Grex Music Conference

Item 49: The Thirtieth "Napsterization" Item

Entered by krj on Wed Oct 3 16:11:15 2007:

38 new of 55 responses total.


#18 of 55 by gull on Wed Nov 7 20:58:48 2007:

The sad thing is, the record labels could have avoided reaching this
point if they'd bought into the idea of inexpensive online distribution
to begin with.

When music was only legally available on CD, I often illegally
downloaded it because it was so much more convenient.  Now that I can
buy music a la carte online for about a buck a track from iTunes or
Amazon, I find that much more convenient than trying to find good tracks
on the illegal file sharing systems, so I get it legally.  I suspect I'm
not the only one who has followed this pattern.



#19 of 55 by nharmon on Wed Nov 7 21:04:42 2007:

Say somebody buys MP3s from Amazon.com and stores them on an ftp server
at their home. The FTP server has no password, just a MOTD with your
standard "Unauthorized use prohibited".

Would the RIAA ever have a leg to stand on trying to get that server
shut down? Like, they couldn't say "we downloaded a few files and found
copyrighted material" because they would be essentially admitting to
fraudulant access to a computer system.


#20 of 55 by gull on Wed Nov 7 21:07:50 2007:

My guess is you'd have to show that you'd made some minimal effort to
secure the system, besides putting up a disclaimer.  But I'm not up on
current case law on that issue.  I know there was a case recently where
someone faced charges for accessing an open wireless network without
authorization, but I didn't hear how it came out.


#21 of 55 by nharmon on Wed Nov 7 21:19:21 2007:

I wonder if there is a legal obligation to protect copyrighted material
you've licensed. Hmmmm.


#22 of 55 by mcnally on Thu Nov 8 02:06:00 2007:

 re #19, 21:  That's already been the subject of arguments in some of
 the file-sharing lawsuits.  The record companies have attempted to
 claim that "making available" amounts to punishable behavior.
 The last I knew the issue was still strongly disputed and at least
 some of the courts in which the issue have been raised have been
 unsympathetic to that type of claim but as far as I am aware the
 issue is not settled one way or the other.  Which probably suits
 the record companies for the time being, as it's the *fear* that you
 might be sued, rather than the actual lawsuits themselves, that they
 count on to keep people in line.


#23 of 55 by hera on Mon Nov 12 03:56:03 2007:

All I read was something about Napster being destroyed. Who gives a fuck.


#24 of 55 by keesan on Mon Nov 12 04:24:57 2007:

If you keep posting this many short and relatively meaningless things I am
going to stop reading your posts.  Please think before you post.  I am not
trying to be mean, just letting you know the effect that it has when you post
one line in every item but don't really have a lot to say.  It takes a lot
longer to go through agora.


#25 of 55 by hera on Mon Nov 12 04:31:31 2007:

Fuck you, bitch. My opinions are sometimes short. That does not mean they are
MEANINGLESS. I don't mince words. In fact, I am repulsed by talkative people.
Your story about the mouse that entered your house was WAY TOO LONG, for your
information. However, I read it, and responded to it. I'm not very threatened
by the fact that you will "stop reading" my posts. I am entitled to my opinion
and I gave it in a slight few words. I would be very interested in knowing
just what profession you are in that causes you to be so upset about spending
five or ten more minutes reading posts on a (basically worthless) chat site?


#26 of 55 by nharmon on Mon Nov 12 20:48:31 2007:

tl;dr


#27 of 55 by hera on Mon Nov 12 23:31:22 2007:

That's okay since it wasn't addressed to you anyway. :)


#28 of 55 by krj on Mon Dec 3 17:59:22 2007:

Here comes the Grinch with more Christmas Shopping Cheer!!  

"http://www.reuters.com/article/musicNews/idUSN0132742320071201?sp=true

It's Billboard's coverage of album sales for the week including Black
Friday, the unofficial start to the holiday gift-shopping season.

>> " Merchants reported a comparable-store music sales decline
>> ranging from 15 percent to 25 percent for the weekend that begins 
>> with Black Friday, although they said robust movie and videogame
>> sales helped soften the blow.

