Broadband takeup hits Aust music business

Australia's peak record industry body has cited the rapid uptake of broadband as one of the reasons for a decline in music sales in 2004.

The Australian Record Industry Association's (ARIA) chief executive officer, Stephen Peach, said the increased penetration of broadband meant more people now had access to a technology that facilitated the illegal downloading of music files. This, in turn, impacted on demand for paid music.

"What we've noticed is a similar pattern with that of overseas markets," Peach said. "As broadband penetration starts to increase, you start to see a decline in the market. That experience is seen in a number of markets like in the US in the last few years.

"When we looked at the Australian [situation], most Internet access 12 to 18 months ago was via dial up accounts. Twelve months later, no-one advertises dial up anymore. We know that broadband facilitates the illegal downloading of copyright material far more than dial-up, so it is no great surprise that we see this decline happening," Peach told ZDNet Australia.

A recently-released report by ARIA said the wholesale market for recorded music for the year ended December 2004 showed a continuation of the downward trend, in both value and volume, initially identified in mid-2004. Overall wholesale recorded music sales --including albums, singles and DVDs-- were down almost 4 percent by volume to 63.1 million units and the overall value fell by 6 percent to AU$607 million.

However, Peach cautioned against attributing the full decline to online piracy. "It is very hard to quantify the effect of online piracy on music sales. There are other legitimate competition for the consumer's dollar. We'd say that online piracy is a significant contributor but it would be impossible to quantify until we do detailed research".

ARIA's report cited other reasons for the decline in music sales, including the rise of "competitive entertainment products including new technology such as digital music carriers, advanced mobile telephones and non-music DVD."

Peach added although higher broadband availability increases the rate of illegal music downloads, it is also essential to the industry's legal music download strategy.

"We hope to see in 2005 some of those legal music download sites kick in. There are rumours of iTunes Australia launching this year but it's hard to know because they won't say why it is taking so long. Broadband is the key to the success of any of these online services," Peach said.

Despite last year's difficulties, ARIA said it remains optimistic about the coming year.

The report said in 2004 there was a ten-fold increase in the global market for legitimate digital music downloads -- "a trend that the industry anticipates will start to be replicated locally during 2005".

"Whilst the online services currently operating in Australia have yet to break through in the same way that they have overseas, the industry is encouraged by the overseas results during 2004 and looks forward to similar success locally during 2005," the report said.

ARIA also cited as a positive for the industry the heightened availability of 3G mobile phone services in Australia this year. This, ARIA said, will "create growth in downloads of both full recordings as well as master tones -- ring tones made from the actual studio recording-- direct to mobile phones, together with the streaming of full-length audio and video."

"The industry's continued commitment to the ongoing fight against online and offline piracy demonstrates that it is determined to create and entrench an environment where legitimate download services and the physical recorded music market can grow and prosper," the report said.

Talkback

The music industry claims that less music is being bought each year because of online piracy, and produce graphs to support their claim.

How about the music industry also produces a graph of the amount of new music and artists being released each year, and then overlay the two.

My contention is that there is less and less new music and artists being released each year, and THAT is the real reason for declining sales - less product for the consumer to buy.

AnonymousAnonymous March 21st, 2005
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They continue to blame everyone but themselves for their own failures, and this will ultimately lead to more failures on their behalf.

If you don't acknowledge it, you are not fixing it; and if you are not fixing it, you are blaming something other than the real cause of your woe and thats a heck of a gamble with a business as large as the music business.

This all sounds like deja vu though - the music industry has chosen its mantra and is sticking with it, no matter what (or how wrong and flawed).

I hardly think anyone will be sorry if the big business side of the music industry suffers, as big business and bean counters making music decisions are what lead them to this situation in the first place.

The only sound that makes such people smile is the sound of a busy cash register.

AnonymousAnonymous March 21st, 2005
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The music industry has itself to blame for the decline. Music is too expensive and the quality of the music comming out today IMO is terrible at best.

If they want more sales, how about lowering the price and putting some decent tunes on CDs instead of the crap we got now.

AnonymousAnonymous March 21st, 2005
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I agree with Anonymous.
Not only that, but the volume of totally unworthy artists (read no talent popstars/idols etc) and 'artists' (and I uses the word as loosely as it gets) such as JLO.. Music?? I'd prefer listening to the dulcet tones of a cat being strangled or fingernails on a chalkboard.
I will not buy CD's for one song that I like. I will not buy downloads that are sub-CD quality and don't let me do what I want with my music.
Maybe for ONCE, instead of blaming other, they should take a good hard look at themselves..

