Piracy Not To Blame For Decline In Music Sales?

by moe on March 12, 2009

dudewhoneedstoretire

I really want to know what this guy is smoking, because there’s no way he could be serious.

Russ Crupnick, a senior industry analyst with The NDP Group, spoke to an audience at the recent Digital Music Forum East and made some… interesting comments.

During his speech he said:

1. Piracy is not as big a factor in the decline of music sales as we make it out to be.

2. Dominant music listening is done on AM & FM radio, as well as CDs not being played on a computer (car, office, etc).

3. Other forms of listening to music are catching up, but will not replace the old standbys (like mentioned above) anytime soon.

4. 20 million music consumers have been lost between 2006 and 2008. He clarifies that they haven’t moved to purchasing digital downloads, they’ve just been “lost”.

5. People trading CDs and hard drives filled with music are a bigger problem than file-sharing via P2P networks.

WHAT?

Who is this guy and what world does he live in?

First of all, AM & FM radio? Are you kidding me?

I’m curious to see if he’s taken a look at terrestrial radio’s current numbers, or how he’s been able to monitor people’s private CD listening habits.

And “other forms of listening to music will not catch up to listening to radio & CD anytime soon”? You mean, other forms like like listening to music stored on your computer or your iPod?

Also, what kind of friend circle does this guy keep? Swapping hard drives & CD collections with friends is easier, and more common, than P2P? Really?

He’s right; most people would much rather hand over a piece of hardware that costs them over $100 and most likely contains other important files, rather than installing a free P2P program and double-clicking on the songs that they want to download. </sarcasm>

Oh, and by the way Russ Crupnick, those 20 million consumers that you’ve lost and can’t seem to find – try looking under the pillow that says Piracy. You know, the one that you don’t think is that big of a concern.

The fact is, more music is being consumed now then ever before in history. Those 20 million people didn’t just stop listening to music; they’re just not paying for it (read: Piracy).

But, we already knew that.

Rather than filling this post with information that we’ve all seen hundreds of times before, I’d prefer just showing you the video of his speech.

He’s right about one thing though, illegal downloading is not the number 1 threat to the music industry; people like him are.

{ 17 comments }

LESTER March 12, 2009 at 8:49 AM

WOW! I thought it was a joke at first. This guy must be crazy if he really believes all of this.

Francois Racette March 12, 2009 at 9:47 AM

WOW this guys is a “marketing” guy right ???? Seems to me like he might be looking at the wrong internetS ( hint hint same intellect as “president ” Bush). It really scares me when I, as a marketer rely on stats and numbers provided by people like him to create forecasts.

What would have cracked me up if if he said ” we are seeing an increase in people copying cassettes lol” why didn’t you say that!!! it would have made my day and cracked me up !

yes people have CD’s in their Car true !!!! BURNED CD’s from the InternetS

did this guy ever looked at mmmmmm i don’t know something called BigChampagne.

oh boy I think its time for some new blood in the game !!!!!

Ray Boule March 12, 2009 at 10:56 AM

Well Moe – let us look at who NDP group is first of all. They are a market research firm founded in 1967. Not exactly new to the field of market research.

Their market research is trusted by many large corporations such as Reebok, EA, Warner Brothers et cetera. I would think that their research has been vetted pretty thoroughly by these companies prior to signing any agreement with them. I think that in a court of law you could easily have them cited as an expert in the field of market research.

Secondly, he is getting all of his data from studies that NDP Group has done. He is not pulling them out of thin air. Obviously according this the research that he and his associates have done these are indeed the trends. Would a team with this much prestige and experience make massive mistakes like you imply? Possibly, but not likely.

I do agree that his results are incredulous and shocking – but I think they need to be studied more carefully by people in the music industry rather than being simply brushed aside as ridiculous because they are hard to understand and are certainly unwelcome.

sean beauford March 12, 2009 at 11:34 AM

LOL. At everything. smh

Thomas V. March 12, 2009 at 1:02 PM

I want to address the commenter above, Ray Boule.

Ray Boule, do you work in the music business? If so, what is your job title? I am asking because I would like to identify people who are part of a bigger problem.

