast beef sandwiches complaining that they don't sell as many ham sandwiches as the deli down the street that only sells ham sandwiches. Big deal...
  • by fermion (181285) on Thursday March 09, 2006 @06:33PM (#14886489) Homepage Journal
    I see this kind of like the fast food value meals. A customer can either buy an individual item, or for more, but less than the seperate items, the customer. The fast food stores implement these schemes to, among other things, increase the average order price. This then begs the question of why fast food stores don't implement a value meal only policy? Sure, some customers would be lost, but the price of a hamburger probably barely covers costs.

    This attempt by the labels to push albums is nothing new. The last time we saw, which was only several years ago, was when they were trying to stop the sales of singles. The singles were cutting into sales of albums, and the theory was that if singles were not available, then the consumer would be more likely to buy an album.

    I think the more likely aspect is the key. Wiithout singles, one might be more likley to record a song from the radio or just copy it from a freind. Even then there were albums that are so bad no one wanted anything but the same album. Not even the b-side was worht anything. With singles it was more likely all parties would be compensted for the product the consumer wants, and if we dig our heads of the artistic bigotry, when one is talking about selling a million albums, we are fundementally talking about providing a product that the student wants.

    So, when singles were pulled, it was a statement that the labels would tolerate more copying in the hope they would end up with increased overall profits, even if the formula used to calculate royalties meant the perfomers and other parties recieved less. I wonder if this algebra will work out in the current climate of rampant unlicensed distribution of any hit track, not to mention much more sophiticated distribution channels for used albums. Frankly there have been way too many times lately when I have gone to iTunes hopeing to legally acquire a track, only to find it unavailable or only as an album. If it is an older album, I can get it used for much less than iTunes. If it is a new album, I soon will be able to get it used. Does this help the company bottom line?

    Back to the original question. If the fast food joint only offered value meals, then a person with only a burger would cause a great deal of havok at the unfairness of the situation, disrupting bussiness. And such a person would have a point. The burger is seperate, you could sell it seperately, but you choose not to. It is simply not worth the effort, despite the clear benifits.

  • every single track that you are worried about is available for free whether you want it to be or not

    From the industry's standpoint, every single in your rental collection is available for free, because there is no downloading charge. They get the same amount of revenue if the customers download their track or not. If they delay release on your platform and force people to buy the CD instead, they have gained extra money.
  • Poor summary (Score:2, Insightful)

    by dilby (725275)
    Seems to me the issue here is not about delaying the release of songs on itunes increasing cd sales but not releasing songs as singles increasing album sales. The fact that the song wasn't released on itunes etc was only due to the record company wanting to bundle the song with the rest of the album, because surprise, surprise they make more money.

    It looks to me like the record companies took a page from Microsoft's book.
  • by mgkimsal2 (200677) on Thursday March 09, 2006 @06:46PM (#14886617) Homepage
    There seemed to be nothing in the article about selling physical singles. The choice is selling singles online, or promoting a single on the radio and only selling a full physical CD. Where's the middle ground? Record companies have been bitching about sales going down, but have made it harder to get the songs they promote. Hint - offering it in more formats (physical and digital) will increase sales.
  • by Jackie_Chan_Fan (730745) on Thursday March 09, 2006 @06:49PM (#14886640)
    Keep it up RIAA. You're going to lose this one :)
    • Of course they are. They can't compete with free.

      I recently had a discussion with a relative about her wanting to get some music off the net. I linked her to iTunes and Yahoo's music subscription service (ranting about DRM aside, it's what she wants; shitloads of music). She gave up in the end and just said she wanted free stuff like she used to get off Kazaa.

      You cannot compete with that. If you tell most teenagers that they'd be better off paying for downloads, they'll look at you funny, laugh their asses
  • by bill_kress (99356) on Thursday March 09, 2006 @06:55PM (#14886704)
    When the DS was unavailable a couple years a go it sold like hotcakes, same with xbox360 this year. Special colors (my wife wants a Pink DS) are only released in small quantities and therefore are highly desired.

    Making people listen to a song on the radio without making it available for purchase means that it will hit the charts hard when it does release. Is there anyone who could possibly be surprised by this?
  • by Dalroth (85450) on Thursday March 09, 2006 @07:03PM (#14886770) Homepage Journal
    Repeat after me... Correlation is NOT causation!

    Thank you,
    Bryan
    • Post hoc ergo propter hoc.

      Apples != Oranges

      You can't compare an album by one artist to another album by another artist. What if the guy who sold fewer copies just sucks more? One album by one artist is not a control group.
  • There are usually only two or three songs that sell an album. Price of an album: $12-$18 Price of three iTunes: $2.97 If execs can force people to buy their three good songs for $12-$18, why would they want to break the album into pieces and only sell the good stuff at a much reduced profit?
    • What is the label's profit on each?