>> "Nielsen SoundScan data backs up those merchants' reports. Album
>> sales totaled 13.9 million during the week ended November 25, an 
>> 18 percent decline from the 17 million sold last year during the
>> Thanksgiving weekend." << ENDQUOTE

One number leaps out as especially dire, reflecting the collapse of 
Tower Records plus sizable closures of other chain retailers such as
Virgin Megastore and Transworld/FYE: 

>> "By store type, album sales at chains (including merchants
like Trans World, Best Buy and Barnes & Noble) were down *** 40 ***
percent, indies were down 22.6 percent, and mass merchants were down 6
percent. However, nontraditional outlets were up 17.7 percent." <<

   (Nontraditional merchants are dominated by Amazon;
    Starbucks is also lumped in here.)

Most retailers are blaming a lack of new hit releases.  (Why are there
no new hit releases?)   Wal-Mart did very well with their exclusives
on the Eagles and Garth Brooks.

One small music retailer in Wisconsin said DVD sales were skyrocketing.
>> "At the 10-unit Exclusive Co. in Oshkosh, Wis., for example,
>> general manager Stephanie Huff reported that DVDs were up 216 
>> percent Thanksgiving week. TV shows drove the DVD surge, 
>> she added."

-----

Note that the Nielsen Soundscan number for album sales (digital tracks
sold in an album bunch, and physical CDs) was down 14% Year-To-Date
leading up the Thanksgiving.  To have that number suddenly accelerate
to 18% (week to same week year ago) for the week indicates that there
is no hope of any improvement in sales for holiday season 2007.
I expect physical retailers to go forward with their worst-case
plans for reducing their CD-selling operations in early 2008.  This is
likely to be 30% floorspace reductions and more at the mass merchants
-- how much space does Wal-Mart need to sell its two hit artists? --
and many indie stores will just surrender as lease renewal 
comes around, as they contemplate business prospects over the next
several years.


#29 of 55 by hera on Mon Dec 3 18:14:57 2007:

And I should care if someone else makes a lot of money, why? THe stupid music
industry is RIDICULOUS with how they gouge consumers just to listen to some
music or the movie industry who charge people so much for DVD's that cost them
barely pennies to make (I'm guessing, but I bet I'm right). UH OH! Maybe
SOMEBODY needs to stop paying exhorbitant salaries to d*ckwipes like George
Clooney and other actors. I'm happy. I hope we're starving those rich soulless
"celebrities".


#30 of 55 by tod on Mon Dec 3 18:48:19 2007:

My old homey..
December 3, 2007

BY GRETA GUEST
FREE PRESS BUSINESS WRITER

Record Time in Ferndale will wind down operations after the holidays with a
clearance sale before its owner consolidates operations at his flagship
Roseville store.

The Roseville store opened in 1983, with Ferndale following in 2000. Owner
Mike Himes said his business will focus on the Roseville and eBay stores,
Amazon.com and his e-commerce site.

"We have lasted longer than anyone else has, so we must be doing something
right," Himes said. "I love the vibe here in Ferndale. There just aren't
enough people coming in." 
Ferndale's main shopping area on Nine Mile has declined along with Michigan's
economy. Empty storefronts are becoming more common, particularly since the
Old Navy store at Woodward and Nine Mile closed in the summer. 

But news of the impending closure of another independent music store feels
like Harmony House all over again. Harmony House went out of business in 2002.

"It's kind of a sad thing," said Jonny Victor, 32, who was shopping at Record
Time in Ferndale last week. "I much prefer to shop at an independent music
store. I like to get the actual CDs instead of downloading them." 

The Farmington Hills resident said he had been going to a music store in Novi
until it closed. Then he found Record Time.

A trend winds down

About 1,200 independent music stores have closed since January 2003, said Joel
Oberstein, president of Studio City, Calif.-based Almighty Institute of Music
Retail, which offers marketing and other services to independent record
stores. 

There are still about 2,500 left, Oberstein said. In Michigan, 42 independent
music stores have closed, leaving 63 stores, according to the institute's
figures.

Harmony House closed its remaining 20 stores in 2002. The local chain was
founded in 1947, but the mix of competition from Internet downloads and
mass-market retailers did it in. The chain had 38 stores at its peak in 1999.