Ray, have you looked at every other fact and statistic in the industry? Have you seen the stats collected by NDP and their competitors? I doubt you have, because had you understood the real issue here, you would not have made an uneducated rebuttal.

Stating that the author is brushing aside this report because he does not understand how to read stats is a childish insult towards the author rather than an educated and valid comment.

I work for a firm that collects and analyzes data for several different industries, and NDP is one of our clients.

Yes, NDP is a well-respected agency, but all those employed by agencies like NDP and my employer are “experts” in one thing only, auditing. We look at the stats that we are commissioned to collect and then we create reports based on those findings alone.

If there are any other stats that we did not collect, then they are exempt and considered void.

When it comes to reporting on items like automobile sales or the correlation between automobile color and collisions, than this method still holds some merit, but with industries like music and movies, where there are too many cultural variables to consider (which are NOT collected), it is simply a faltered system.

Seeing that the author seems to work in the music business (from what I can tell on this blog), I’m sure he deals with all the facts and figures involving HIS industry on a daily basis, and rightfully has an educated disagreement with a “field marketing expert” who specializes in none of the industries he reports on.

I’d highly recommend you educate yourself on ALL the facts before dismissing the author’s opinion in an insulting manner.

Ray Boule March 12, 2009 at 1:25 PM

Thomas;

I do not work in the music business at all. Actually, I have been a personal acquaintance of Moe’s for quite a few years and it was not my intention to be insulting to him in the least.

Putting words in my mouth does not serve your point very well, Sir and is childish in its own right. I never said that he does not “understand how to read stats” – where do you get that from my post?! The stats were not even there to read! I am not even going to reiterate what I said because it is right there in black and white.

Regardless of whether or not stats were or were not collected are for none of us to know as none of us have seen the report that Mr. Analyst is commenting on.

My point was that the industry itself should not brush aside data because it does not indicate what they want to hear! That the data perhaps needs to be studied “more carefully” (as per my post) prior to dismissing it as ridiculous shouldn’t be insulting to anyone!

Claudia Caponi March 12, 2009 at 6:05 PM

Great post Moe! I agree with Thomas that there are too many other variables involved in the Music and Tv industries for NDP’s research to be accurate. They shouldn’t be reporting these statistics. This is a perfect example of what we were discussing the other day.

james March 12, 2009 at 9:09 PM

lol @ thomas’s ether to ray

Francois March 12, 2009 at 10:23 PM

I think the point Moe was making and i was (sarcastically i admit ) is that it is shocking to hear such comments from NDP Group. The fact that NDP collects data is irrelevant by it self. I believe that the common saying Knowledge = power is false. In order for it to be true we need to analyze the data set with context and against an array of variables. The editing of the video does not show NDP’s entire finding and that is a shame.

To say that internet piracy has less significance then people sharing cd’s and hard drive is foolish and misleading on the behalf of NDP ( My opinion) .

I actually really want to read the report now …. i think only then by looking at what dataset they analyzed we’ll be able to truly say where they missed ( because it is my deep believe that they really did messed up)

what makes me laugh is the statement that people copy more cd’s and trade hardrive.

ok lets not look at the hard drive stuff cause thats what p2p is but lets look at the CD statement.

Yes true most people have 5-6 cd’s in their car, but these are often burned CD’s. NDP simply does not have the capabilities of compiling the basic data sets needed to back their statement. In order for this statement to have any validity NDP would need accurate data on :

song copied from on cd to an other
songs copied from one cd to a computer to an other cd
songs copied from one cd to a computer to a p2p or torrent
songs copied from a cd to a computer to a cd
songs copied from a cd to a computer to a p2p or torrent to a cd
songs copied from a cd to a computer to a cd to a computer to p2p to a CD
should i go on lol

I truly find it shameful that such a company would make such bold statement on something that they simply CAN’T have solid empirical evidence. I understand that companies like NDP often get commissioned to make these market researched but I think that their bias or their client bias obviously altered their interpretation of their findings. This is unacceptable and truly scares me as a marketer who relies on accurate data from “reputable” companies like NDP.

