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Fighting Old Battles
by Andrew McCaskey
Or Growing Up
It may be that the RIAA’s and the music industry worldwide are fighting yesterday’s battles. Or if not fighting directly, using the power of ISP’s and institutions to try to fight piracy directly.
First, the numbers. DigitalMusicNews.com is reporting that CD sales have now fallen to less than half the number of CDs sold in their peak year, 2000. In 2008, CD sales were down 54.6 percent from 2000, or a giant 514.6 million units less. Of course, the recording industry points immediately to downloading and piracy as the reason for the decline. Even though legitimate paid downloads are a substantial and rapidly growing segment of their business, on the surface, they clearly have a problem.
The first problem is that Napster and it’s spawn have been around for almost ten years. The code was released in June of 1999. That means that file sharing and resulting piracy have been a part of their lives for almost everyone under 30. A recent survey in the Netherlands identified about 25% of their population as active downloadeers of hacked and pirated DVDs, games, and music in the last 12 months. Conversely some other behavior that you would not expect: Those same downloaders purchased almost half of the legitimate physical products. In other words, the pirates were some of the best customers that the music industry has, purchaseing at twice the rate of other customers.
Lets recap: A group of people- customers – who have one set of behaviors, ie downloaders and pirates represent only 25 % of the population but are responsible for half of your sales revenue. That group will also grow larger year by year. Ten years from now, no-one under forty will be in the group.
My conclusion : There will always be people who will do the right thing. And, as they get older they begin to see the wisdom of doing the right thing, appreciate quality and the experience, and have to set an example for their families. The industry can either get out in front of the trend and make it easy for them to do the right thing, as we spoke of recently with respect to NefFlix and the Roku box, or you can resist by all means necessary.
You may insist on fighting, but your customers are growing up.
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