"What you are finding now is there is a survival of the fittest mentality in
many of the stores," Oberstein said.

The stores that make it amid double-digit percentage declines in CD sales and
other economic pressures are the ones that diversify by selling other items
in the store, such as T-shirts, and selling online, Oberstein said. 

"You have to do a little bit of everything, I guess," said Mike Rome, co-owner
of Street Corner Music in Beverly Hills.

Putting items online

Rome said he sells records and 45s on eBay and puts CDs that don't sell in
the store on Amazon.

Himes said he expects to start the clearance sale Dec. 29, and it will
continue until he can sublet the 4,400-square-foot store to another business.
He's hoping to close in February.

Sales at the Ferndale store are down 10% to 30% most weeks, Himes said, while
the Roseville store has been holding its own.

"We sell music physically. The east side, being more blue-collar, is less
affected by techology. The west side is more affected by technology and the
iPod age," Himes said. "It feels like I'm selling typewriters or pay phones;
you don't see those anymore." 

Himes also feels frustrated by an industry where all the marketing dollars
are moving toward the digital delivery of music.

Also, exclusive content is first going to venues like iTunes, and the
independents can't get it for 60 days. Big box retailers are also getting
exclusives the little guys can't.

"We're looked at as a last stop, even though we are the people who get bands
started," Himes said. "They say they appreciate what we do, but sometimes
we've got to wonder."

Himes said he will let go about five employees in Ferndale when he transfers
all operations to Roseville.

He has 15 employees at the 9,000-square-foot Roseville store on Gratiot near
I-696.

"We are leaving Ferndale, but we want to make Roseville bigger and better,"
Himes said.



#31 of 55 by krj on Mon Dec 3 18:54:05 2007:

I suppose I should go look at the Roseville store; I've never heard of it.
I had no idea that there were 60 independent stores left in Michigan;
I wonder if that number includes the stores which sell primarily 
used CDs?


#32 of 55 by gull on Mon Dec 3 19:06:40 2007:

Re resp:30: I really feel for Michigan.  The national economy is about
to go into another recession, and Michigan hasn't even recovered from
the previous one yet.


#33 of 55 by hera on Mon Dec 3 19:20:29 2007:

Michigan is fine. We have the Great Lakes. And more. I see nothing for you
to feel negatively about, gull. 


#34 of 55 by mcnally on Mon Dec 3 19:48:16 2007:

I was in California visiting a sister over Thanksgiving, which meant I had
an opportunity to peruse some of the sale circulars for Black Friday and
the rest of the post-Thanksgiving weekend.

Although I remember the advertisements for Best Buy, Circuit City, Target,
etc, prominently featuring sales on DVDs, I can't remember any of them
devoting a significant amount of space in their sale circulars to music.
In other words chain stores didn't even bother really promoting music sales
this Thanksgiving weekend, either because they knew they didn't have anything
that would draw in customers or because they expected other items (DVDs, etc)
to do better.  Note that most of these chains had advertisments featuring
specials on MP3 players, so it's not that they didn't expect people to spend
money on equipment to listen to music, just not on the music itself..

(There's another possibility, though:  I didn't study the advertisements
closely -- it's possible there *was* some music prominently featured but that
the titles were so forgettable to me that I even forgot about the
advertisement.  I'm not sure that's a brighter scenario from the record
companies' points of view..)


#35 of 55 by tod on Mon Dec 3 19:57:06 2007:

Magazines and CDs are a loser in a storefront.  You can get the info readily
online.


#36 of 55 by twinkie on Mon Dec 3 22:17:49 2007:

Which I suppose is a blessing and a curse. 

Sure, there's something to be said about the instant gratification of getting
music online, but there are some titles that I want a full-fidelity (issues
about CD level boosting aside) rendition of. 

I don't really care too much about the latest Rhianna song sonding a bit
compressed, but I care a whole lot about losing *anything* in a Kolacny
Brothers recording. 

I used to love going to Harmony House to find more obscure albums... but then
their Novi store became a mega JoAnn Fabrics, followed by their Farmington
store becoming nothing. 

