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Unbiased Digest about Music Industry

6 votes

14 May 2007, 00:53

IFPI alerts the German Chancellor to the crisis of music market

IFPI and top music executives have raised the issue of the music industry crisis in Germany during a meeting with the German Chancellor Angela Merkel last week.

Since 2000 the German music market has shrunk 50%. According to IFPI’s press release the rescue measures proposed to the Chancellor include:
- Introduce an obligation on ISPs to terminate service to subscribers abusing the service to make infringing content available;
- Permit CD burning only from own legally purchased original and prohibiting copying by third parties;
- Improve the German draft law implementing the EU Enforcement Directive to ensure proper tools to fight piracy;
- Ensure that the EU plays an active role in the WTO case against China on Intellectual Property enforcement and market access
- Urge the Czech government to clean up the huge pirate markets on the Czech-German border;
- Support an improvement in the length of the EU term of protection on sound recordings to match the level of protection provided in the U.S.

IFPI believes “the German music industry could reverse the decline and be viable again in three to five years” if the national government starts to implement the proposed measures immediately.


Read more:
International heads of recorded music industry raise crisis of recorded music market in Germany with Chancellor Angela Merkel, IFPI



Editor’s comment

Try going to the popular chain of electronics/music stores in Germany. You’ll be amazed by the huge piles of CD- and DVD-R spindles at the cashiers’ counters. Those man’s height piles might exceed the volume of music CDs sold in the store by tens of times. Also finding a CD which is not in the current top 100 bestsellers list might be a problem. According to the IFPI figures, 149.5 million of legitimate CDs were sold in 2006 in Germany and 486 million CD/DVD copies were burned at the same time. Industry lost an estimated €1.24 billion due to burning in 2006. That means when someone burns a CD or DVD in Germany he or she robs the music industry of
2,5. Also if you divide the amount of CDs burned by the number of people aged between 15-65 years (app. 54,6 million) that will make 9 CDs or DVDs burned per person in 2006.

IFPI never mentions digital music option in their rescue plan as well as the true reasons of music market recession. Instead they propose measures which if implemented will bring the good old days of CD megastores and major labels’ rule back. Digital music downloads are seen rather an evil than a good at the moment. According to IFPI, 374 million illegal files were downloaded from the Internet in 2006 in Germany and for every legal download there are 14 illegal downloads.

Entry tags: labels 18, CD sales 13, lobbying 15, Germany 3, music industry change 20

Comments 22

1. by Nightfly, 14 May 2007, 21:05

The Clash said it the best "we're waiting for a clampdown"
but they would have no part of that..

2. by MusicFan, 16 May 2007, 10:25

Screw the record industry. They've been exploiting the artists with outrageously unfair contracts since the industry started and now they're getting a taste of their own medecine.

3. by Rock Wizzard, 18 May 2007, 15:18

Hmm I can download an album from say allofmp3 for $2 or go to the shop and pay $20.

It aint rocket science!

4. by kiteflyer, 18 May 2007, 21:46

As long as i have to pay 15 € for a new cd, as long would be music downloaded from the web.

5. by Russian music lover, 24 May 2007, 06:27

I can not buy Russian music in the US. Try going to iTunes and find a popular Russian pop musician. They only place that I can buy Russian is outside the US. Why is that? What group controls the American music industry?

6. by (Anonymous), 27 May 2007, 16:53

I am sick and tired of all the number throwing and daft, simplistic calculations being made with respect to this subject. What I would like to see is some solid research to come up with a compensation factor indicating how much of those copies would have actually be bought legally if copying would have been impossible.

Let's do a mind experiment. Suppose you walk into a regular music store . You know the type, the very 20th century concept where they have actual, physical CD's lying around, that were shipped there from the other side of the globe through numerous expensive transport mechanisms, where they pay lots of rent, electricity, pay several employees to hang around behind the counter to take your money and put the CD in the box (that they first have had to take out earlier). All of which you, the customer, are going to pay for which your next purchase.

Anyway, suppose this doesn't sicken you enough to turn around and leave straight away, and you make your way to the long lines of CD's and you start browsing. You find the CD you wanted, make your way to the register, and suddenly, balloons are flying and you hear you are the one millionth customer and you get to take home as much CD's as you like, all totally free of charge! What are the chances that you'll say: "Ok, well, I wanted to buy only this CD, so this is the only one I'll take home with me, thank you very much". Rubbish. You won't do that. You'll take as much CD's as you can carry. You'll take CD's of bands someone once mentioned were good, you'll take CD's of artists because you NEVER heard of them, you'll take albums because they have an interesting title or artwork, in short, you'll take anything and everything that tickles your curiosity.