      The major labels pocket about 55 cents per dollar sold on iTunes, with minimal overhead. CDs have the additional costs of printing, distributing, and "breakage", as well as the reseller's cut. It looks like $1.70 [nosleep.ca] per CD is "label profit". (Though it also appears that they pocket a total of $7.00 per CD which includes money for "label overhead" and "marketing/promotion".)
    • Well you know, they can force iTunes to sell the whole album only. A friend gave me a free iTunes download a couple of weeks ago. I spent quite a bit of time picking out a song to download. Had it picked out and tried to buy it, only I couldn't because the stupid thing was only available if you purchased the whole album.

      What the crap? The whole point of iTunes is to get only the songs you want. Leave it to somebody to screw that up!

      Heck, if they want to play that game, I'll wait for it to come out in BMG's
  • by GoNINzo (32266) <GoNINzo@nOSpaM.yahoo.com> on Thursday March 09, 2006 @07:54PM (#14887138) Journal
    Ne-Yo's CD In My Own Words sold 301,000 copies using this method. Chris Brown's Run It, that was in the itunes store, sold 154,000 copies in its first week. Ne-Yo's So Sick was downloaded approximately 3.4 million times on the peer to peer networks during the week of his album release while the album Run It! was downloaded approximately 5.3 million times in the same release period.

    Let's take that arguement for a second. Ne-Yo now has around 3.7 million people with an interest in his music, while Chris Brown has around 5.4 million people interested in his music. Because artists don't make much money off cd sales, they make it on people showing up to concerts and other options they have. So who is in a more actionable position? And how much money does the artist get from an itunes album sale versus a physical sale?

    I can see why the RIAA is getting upset though. The artists might actually make a buck and not need a monopoly pushing their product.

  • Wait, Wait (Score:3, Interesting)

    by Zebra_X (13249) on Thursday March 09, 2006 @08:05PM (#14887210)
    But if the industry determines that restricting digital sales pays off with bigger album sales, fans may soon find the instant gratification of snapping up new songs online becoming a little less instant.

    Ummm bigger album sales? Digital or CD, the record companies are still selling the same damn thing. Thus it shouldn't make much of a difference if the music is sold online or otherwise.

    However, if this becomes widely practiced then it begs the question of "why are cd sales preferred by the record companies?" the answer would lie in the gross profit margin. One would think that digital delivery would be cheaper as the distribution channels are "virtual" and that there are no materials involved. If cd's are preferred then cd's might have a higher margin than the downloads. Then it makes us wonder why cd's cost so much in the first place.

    Hopefully this will provide more fodder for the case against the record companies and allegations of price fixing.
  • Can you imagine if this logic had been used 10 (or so) years ago.

    Record Artist to record label: Oh and by the way I do not want my newest album on this new format... what is it called... VD?.... LSD.... oh yea... CD... what ever it is I do not want anything to hurt my album sales.

    ----
    iTunes is not the enemy. It is simply another delivery device to get your product to your customers. If someone buys a CD... you get money... if someone buys that same CD from iTunes.... guess what.... you get money. A
  • Ne-Yo
    http://www.amazon.com/gp/product/B000EGCVK2/103-42 41130-8103063?v=glance [amazon.com]

    Chris Brown
    http://www.amazon.com/gp/product/B000B0WOHG/103-42 41130-8103063?v=glance [amazon.com]

    Perhaps this has little to do with the low sales, but I'm sure not being on Amazon count for something.
  • by aquarian (134728) on Thursday March 09, 2006 @08:59PM (#14887602)
    Focusing on sales is misleading. How much money is really being made? CD sales are higher because of higher prices for CDs, but what about the costs of producing, shipping, storing, and selling them? How much is left as profit? It seems to me digital distribution would be more profitable, because of lower costs. The main problem with it is there are still more retail consumers than online ones.
  • I know they've missed out on a few sales from me for just this reason. Just a few weeks ago I heard a song I liked on Scrubs, Googled the lyrics to figure out the title, and went on iTunes to purchase it that very night.

    I'd have to purchase a whole album with songs I already own (it was apparently only available on a movie soundtrack)? No thanks.

    Alex.
  • Labels know damn well that the target audience for hip-hop and R&B is America's young, black audience, a group that predominately isn't as connected to MP3 downloading as white kids. iPod proliferation has shortened the gap between audiences, but I'll wait until this sort of statistic is done on a TRL-beloved rock group before I make a connection about anything more than how hot an R&B artist is.
  • Sick of the Song (Score:2, Insightful)

    by PBPanther (47660)
    Another factor that is not mentioned in this set of statistics is how long before the song was released people started hearing it on the radio.

    If the song is played for weeks on the radio before it is released then people are sick of it. This seems to happen with so many new singles these days, especially from the big names. They are hyped and hyped and played and played to death so much that no one wants them by the time they are released.
  • You can't make any conclusions based on two data points ffs. 2000 perhaps. 20,000, and I'll have some respect for the conclusion.

Factorials were someone's attempt to make math LOOK exciting.

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