Dastardly Downloads: Is Napster to blame for the music industry’s slump?

In August, the RIAA issued a study by Peter D. Hart Research Associates which reported that among people whose downloading activities increased during the past six months, 41% say that they purchased less music during that same period, compared to 19% who stated that they purchased more music as a result of the downloadingStory.mp3. An article which appeared in the online magazine Slate, however, calls the veracity of those findings into doubt. The article was entitled Hit Charade: The music industry’s self-inflicted wounds, by Mark Jenkins. Mr. Jenkins points out that the recent slump in record sales experienced by the industry — sales dropped 7% during the first six months of 2002 — cannot be blamed solely on Napster and its ilk. He concludes that intervening causes can better explain the loss in sales, including such things as the recession, inflated CD prices that have grown much faster than inflation rates, and major labels whose monopoly of the market and distribution have ostensibly squelched musical innovation.

Supported by data from the research firm, Forrester Research, Jenkins makes the interesting point that over two-thirds of the music CD’s purchased at retail outlets are purchased by people who do not download music. In addition, another research firm, Ipsos-Reid, established that 81% of people who download MP3’s from the Internet buy as many or more CD’s than they did before, which seems to directly contradict the Hart findings.

Jenkins compares the current slump to the record slump in 1978 when major labels blamed the latest technology, cassette tapes and video games for the decline in sales, claiming that sharing of songs on cassette tapes and little Johnny spending too much time in the video arcade was killing the business. He also points out that the major labels, both then and now, tend to “snub” the over-40’s market, i.e., baby boomers, which make up well over 44% of the CD-buying market, in favor of a younger fan base that loses interest in the latest fad as quickly as they squeeze the “X” button on Madden 2003! The older fans, as Jenkins points out, are the ones likely to be loyal to artists and support niche genres such as jazz, folk, bluegrass.

The bottom line, according to Jenkins, is that Napster is no more to blame for the current decline in record sales than cassette tapes were to blame for the lagging record sales in 1978. Jenkins’ main thesis is that the industry has suffered from the monolithic control over the distribution outlets by multi-national, multi-purpose conglomerates, thereby losing the serendipity that is such a part of the music culture. The cure, he says, will be some unique and novel “shock” act that will probably arise on an independent label — something Nashville pundits have been saying for quite some time now (for the full article, see http://slate.msn.com/?id=2069732).

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Filed under Life on the Row, Music Industry, RIAA Litigation

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