SIDENOTE: 2008 is going to get nasty.

http://www.slyck.com/stor..._Sales_201

January 24, 2008
Thomas Mennecke

Guess what, people do download from iTunes, didn’t ya know. In fact, there’s been over 3 billion downloads since the service began in 2003, and the music store should hit its 4 billionth sale sometime this year. That’s great news, it would appear, for the music industry, which has been in a global slump since 1999 - the same year Napster brought P2P technology to the mainstream.

However, not all is well in the land of the music industry. In fact, things haven’t improved all that much since Napster launched, and by all accounts, things have grown dramatically worse. In a yearly report published by the IFPI, 2007 proved to be a year of continuing turmoil. CD sales are down, increases in digital sales failed to offset losses, and the music industry is growing desperate. It’s no secret that the entertainment industry is sending out perhaps their last best hope in turning the tables against piracy – the ISP.

The ISP (Internet Service Provider) has been at center state in the online copyright wars since mid-2007. Protected by the DMCA (Digital Millennium Copyright Act), ISPs are protected by a safe harbor provision which grants immunity from any law breaking activity that may occur on their networks. Sounds great. Yet ISPs are being pressured into becoming copyright traffic cops, with juggernauts such as AT&T voluntarily absolving themselves of the protection of the DMCA. ISPs are also feeling the heat in Europe, as President Nicolas Sarkozy has created a “French Connection” of sorts between his government, ISPs and content providers. The agreement proposes that ISPs disconnect large scale uploaders, while developing and implementing filtering technologies.

The IFPI, in its 2008 Digital Music Report, recognizes that P2P and file-sharing technology is strong, is increasing in popularity, and is becoming more difficult to control. It’s been nearly 10 years since the inception of Napster, and the industry has attempted a myriad of solutions to the P2P problem. As pointed out by the IFPI’s study, there are cases of success. Whether these successes are a result of enforcement against P2P is another matter, however. The IFPI's study cites a dramatic increase in the number of authorized services, the number of licensed tracks, and the number of tracks sold. These increased are impressive; however, digital tracks have failed to offset the decline of the CD, as “first half” music sales for 2007 are down 9%.

Yet these isolated areas of success have still failed to stop file-sharing, or even slow its growth. Suing file-sharers has accomplished little more than foster the abandonment of the FastTrack (Kazaa) network. Attempts to shut down BitTorrent indexing sites has netted some notable victories, such as OinK, but for every BitTorrent site shut down, a new one almost immediately takes it place. And as far as flooding networks with corrupted files goes, one only need to peruse MediaDefender’s leaked emails to see how well that’s going. With all attempts failing, the last line of defense against the growing surge of file-sharing rests with the ISP. Here are the staggering odds they face:

1) P2P downloads outweigh “legitimate” downloads 20:1.

2) iTunes has sold about 3.5-4 billion songs since 2003, while P2P networks trade over 1 billion music files per month (not including BitTorrent, Usenet, etc).

3) The public has expressed its vehement disdain toward ISP filtering. The file-sharing community will see this as an act of war.

4) The technological arms race is heavily in favor of P2P. It has a massive resource of talented, motivated, and angry programmers working to defeat anything thrown at their beloved networks.

5) The ISP is the last line of defense against file-sharing. If they fail, there’s nothing left to stop the spread of file-sharing. Laws won’t deter the lawless.

The entertainment industry is placing its bets with its last line of defense, the ISP. Even if the ISP is forced into a position of filtering or disconnecting users, it won’t last long. File-sharing technology is resilient, and has repeatedly proven to counteract anything thrown at it. Efforts thus far aimed to filter or throttle BitTorrent or P2P technology have been spotty, with a public relations backlash that only the music industry can relate to. IFPI Chairman John Kennedy introduced his organization’s report with the following:

“2007 was the year ISP responsibility started to become an accepted principle. 2008 must be the year it become reality.”

He’s right. For the sake of his industry, 2008 must be the year it becomes a reality. If it doesn’t, 2009 will be the year of the torrent.

TonyVanDam said:

This is the record and movie companies' own fault for this predicament. They are working on an outdated, dying business model and attempting to use the government to protect it. And who are the record companies to tell the ISP's that all massive uploads of files are pirated or copyrighted music and movies? Some of these are legitimate media, and in some cases may be financial or medical records from large institutions which are being swapped among each other.

Besides, I think the death knell has already arrived, and it is not the file sharing networks like Limewire, BitTorrent, et al. , but the rise of MySpace, Facebook, and YouTube which will ultimately kill the music and movie industries in its present form. These social networks are replacing the middlemen in the entertainment industries and sending product directly to the consumer. It is this result which the major record labels are trying desperately to stop, but this is just like putting a finger in the hole in the dike protecting Holland from the sea.

Well even Steve Jobs admitted that though everyone owns an iPod, only about 2% of the music on their iPods is purchased from iTunes. Now for an older established artist they can more easily make things like this work, delivering tracks directly to people etc.. because the base is already there, and they for the most part could care less about charting, i mean does that even matter anymore? In the end what you will have is the people going from artist to consumer are the ones established or that can play shows/tours etc.. and the ones signed to labels will be the media savvy artists, magazine covers, movies etc.

iTunes is fighting a losing battle along with the music industry.

I download stuff from torrent sites but its mostly older music that i cant find in the stores. Newer music ill always buy. Ill never buy from itunes. Simply because im not paying for an album i can't see. People who spent $10 for a digital album are insane when they can buy a hard copy for a couple of $$ more and the quality of MP3s as everyone knows arent as good.
[Edited 1/29/08 10:53am]

Make good music, I'll buy the cd. Otherwise.....

728huey said:

Um interesting language choice there.

Moving right along, ISP's can't do a damn thing.

Dance said:

Why would they even want 2?