So I found a new home at Record Collector in Livonia, forcing them to promptly
close. 

Repeat the Beat in Plymouth? Gone.

Switched On CD's in Novi? Gone.

Even Borders has switched to mini kiosks of hypercompressed "everything in
the store" samples, instead of legitimate listening stations where you could
hear a full track if you wanted to.

At that rate, it begs the question: Why drive 30 minutes to listen to crappy
mp3 samples of music on headphones of dismal quality and questionable hygiene,
when I can listen to crappy mp3 samples of music on decent speakers on demand,
spend half as much money on the product, and save gas by not driving?

Then again, it also goes back to UScan. Much like I'm doing a cashier's job
at a store with a UScan, I'm doing the production factory's job buying and
burning my discs from iTunes or Amazon. 

Anyway...

Music is broken. 



#37 of 55 by gull on Mon Dec 3 22:46:14 2007:

Well, with broadband speeds being what they are, if there's a
significant demand for non-compressed content out there I'm sure sooner
or later it will be available.  And I don't think the CD is going away
any time soon, but you may have to resort to mail-ordering them.

For me it's not that big a deal because stuff I want is rarely in stock
at music stores anyway.  I figure if I have to wait for it to be shipped
anyway, I might as well just have it shipped to my doorstep.


#38 of 55 by marcvh on Mon Dec 3 23:02:48 2007:

Unfortunately, the demand for high-quality audio content (or video for
that matter) doesn't seem to be all that great.  The trend is toward
quantity and convenience over quality.


#39 of 55 by cyklone on Tue Dec 4 00:29:28 2007:

We are DEVO.


#40 of 55 by gull on Tue Dec 4 00:39:54 2007:

Re resp:38: Well, audiophiles have always been a minority.  And a lot of
them are still insisting on vinyl.


#41 of 55 by tsty on Fri Dec 7 03:16:55 2007:

i haerd that rcord cmpanies are no longer ot suport  the    cd  format
as of jan 08 .. is this ture?


#42 of 55 by mcnally on Fri Dec 7 03:36:59 2007:

 re #41:  That's not even remotely plausible.  January 2008 is only about
 three weeks away at this point.  What would they replace it with?

 I suppose it's possible that by "no longer support the CD format" whatever
 source you read that in means that record companies will no longer bother
 ensuring their releases (especially the copy-protected ones) will play in
 all spec-compliant CD players.  They already crossed that Rubicon a while
 ago, though..


#43 of 55 by krj on Fri Dec 7 16:16:36 2007:

I'd be curious, ts, if you can find the source on that.  I follow
music biz news about as much as any consumer, and I have heard 
nothing of the sort.  The closest I can come up with is widespread
reports that the major chain retailers, such as Wal-Mart, Target,
Best Buy, and maybe even Borders, are going to cut 30% or more of 
their CD space after the holidays, which would be January 2008.
 
And DRM embedded on CD appears to be a completely dead issue for
normal consumer releases.  There may still be some DRM software 
applied to promo/review copies to try to control early file-sharing
leaks on new releases, but I believe that the four major labels
have dropped all copy-protection efforts on consumer CDs.
There were two things driving that decision:  
  (1) the messy fallout from the "Sony Rootkit" DRM; 
  (2) the labels finally were forced to accept that a
large number of CD purchasers intend to put the music on their iPods,
an operation which was obstructed by most of the on-CD DRM systems.

<krj realizes that the second paragraph is probably incomprehensible
 to anyone who hasn't been following the "Music War" saga. >


#44 of 55 by gull on Fri Dec 7 17:20:29 2007:

Oddly, the movie industry doesn't seem to have learned from the music
industry's tribulations.  Copy-protected DVDs are starting to appear.


#45 of 55 by gull on Fri Dec 7 17:20:57 2007:

(Copy protected in ways other than CSS encryption, I mean.  They're
being designed to make it hard to copy the encrypted VOB file from the
CD to a computer.)


#46 of 55 by hera on Fri Dec 7 17:36:49 2007:

Who cares? The movie industry is greedy. After they have you pay to see the
movie in the theatre, they want to pick your back pocket for the DVD.