UKP May 28, 2009 at 6:23 PM

I think that sharing hard drives and copying cds is more harmful than P2P. For example, I copied 150Gb worth of music from a friend whilst at university. Since that day, I have both stopped purchasing music and downloading it. The reason is I simply have to much music.

Any new music I aquire is from artists who send me music for free.

My father never illegally downloads music, but occassionaly purchases music. Since meeting his new partner, they have copied each others whole CD collection onto HD/MP3 player/CD.

P2P is to scary for n00bs, and to dishonest for many. ‘Borrowing’ a cd then ripping it to HD is percieved as less dishonest than downloading music illegally.

I both produce music and have been researching music sales for business purposes. From what I’ve read, the comments made by the guy from the NDP are accurate.

Just because we don’t like what we hear doesn’t mean it is not relevant….

UKP May 28, 2009 at 6:29 PM

Furthermore, if you think about the fact that a significant amount of people listen to music over the radio whilst working, or going to and from work, one begins to see that mp3 player/computer/hifi consumption of music is less significant.

I beleive that many of the people who listen to music at work are more likely to get home and watch TV (or do other things) than to listen to more music.

ronny May 29, 2009 at 2:22 AM

to the above commenter (ukp), i don’t think the author was saying borrowing cds is not happening. the title of the post is “piracy not to blame for decline in music sales?” with a question mark. he’s posing a question about the stats the guy in the video discussed. copying cds and hard drives is still piracy. i think that’s what he meant.

UKP May 29, 2009 at 6:09 AM

You are correct that it is still piracy, but likewise, market saturation due to the availability of music (legal or otherwise) is just as likely to effect sales as piracy.

Remember those fads when you were a kid. As soon as everyone had had enough of the product, people simply weren’t interested in buying the product any longer.

Francois May 29, 2009 at 7:29 AM

OK UKP all i got to tell you is this. You copied a hard drive of 150GB. If you assume that each song is 5MB (mp3 format) that is 30 000 songs !!!!!!! Are you telling me that your friend bought 2500 CD’s (30 000 / 12 songs) decided to spend hours to transfer everything on a hard drive and then gave it to you ? NO ! What probably happened is that he bought a few the rest he DOWNLOADED on the internet. So by default you also downloaded music since he originally downloaded it. The big difference is that he went through the work of downloading it and you took the easy way by simply copying a massive library in a few minutes. If your friend did in fact buy 2 500 cd’s congratulations for him !!!! and shame on him for sharing so many CD’s. I have downloaded music yes !!!! but i NEVER uploaded music to be downloaded.

UKP May 29, 2009 at 12:14 PM

I’m not sure where he got his music tbh. You’re right in saying some of it had come off P2P etc whilst he was also at uni. I think he too had copied a large chunk of music from other peoples HDs.

When I was a teen, I struggled to raise £15 for a CD, and what money I did have went on tickets for live events instead. I gave my brother my entire CD collection (150 CDs all bought for cash) two years ago, mainly because I now have more music than I will ever listen to.

In truth, if I want to find new music, I search and listen to it on Myspace or Youtube. Likewise, I’ve stopped downloading stuff because everything I’ve everwanted is now sitting on my HD.

My guilt is starting to make me pay for the software I’ve downloaded over the years, but only the stuff I actually use. Most of it got deleted after deciding I didn’t like it. Why I didn’t try the legal demos to begin with I don’t know. something about the idea of something for nothing is appealing.

Also, I’m starting to program my own software, so I’m begining to appreciate that nothing comes for free. Underdstanding the effort that goes into commercial releases allows me to empthise somewhat more than when I was a teen.

kris May 30, 2009 at 1:55 AM

No matter how you might look at piracy it is happening every minute either buy illegal downloads or file sharing online. Therefore causing the music industry to fail towards gaining any grounds on it’s profit margin only showing that it will no longer be around in another decade or so.

Steve October 21, 2009 at 12:04 PM

Lol you’re all wrong!

Copying cd’s, downloading mp3, none of that’s to blame, music isn’t the main thing in people’s lives anymore.

Music is dying because it’s s**t.

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