Graycap23 said:

Yeah, it'll be a waste of time.

Graycap23 said:

Gubbment threats

WildheartXXX said:

I'm not insane, but I still buy some albums on the iTunes Store for a few of reasons:

1. Hard copies of some albums are scarce
2. Sometimes the albums come with bonus tracks
3. Instant gratification

The AAC files that are sold on the iTunes Store sound just fine when you are usually listening to music through headphones or computer speakers.

The results of this study were obvious before it was done. The iTunes Store sales are remarkable -- especially when you consider that the store was Mac-only for the first year -- but no one in his right mind would think the numbers would be comparable to free downloads.

Time Warner Cable is said to be test marketing a new pay-by-use scheme in a few small markets.

They've claimed that this won't impact current customers who've already signed up for unlimited access, only new customers (ugh).

Anybody that makes money off of making a portal to the Internet would love to get away with this, as it would almost certainly make them significantly more money.

Then suddenly you have to think about whether you really want to download that 100-megabyte "free" upgrade to your OS and even software that you've already legally purchased.

Want me to contribute to music sales?

Here is my lists of requests...

If purchased on iTunes - it must have bonus, or something I can't get from somewhere esle.. esclusive music is a must for me.

Music must be worth purchasing - I can see why p2p/bit torrent is so huge now... the public would love preview music before forking twenty bucks for a piece of shit disk that contains one track worth hearing. iTunes is great for previewing music, but lets face it, for the most part the quality is shit compared to the "bootlegging" vbr's out there.. the quality can't compete.. how do we defeat this? Start offering downloads at great quality.. and don't raise the price just because you went up a bit rate or two.. why? it only pisses those who know about the quality of music off...

third and final - Get creative with each album. It is considered a work of art when you buy a great album with great artwork.. a silver back is a must for me with great music.. otherwise.. i'm gonna find it somewhere else..

I'm sick of this shit where these record companies are putting blame on the consumer.. how about listening to the consumer? I don't think that will ever happen, but in the meantime, i'll be torrenting while their companies sink...


fuck the riaa too!
[Edited 1/29/08 15:03pm]

Well now U2's manager, who also heads up a few other companies and artists has weighed in on ISP and shutting things down, they are going after the companies themselves not the person at home getting it for free.



U2 MANAGER CALLS FOR END OF ILLEGAL DOWNLOADS
U2's manager is spearheading a campaign to end illegal music downloads from the Internet.



Paul McGuinnes - who has guided the Irish rockers to 150 million album sales over the last 30 years - has called on Internet service providers (ISP) to immediately introduce disconnection policies in a bid to deter illegal downloads.

McGuinnes is also urging the government to prosecute companies if they fail to prevent illegal file-sharing.

He says, "If you were a magazine advertising stolen cars, handling the money for stolen cars and seeing to the delivery of stolen cars, the police would soon be at your door.

"That's no different to an ISP, but they say they can't do anything about it. If you steal a laptop from a store or don't pay for your broadband service, you'll soon be cut off and nicked (arrested)."

Source: WENN



And the argument that if you make good music than we'll pay for it, its a total bunch of BS. Reason being what you may like i may not, its that simple, this is someones work and everyone looks at it differently. You may think Amy Whineshouse is great and i dont think so, does that mean i should be able to get the album for free because i think shes worth it? that argument has never held any water, and its a cop out.

My problem with digital and iTunes is mainly the fact that it will cut a good % of people out that want music, digital is expecting everywhere to get high-tech and advance their computers to super speeds so they can have music instantly, but you cant expect everyone to just go out and do that, so the transformation from CD to digital in terms of selling, is much different than the change from Vinyl/Cassettes to CD, and you will lose alot of the consumer in that transfer. And for me personally i want album notes and see the damn thing, not a little picture on my iPod, and than downloading album notes and album art work, whats with all this work? why dont we just record the albums ourselves too. You know its like that thing when you are watching a news story and they say "For more on this story go to our website" how about you tell me now, since im here and your here.?

oh yeah, and what great defeat was it to close down a site like oink? I think its funny that now there boat loads of oink quality sites now.. It will be nearly impossible to regulate torrent sites by the end of the year.. they keep getting more advanced and they are spreading even more when they take one down..

Another problem i have with digital and the technology in general is that it can be crashed by anyone and affected by anyone. If i walk into a store by my cd go home and listen to it, no ones crashing my experience. Case in point, Magne-F the a-Ha member who recently sold 300 ltd editions of his cd/vinyl/artwork, decided that just the digital tracks he would give out, which was cool, because the 300 ltd editions were gone in about 20 minutes, its now a week later and the damn server technology isnt working properly to download the tracks yet. So i have no faith in digital for the most part, because it really has cheapened music, even the great stuff.

lastdecember said:

U2's manager need to have a Coke and a smile and shut the fuck up.

lastdecember said:

I think dude just wanted people to say his name.
[Edited 1/29/08 15:47pm]

Dance said:[quote]

lastdecember said:

And you can see they don't know him like that.

Did you hear that, you might be costing this manager the chance to become a millionaire and U2 the chance at reaching a billion.

But I'm sure this manager is much more concerned for the people that this is really hurting.

As Chuck D said early last summer in and interview with Tavis Smiley, he said "The record industry is dead" "The music industry will always be there" meaning that the way of getting music is over, reagrdless of who killed it, its over, the days of singles and remixes and stores its gone for the most part, unless you got small shops in your city but those will be gone soon. the Music industry like anything else will always make its money, just not off music. Thats why you are going to keep getting these one-ringtone artists every other month, because labels can make a bundle off that crap, and not give them anything, not worry about signing them to deals, etc...Labels are not around anymore to bring out "artists" its bottom line, what did we make this year and how can we make more off ....whatever.