"It's as if journalists are prepared to accept assertion as fact, and not even eyeball the RIAA data themselves."

That's an observation in Richard Chirgwin's September 19 LOCAL DATA DOESN'T SUPPORT RIAA CLAIMS in Australia's CommsWorld.

Last week, Chirgwin took a look at RIAA data because to him, they seemed "consistently mishandled".

"Since the data is on the RIAA Website, it's pretty lazy not to even run off a copy. Especially so when journalists favour the sensational over the mundane. When you're writing about the terrible threat of piracy, it's so much better to print the scary (and inaccurate) claim that US sales have fallen 25% in four years (I'm looking at the RIAA numbers, and I reckon whoever said that to the Herald needs new calculator batteries)."

Quoting from the ARIA (Australian Recording Industry Association) media release, "2002 saw a 4.4% fall in volume in the Australian market and an overall 4.5% average wholesale price reduction," he says.

However, that covers every product type in the Australian market; CD singles, DVD singles, vinyl. Everything. And the numbers take in 10 categories.

But, says Chirgwin, "Restrict the count to 'new media' and the numbers are much, much more revealing.

"Sure, CDs fell; but at the same time, the music-on-DVD sector went nuts, going from fewer than 2,000 units to more than 100,000.

"To put this picture, I've just aggregated three categories – CDs, music-only DVDs, and music video DVDs.

"By that measure, volume sales slipped only a small amount – 2.2% across the sum of the three sectors – while value fell 4.77%. (The numbers: 2001 volume was 50,632,586 units; 2002 volume was 49,513,822; 2001 value was 595,673,093; 2002 value was 567,255,871).

"DVDs are nearly twice the price of CDs, though – so the volume, I would argue, isn't that far off a straightforward replacement. Someone who buys a Britney Spears music video DVD doesn't buy the CD as well.

"But what about the decline in value? Between 2001 and 2002, the income these three sectors generated fell by nearly 5%. Isn't Australia on the same slippery slide as America?

"Not quite. A year-on-year comparison in Australian dollars ignores one important datum.

"Most of our CDs are imports, paid for in American dollars."

With that in mind, in 2001, the Australian dollar went declined relative to the American dollar, and it stabilised in 2002, says Chirgwin. "Grabbing some ABS numbers, I find that the average exchange rate for H2 2001 was 51.5c US; in H1 2002, it was 53.5c US. That's an appreciation of 3.88%."

Currency movement, in other words, accounts for a huge amount of the change in market value – as much as 80% - and the Australian industry got a lot of leverage out of the appreciating dollar, he states, and was in fact able to recover 80% of the cost of discounting with a stronger dollar.

"With currency movement taken into account – and I admit that exchange rates deserve deeper scrutiny than I gave them here – the local music retail sector outperformed America by a huge margin," he points out. "As PlayStation 2 and X-Box were grabbing the consumer dollar, the music sector lost only marginal amounts of sales, either by volume or by value.

But, he emphasises, one segment is noteworthy because it's the most direct target for the download: "CD singles lost nearly 20% of their value.

"Were ARIA to blame the shift in the singles market on downloading, I would be hard-pressed to argue – but CD singles are a small segment of the market. Most consumers probably don't buy them at all, because they don't see them as value-for-money. (DVD singles have been completely wiped out, which is no surprise at all: they were probably a dumb idea in the first place)."

Chirgwin believes the 2003 year-end figures from ARIA will be very interesting indeed.

(Thanks for the pointer, gilbd : )

what fun would it be if their stats were truthful? Their surveys have more holes in them than thev Titanic and they sink a lot lower.

I'm not getting TOO excited until the
sales flat line on an XY coordinate system, such that their sales coincide with the x axis...

~code

All in all the RIAA and its companies are LOOSING around 3 billion a year. Lets make sure this continues

The media can't be that stupid. some one knows all this but has made a concious decision not to make it public

RIAA

I'm not sure you guys will even need to try in a while. Knowing business tactics, they will attempt to continue bringing out innovative ideas that only end up costing the company millions (possibly billions) in order to attempt bringin back that money and will end up failing with them because of the negative PR and the company will inevitably kill itself because it buries itself in dead ideas.

