RIAA -- Repent, The End is Near

By George Ziemann (March 12, 2003)

In my opening argument on the subject of RIAA statistics, I made a distinct point of not questioning the validity of the organization's data, although I did question the conclusions which were drawn from it.

Today, we examine the2002 numbers themselves and answer the riddle I posed to some readers:

Now that all of the furniture has been cleared out of the room, can anyone see the elephant hiding in the living room?

Remove the Dead Wood

Let's make this easy and just talk about the last 5 years, 1998 to 2002. Scratch off the DVD Video entry because it's already part of the Music Video number. Finally, I'm going to roll together all of the CD singles, cassette singles, LP/EPs and Vinyl Singles into "Other."

The first RIAA data that I am going to dispute is the " Dollar Value" of absolutely everything. Through all of the data I have read on the RIAA site (when you can find it), there is no basis provided for the dollar value or how it was arrived at. Ever. It certainly has nothing whatsoever to do with the retail price.

In fact the entire chart is pretty much useless other than the last line. Why? Because these are units shipped, not sold. They are still out there somewhere and may come back, as the cassette single data indicates. The record companies had more returned in 2001 than they sold in 2000. In 2002, they were still coming back.

The Elephant in the Living Room

The total units shipped is of interest, but only when compared with the units sold. The RIAA never really discusses the retail numbers, preferring to go with percentages and other vague comparisons based on shipping data.

So let us look at just the total units shipped and sold, then determine the average retail price.

Judging by these numbers, the industry is going to add $1 per year to the retail price, whether we actually buy their stuff or not. The number they're pushing this year is $18 for 10 songs, a price that is pretty much consistent with the new pricing structures of Rhapsody, PressPlay and AOL. Sales are down, prices are up. It's just poor business.

But here's the elephant.

Well, looky there! $20 billion dollars. Divided by 5 years... that's an average of...

Exactly the number Hilary has been telling us that pirates are responsible for. Mysteriously, this is the first time I have even come close to this $4 billion figure I and landed right on it. But wait. Let's be fair. Let's look at those piracy numbers again... 6 million units (yeah, go ahead, count the labels as units)... $18 each (I'll even give you the new price)... Gee, you only found a maximum of about $110 million in "piracy" during 2002 and that's with real generous rounding.

The Bottom Line

There are several conclusions to be drawn.

• The whole piracy story has been pure unadulterated bullshit from Day One. Yeah, you may have caught a few assholes running off CD-Rs, but no matter how you twist it, there is no way you are ever going to gain any real credence with this approach because...
  
• You're giving away, losing, or shipping into outer space 25 to 30% of your annual production. I don't know where it goes, but it doesn't count as retail and it wasn't returned. Most manufacturers and retailers call this "shrinkage" when they're being nice; "theft" when they're not. I don't know of any other business that would tolerate more than a one digit percentage before the factory turned into a maximum security prison.
  
• It would be more profitable to pay the pirates than try them in court. How much money did you dumbasses spend tracking down the pirates this year? How much more in attorney fees? There was some television advertising, too, if I'm not mistaken. I'd bet you spent more on TV ads alone than the value of everything you seized in 2002. And for what? To prove a point?
  And that would be....?

To Hilary Rosen, Jay Berman and all the rest of the "Pirate Crusaders," I say, why don't you all just shut the hell up and go away? All of your capital-lettered acronyms together are doing more to ruin the music business than any of the people you have branded as pirates. We'd all be better off without you, and apparently, so would the record companies, if one compares your propaganda with their ads.

I mean, come on, the only people bitching about the record companies five years ago were the artists who had contracts with you. Now everyone hates you and what you stand for. Why? Because the more you tell us, the less sense it makes.

It's NOT About the Money

I think this is the big hurdle that most people's minds will not allow them to leap over. When the RIAA started this whole "evil consumer" game, I didn't understand at first, either. It's got to be about the money, doesn't it? Isn't that what they keep talking about? Royalties? Isn't that what the big fight is all about? As a matter of fact, isn't that what ALL those hearings and committees have been about? Isn't everything about the money?