AnonymousAnonymous March 21st, 2005
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Piracy not the burning issue in CD sales slide: ARIA -http://www.theage.com.au/articles/2003/01/28/1043534039320.html?oneclick=true


Rather than moaning how music consumers are readily taking up new technology; why doesnt ARIA help artists to take advantage of broadband delivery of new material!

AnonymousAnonymous March 21st, 2005
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Try to get same out of print singles and songs
pay deposit and so on cound not get it SO AFTER WAITING 12 MONTHS I D/L THEM FROM INTERNET IN 1 DAY THATS WHY SALES ARE DOWN NOT BECOUSE PEOPLE DONT WANT TO BUY

IF YOU TRY TO SELL CRAP AND PEOPLE DONT BUY IT WHOS FAULT IS IT
Not people YOURS

AnonymousAnonymous March 21st, 2005
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It's NOT Rocket Science A.R.I.A., STOP BEING GREEDY!
Don't you stupid, greedy, fast-buck, short-sighted idiots at A.R.I.A. get it?
If you were to price your product so that 85% of the Australian Population can afford it, doesn't that mean that 85% of 20,000,000 = 17,000,000 potential customers?
Well its a sad fact of life A.R.I.A., that only 3,000,000 or 15% of the Australian Population as it stands today, earn in excess of $21,000.00 a year. You see A.R.I.A., the problem is that greedy corporate opulence including yours results in GREEDY IDIOTS being paid $$$,000,000.00 dollar salaries and platinum handshakes, most times lately, after bringing public corporations to ruination, and THIS BOOSTS UP THE AVERAGES DRAMATICALLY. The current howard government quotes the Average Australian wage as very close to $930 a week. That's over $48,000.00 a year!This is in DIRECT CONTRADICTION OF THE FACTS!
I Digress...
You do the sums A.R.I.A., if you say drop the prices on your album products from their current levels down to say $10.00, thereby making the product affordable to a potential market of 17,000,000 people, and if like me, they will then be able to afford to buy some new music every week, that works out to a best case scenario of over 8.8 BILLION Dollars turnover per annum, compared to the 15% or 3,000,000 potential market that can afford to pay your current average album price of $29.00. Your current actual case scenario works out to only $660,000,000.00.
Like I sead A.R.I.A., its NOT ROCKET SCIENCE!

AnonymousAnonymous March 21st, 2005
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Most of the music today is crap anyway. Who would wana buy it.

AnonymousAnonymous March 21st, 2005
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Most of the music today is crap anyway. Who would wana buy it.

AnonymousAnonymous March 21st, 2005
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New release dvd's are $15, while cd's remain at $30. ARIA is right that copyright infringement is not the main reason for declining sales. People are simply spending their discretionary dollars elsewhere. ARIA & music industry response to this is more press releases. wake up music industry dinosaurs.

AnonymousAnonymous March 21st, 2005
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How about "The problem is we're making s**t music, and charging too much for it. Frankly, I'm surprised we can sell any of it. I suppose we can't complain too much though .. we have managed to get away with it for so long, and I and all my friends are now well and truly loaded at the expense of struggling musicians everywhere."

AnonymousAnonymous March 21st, 2005
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MAYBE ITS THE PRICE OF A CD THAT STOPS PEOPLE BUYING THEM.......

I BUY 1-2 CD'S A MONTH BECAUSE THERE TOO EXPENSIVE.
LETS SAY AT A AVERAGE PRICE OF $23-25 EACH THATS ABOUT $50 FOR 2


IF THEY WERE 12-15 DOLLARS ID BUY MORE.
AT THE LOWER PRICE ID GET 3-4 CD'S INSTEAD HENCE THEN MAYBE ID SPEND MORE I MIGHT THEN FORK OUT $100 A MONTH SO I CAN GET 7-8 CD'S

BUT AT CURRENT PRICES I DON'T THINK ITS WORTH SPENDING $100 FOR 4 CD'S

AnonymousAnonymous March 22nd, 2005
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The ARIA needs to adjust it's aging gl****es, and realise it's their OWN fault sales are down. The majority of music being released of late is absolutely appaling, and of the slim amount that isn't costs up to $30!!

I can't wait for the iTunes Music Store to come to Australia, then we shall be able to get resonably priced music, without all the silly rights management issues Windows Media sources impose on us.

AnonymousAnonymous March 22nd, 2005
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ARIA seems to have forgotten to mention that they also released 40000 less singles and albums for the same period. Which would account for the drop in sales. Information from JJJ's Hack at 5.30 pm weekdays.