#47 of 55 by krj on Fri Dec 7 18:07:10 2007:

Gull:  Bring us some references if you can?  I'm so saturated in 
music-biz coverage that I am not keeping up with much of what is 
happening in Videoland.


#48 of 55 by gull on Fri Dec 7 18:24:33 2007:

I don't have any general news sources, just complaints on the MythTV
forum.  (MythTV has a feature that allows "ripping" DVDs to files on a
hard disk, so you can view them more conveniently, just like you can rip
CDs to your hard disk to listen to them with greater ease.)

Apparently some DVD releases now have large numbers of intentional bad
sectors.  Consumer DVD players ignore these and keep right on going, but
DVD-ROM drives spend a lot of time retrying them.


#49 of 55 by krj on Fri Dec 7 18:34:40 2007:

Ah, same sort of trick that was done by Cactus Data Shield, among
others, for the CD market.  

Incidentally, I don't have the link immediately available, but 
the expectation is that DVD sales are going to finish down 4%
for 2007, compared to the previous year.  This will be the first
decline in DVD sales ever.   I think these are USA numbers.


#50 of 55 by mcnally on Fri Dec 7 20:22:31 2007:

 4% of the market sounds like a plausible estimate for Blu-Ray and
 HD-DVD market share (combined) at this point, give or take a bit.


#51 of 55 by tsty on Tue Dec 11 03:52:40 2007:

hmmm    a   0  or a  1  ?


#52 of 55 by tsty on Thu Dec 13 11:02:26 2007:

re 43 ... um, i;ll atake a look for yuo.. it was absorbed in passing so
i might ahv emis-something-or-othered the news.


#53 of 55 by krj on Thu Dec 13 19:11:30 2007:

This one is an ugly URL, sorry:

http://www.northjersey.com/page.php?qstr=eXJpcnk3ZjczN2Y3dnFlZUVFeXkxNjcmZm
diZWw3Zjd2cWVlRUV5eTcyMjc5OTMmeXJpcnk3ZjcxN2Y3dnFlZUVFeXk3

It's a report on New Jersey-based small CD labels which are
encountering more and more difficulty.  The main label profiled in the
story is Shanachie, which handles a great deal of Celtic folk and
reggae.  Indie rock label Bar/None is also in distress.  In contrast,
metal label Eclipse is doing well; they get more from iTunes sales per
copy than from physical CD sales.

Shanachie says sales are down 20% over the last five years.  The loss
of Tower Records and small retailers has been a blow.  Borders is no
longer welcoming to small indie labels; they are demanding a $2/copy
"co-op" payment to stock the discs in their store.  (I did not know
that Borders had moved to demanding a stocking fee from labels; I
thought that was only a policy at Trans World.)

Shanachie used to be able to work some with Wal-Mart (!!) but Wal-Mart
is now streamlining their CD selection and Shanachie and other
specialty labels are now mostly frozen out.

-----

The Nielsen Soundscan numbers for CD sales are turning into a rout
at the end of the year.  These are gleaned from the week-by-week 
sales reports from Billboard and no one story has yet assembled the 
threads:
 
In early November, off the top of my head, year-to-date album sales
were down 14% from 2006.

For Thanksgiving week, including the famous Black Friday shopping 
day, the downturn accelerated: sales for that one week were down 
18% vs. that week year ago.

For the next week, the downturn accelerated again:  sales for the one
week were down 23% vs. year-ago.  That's the most recent sales report.

Those numbers are for album sales, defined as [CDs + downloads sold 
in an album-bunch].  Including single track downloads probably makes
the number look a small bit better, but this is still awful for the
labels and for retailers.   The rarely-reported numbers on physical 
CD sales are usually -5% from the commonly cited album sales number,
so that would speculatively put last week's CD sales as -28% compared
to the same week last year.


#54 of 55 by hera on Thu Dec 13 19:49:15 2007:

Who cares? If your music is good, people will be begging for it.


#55 of 55 by tsty on Thu Dec 13 20:53:01 2007:

re 53 ... jhere ios the shlrot non-ugly version:
  
   http://url.rexroof.com/16616
  


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