Number of albums bought hits new high . However, from the same article: “High street competition and increased discounting meant that profits from the album sector of the recorded music industry – much the healthiest, with the virtual collapse of singles – were actually down over the year by 2%.”
So whilst we are buying more CD albums the profit margin has decreased because we are paying less. You can see where I’m headed with this already, can’t you…
It’s kind of annoying that, whilst the RIAA in the States is still on the attack, and several ‘commentators’ are pitching ideas about how to manage and control the distribution of electronic formats (not to mention Microsoft launching “Music Club“), this kind of news doesn’t make the same kind of splash. Consider this little snippet from June of this year:
“The British Phonographic Industry (BPI) has reported a 4% slump in UK music sales, the biggest downturn since the launch of CDs in the early 1980s. It blames piracy, including illegal duplication and distribution by international criminals, for the decrease.”
Hmmm, so which is it? Is it piracy or competition that is to blame for lowered profits? And is the music industry really surprised that, when lowering prices, we buy more albums?
As an aside:
Consider FOPP. This record store has 14 outlets through the UK, and posted the following profits late last year: “December trading figures show a like for like sales growth of 8.45%, with a total sales growth reaching 60.64%.”
Now whilst that growth is not wholly because of CD sales (they go on to state that it is their ‘unique features’ that helped) I would imagine that they have one of the healthier CD sales totals due to their continuing policy of selling older CDs at discount prices. In fact, doing some rough arithmetic, I reckon that of the last 50 CDs I purchased 40 of those were from FOPP and 35 of those were discounted (?7 or less) older albums. Was I encouraged to buy more CDs because they were cheaper – hell yes!