Obviously not or they wouldn't let $4 billion in product just evaporate each year. This has nothing to do with money, royalties, mp3s, P2P, CD-R, pirates, counterfeits, bootlegs or any of that. Each and every one of these issues has been carefully plotted and introduced by the RIAA, then perpetuated by our brain-dead media and several addled members of Congress.

The RIAA could care less if Sheryl Crow, Tom Petty, Don Henley or any other artist gets paid for mp3 downloads. If half of the artists out there would step forward and admit their true perspective, we would discover that they don't care either. In fact, I would go so far as to say an overwhelming majority would actually be for downloading, were they honest enough to admit it.

Why? Musicians do not play, write and record music so they can keep it to themselves. They pay the radio stations to play their music, even though it's against the law, because that's the only way they can get airplay. I would do it if I thought I could afford it.

The first time I heard an artist trying to explain why it was a bad idea to listen to their music, it set off alarm bells that drowned out almost everything they said. However, in deference, I now always turn off the radio when a Metallica song comes on. In fact, I don't even turn it on anymore at all.

As consumers, we have watched you raise the price of CDs, year after year. And each year the quality of entertainment on those CDs declines. Did you like Britney Spears? Here's Christina Aguillara. Want a guitar with that shake? Here's Shakira. Send in the clones.

The consumer is also much more aware of how badly the record labels are shafting the artists, a process which is going to escalate logarithmically in the coming months, if I have anything to do with it. The RIAA has apparently forgotten that deep-down, most music buyers (and downloaders) really want to support the artists whose music we buy.

Why do you think it is that we'll pay $300 for a concert ticket but are reluctant to part with $16 for a CD? Part of it is because we now fully understand that if we buy a CD from our favorite band, they'll be lucky to get a buck. Tom Petty would be better off if his fans DIDN'T buy his album and sent him $2 with a Post-It note that said "Rock on, Tom" instead. They'd save $12, too.

It's not about the money. I'd pay $20 for a CD if I knew the artist was getting $5. But since I know they're not, I'm not buying anything. It's the principle, not the price.

It's not about the money. You guys are paying more in payola than you'll ever recover in 50 cent or $1 downloads. And ever since you took over mp3.com, you are openly employing the same illegal activity. Other than the recording industry itself, there aren't any pirates out there and if there are, you couldn't find them with a map. Even if you DID manage to find them all by some miracle, it's nothing compared to what you're giving away.

It's not about the money. Sony probably makes more on CD-R and DVD burners alone than the entire recording industry makes in CD sales. Burn all you want. They'll make more.

What IS it about then?

Okay, Hilary, the smoke and mirrors are all gone now. No more bullshit.

What IS your agenda anyway? I've shown you mine, now show me yours. And I'll issue the same challenge to you as I did to the rock stars. Confess.

Just who do you represent anyway, other than yourself? It's not the artists. It's not the companies that own the record companies.

I'll tell you who I represent -- about a million musicians across the country who are tired of having to deal with your garbage rules and restrictions every step of the way. You guys have ruined everything.

From the first day I tried to sell my first CD, you have been in the way. It was the RIAA that imposed CD-R restrictions at eBay and someone even accused me of copyright infringement -- when I was selling my own product. Hmmm. Who could that have been? Then I find out that you've done your best to infringe my freedom of speech as well. Keyword spamming? Try censorship.

Frankly, Hilary, I am not going to rest until the RIAA is closed down. Orrin Hatch promised us a Judiciary hearing on payola and we're not going to let him forget it. When that house of cards falls, you know what they're going to find.

So do I. And so do hundreds of thousands of musicians across the country. So it won't be enough to silence me. I've even had one "insider" offer this bit of wisdom -- "What I'm hearing is that everyone knows the system is fucked, but they won't dare to do anything until something equally lucrative for the few is in place."

Sorry, heroes, but the needs of the many outweigh the needs of the few. We're tired of waiting for the few to get off their ass.

So Hilary, are you going to tell the public what your agenda really is? Or do we have to do it? I already know the answer to that, too, but I'll give you a chance anyway.

And will you PLEASE lock the back door?