AnonymousAnonymous March 22nd, 2005
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Another thing, as well as the 40000 less CDs being released. The big 4 recording companies are dropping artist like crazy. These artist as being forced togo independant. Which ARIA doesn't take into account with their stats. Yes, the quality does suck. But the problem has nothing todo with downloading. Its todo with less music being released and that informaton not being taken into account. Again, form JJJ's hack.

AnonymousAnonymous March 22nd, 2005
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I haven't bought a new music CD for at least two years now... why? Simply because I'd rather spend my money buying a DVD movie than an audio CD - and really, I've got pretty much no interest in the latest bands these days. I have bought some second hand CD's of old albums though...

AnonymousAnonymous March 22nd, 2005
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Import CD's cost less. I have downloaded heaps of stuff from Kazaa etc which I play on my computer, but really, who are we trying to kid, mp3's are no where near the cd quality if you want great sounding music on your hifi so I import the stuff I like.
As far as buying legit downloads which are restricted use......WTF!!! Why should I pay $1.50+ a track when I get no hard copy, no cover art, notes, etc.
And now the record industry puts out these digipacks because they cost less to produce than a hard plastic cd case!!!
I buy from Amazon.com Towerrecords.com and others, and generally get my cd's for around $15-20 Australian, with all costs included, even shipping!!! Why is it so?
Also why do US record companies put new releases out cheap? Also why cant we have a record club here that sells us 10 cd's for $1, provided we buy 3 more cd's over the next 12 months at regular price? MONEY AND GREED MY FRIENDS!!!

AnonymousAnonymous March 22nd, 2005
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At least they've stopped blaming only online downloading for the decline in music sales. There's a whole lot of factors at work, including the fact that CD sales have been abnormally high for a while because people were upgrading to the new technology.

As has been said, the price is largely to blame. The amount of money the labels make from CDs is obscene - and don't give me any guff about promoting new artists or anything like that. The truth is they've been gouging both consumers and artists for decades, and now they have to stop.

Why is music piracy so high in Mexico? Because a CD costs 300 pesos - around AU$50 depending on the exchange rate. If they could get iTunes, which sells songs for around 10 pesos so a full CD would cost just 80, most people here would buy legal music.

AnonymousAnonymous March 22nd, 2005
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death to the music industries. I am a big music fan. Music is one of the biggest things in my life. These very few large monopolies should not be allowed to monopolise music. These fat cats geting rich while the artists get next to FA. and really, a true artist should be more concerned about geting their music, and bringing out new tunes to enrich peoples lives. I am a musician in a band, sure we are not big, and not on any label, but if i created music id be happy for people to pirate it.

In my mind piracy probably helps sell music. Think about it, free advertising. You might not have ever heard of a band and dont like them. Then you get a copy from your mate (which you wouldnt have bought yourself), then you like the band and you might buy their other cd's, you might buy band merchandise and go to their gigs.

Another point, the cost of blank CD's has decreased dramatically, yet music CD's havent dropped in price. Wheres the saving gone to? not to the consumer, to the artist? i doubt it, to the fat executives.

AnonymousAnonymous March 22nd, 2005
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I'd be really happy to see ARIA going off to WORK finally. It's ridiculus what they charge for a 50c CD in those shops. And they living off the backs of those gullible enough to buy these overpriced discs. Let them die.

AnonymousAnonymous March 23rd, 2005
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With so much music distributed on CD being of low-fi (syn. 128MP3) quality or worse - due to muddy mixes and excessive low/hig frequency boost: it is no wonder that MP3's, which are essentially the current c****ette-tape sonic equivalent are so popular.

That ARIAA does not promote high quality audio/video (such as SACD) in local music stores only confirms the lust for revenue is more important than quality product which cannot be easily copied.

AnonymousAnonymous March 23rd, 2005
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Did they ever stop to consider the quality of their wares. The manufactured sound, over marketing and finally the radio killing it by playing it too much. Also cometition from Mobiles, and Video games for the consumers $$$

AnonymousAnonymous March 25th, 2005
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Dumb**** music industry, check your prices you fools!

AnonymousAnonymous March 28th, 2005
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Come on fess up, the real reason that people illegally download music is because it's free and there's very little chance of getting caught.

The argument that the Music business is greedy and prices are inflated therefore it's OK to steal music is nothing more than Rationalistion.

Ask yourself honestly, what you buy music instead of downloading it if it was a third of its current price? my guess is that a most people would still rather steal it than cough up a couple of dollars.

Come on guys, everyone expects to be paid for what they produce.

AnonymousAnonymous June 4th, 2005
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