I'm sorry RIAA, but this is the path I see in your future and there is no way to change your future.

The decline in CD singles began in 1997, well before Napster, during which year they shipped (net after returns) 66.7 million units.

In 2002, 4.5 million units were shipped, declared to be a $19.6 million "value" (about $5 per song).

They've spent more than $20 million on lawyers to sue children.

While "shipments" (which is a term the RIAA uses very loosely) of normal CDs have declined 14 percent since 1999, the "value" (another vague term) of those shipments has declined only 6%.

Hard numbers:
1999
CDs shipped -- 938.9 million
Value -- $12.8 billion

2002
CDs shipped -- 803.3 million
Value -- $12 billion

Data from RIAA 2002 Yearend Shipments.

They try to hide anything that makes them look as if they really arnt having a HUGE PROBLEM. Its sad really.

nice data, GD! good work!
sorta a bummer tho, i liked it better when the RIAA was losing its collective a**.


~time flies~

A rehash of gdZiemann

Fact: 80% of all criminals caught at the sence of the crime are under the influance of drugs.
Manipulation: Drugs cause crime.
Its easy to tear this one apart, what if we were to take drunk driving out of that figure (where being under the influance IS the crime)? I really believe that they get caught easier while under the influance meaning that statisic should mean Drugs cause stupidity
Point being, manipulating a stat is easy, bending numbers is also. How do we know the RIAA hasnt given away 4% more free CDs last year?

Just the title of this thread makes me laugh.
Fact or Fiction! That's a good one!

The riaa has lied to us so many times. If a curse should pox their house, and they could from that moment on speak only the truth, I think you would be hard pressed to find anyone that would beleive them.
WABBITMAN

I have discovered the awful truth...
the people who manipulate Cary-sue, are the hidden cartel run by :
Morticia
Gomez
Uncle Fester
"Thing"
and (drum roll)xmxmxmxmxmxxmxmxmxm
LURCH !!!

Mr. Chirgwin is right on the money with this article- the media always mentions sensationalized numbers, following the moniker of an RIAA hand puppet. The REAL data is much different from the RIAA's spin. Enough with the lies, already.

We need more articles like this one in public view to educate the public about the real state of recorded media sales.

InsaneWayne -- Actually, the RIAA is giving away LESS free product, another contributing factor to the decline in "shipments" and probably to sales as well.

This is interesting. Shipments decline by nearly 15%, Value declines by about 6%. Price per unit ($13.63 in 1999 vs. 14.94 in 2002) climbs by 9.5%, during a period where the CPI has barely risen at all (3-4% since 1999) Taxes have gone down by about 3%, unemployment is up to nearly 7% (was about 4.5% in 1999), in fact nearly every economic indicator was down or flat in the period from 1999 to 2002, yet wholesale prices for cd increase by 9.5%. Since there is no qunatitative measure of aesthetic quality of albums produced over this time period we can't really measure this, but my gut instinct is that this probably also declined. So bottom line how does the fact that more people had less disposable income with which to purchase a more expensive discretionary product of lower value affect the RIAA's member companies sales? If you listen to Shermen it doesn't at all but file sharing can cause a 15% decline in shipments or a 6% decline in revenue. Back to my little corner of the world, freight forwarding, if we had experienced only a 6% decline in revenue over the same period we would be doing cartwheels down the hall right now.

stevebugge, I'm in that same corner of the world, freight forwarding that is, for another 4 hours. When those hours elapse, I will become unemployed, another statistic. This is due directly to a greater than 6% drop in my employer's revenues due to recession. RIAA be damned.

I feel bad for the singles sector. They can no longer waste 95% of the products on one hit wonders that will suck in six months. I'm glad their dead. Save a friggin tree.

Zippy sorry to hear about your employment status, it's been a rough year in our business. Wars and recessions have the freight volume down a little bit. I blame third party freight brokers! You know if we sued potential customers who shipped with third party brokers instead of forwarders, we could make up some of that lost revenue. If we broke in to the offices of Cendant, and The Associates, and some other third party brokers, looked at a bunch of freight bills and then sued all of the people who shipped with other forwarders, we could save our industry just like the RIAA!

You know when I apply the RIAA's logic to my own industry their strategy sounds downright comical.