This is exactly how people download music. No way each downloaded copy would have been purchased otherwise. Like I said, it's time someone came up with a good estimate, but in the mind experiment above, I would have taken 50-100 CD's with me, wouldn't you have? While I was only going to buy 1.

Surely record companies will say that I would probably have bought all those CD's anyway in the next few months. Yeah, sure. Record companies seem to assume that teenagers have allowances of several hundreds of dollars per month that they can all spend on music, and that adults can spend 20% of their income on it.

So here's my advice to the record companies: be a good dinosaur and die. The German market shrunk 50%? You ain't seen nothing yet. An not because illegal downloading will increase, but because it is painfully clear to everyone except you that you have no added value any more. Making professional sounding CD's can be done on a $5000 PC nowadays, so bands can't be forced into loanshark contracts because they need funding to record their albums any more. Marketing?? If it's not Top-100 material, you do NOTHING that Web 2.0 can't do much better through youtube, forums, personalized radio stations (Pandora ROCKS), etc. etc. Distribution?? Together with the software industry, you are in a business that is in the incredibly fortuneous position that you have a product that EVERYBODY in the entire world wants, and that requires no physical medium whatsoever. You don't need stores, distribution centers, foreign offices, all you need is some bandwidth. And although the software branche has embraced this and managed to cut costs dramatically, you fight it with everything you've got. Smart move..

In the next decade or so, it'll be amusing to see your last spasms. Can't wait to see how you are going to try and put teenage kids on death row for copying some CD's. Can't wait to see how you are going to piss off all the people that never downloaded an illegal track in their life by putting more and more DRM restrictions on material they legally purchased (tip: how about CD's that you can only play once a month, or only between 11pm and midnight? Or play on only one CD player, and if that one dies, you'll have to purchase all your CD's all over again? Oh, but you already have something like that, it's called iTunes, right? Sorry..).

It's been nice knowing you..

7. by KindVisitor, 30 May 2007, 03:24

^Anonymous: seconded. The world is moving on and the dinosaur hasn't noticed, yet...

8. by Only me, 5 June 2007, 02:23

I can only recommend to all: Buy some (not copyprotected) CDs of your favorite artits or DRM free legal music. Avoid and boycott DRM downloads and also illegal P2P networks. If you still need music you can get masses for free (and legal!) by using radio recording programs.

9. by aikanae, 14 June 2007, 01:47

RIAAradar.com has a online tool to help avoid RIAA associated labels. They know there is a movement to not buy from them because they have broken off some bands so that they look like they are independent labels.

The point is; Is the customer ever right anymore? Obviously not when laws will take up the slack.

What's gone under the wire is that RIAA and IFPI are claiming they are fighting for ALL musicians - rather than just those with contracts. The latest copyright law excuses the DOJ from identifying what's RIAA associated and what isn't, because "it's too hard".

There is 90% more music that is non-RIAA associated than there is RIAA associated since musicians are not as interested in joining a major label. 1/10th of RIAA sales equals more money to them with 90% profits direct. RIAA can't even offer 10% of profits to the bands. Several bands have sued RIAA (Mettallica, Aerosmith) for dodging payments.

As it is, radio stations pay a fee to an RIAA associated agency for rights to broadcast music - and it doesn't matter if bands are RIAA associated or if it's recordings of you singing in the shower. What are groups paid if they aren't RIAA associated? Notta. Bands that are associated are paid > $.04 and they are dodging out of that (per the lawsuit).

RIAA, MPA and IFPI are corporate associations that want to assume the duty of enforcing the law. That scares the beejeezus outta me even more. The idea that governments, including those who SHOULD know better, are complacent is not a good thing for freedom.

10. by aikanae, 14 June 2007, 01:53

It's not enough to not buy RIAA or IFPI associated labels when governments are not making the distinction between labels and independents. Right now they assume all music is major label associated.

It's up to people to stop paying attention and demanding major label associated music. 50% of the Grammy's were won by independent musicians. That was unheard of even 2 years ago.

Brittney who?

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