OK, my last rant for the year about the music industry: 

Yesterday, we discussed the attempts to wring more dollars out of smaller numbers of music buyers. Today’s rave looks at a new fallacy gaining traction: Decreasing CD sales can be supplemented with increasing music DVD sales.

That gets it exactly backwards; its increasing DVD sales which are c ontributing to decreasing CD sales. Consider this bass ackwards NYT headline: “Music Labels Look to DVD's as Sales of CD's Decline.”

A more accurate header would have read: “Sales of CD's Decline as DVD's Soar.”

We considerd this previously in terms of DVD movies. Lately, we've been noticing DVDs as a music format (concerts/videos) is also kicking CD ass. Its not overstating it to say that DVD music sales have been slowly eating away at the entire CD format.

It's no surprise why: at $15, the CD is a decreasingly attractive value to consumers versus the DVD. One contains 45 minutes of audio; the other 2 plus hours of audio, video, documentaries, interviews and additional content. Which provides a better bang for the increasingly tight consumer dollar?

The music biz marketing wizards need to face facts: CDs are a lousy deal. Indeed, the so-called free DVD given away with a CD purchase is a misnomer; buy the DVD -- the more desired product -- and it comes with a free CD.

As much as they desperately want to blame P2P, the dysfunctional Labels need realize that nearly all of the “old economy” media have been suffering a sales slow down: Newspaper readership is down big; Televised sports programs have seen their audiences slide; Film attendance is soft (revenues are up due to increasing ticket prices); Magazine sales have been lackluster; The Book Industry Study Group reported that sales dropped by 23 million units from 2002 to 2003.

Increased competition from many digital formats -- internet, TiVo, DVD, video games, and digital music -- are competing for scarce consumer time and money. Why is it that only the music industry gets to blame the P2P boogie man for its woes?


Source:
Music Labels Look to DVD's as Sales of CD's Decline
Robert Levine
NYT, December 27, 2004
http://www.nytimes.com/2004/12/27/business/media/27dvd.html

Is Hollywood to blame for the music industry's woes?
Meredith Amdur
Variety, March 31, 2004
http://www.corante.com/copyfight/archives/002787.html