What’s Really Causing CD Sales To Drop?

Do file-swapping and burning CDs really have an effect on music sales? Dan Bricklin, well-known to many for his co-creation of the first computer spreadsheet VisiCalc, put his number-crunching skills to work on the RIAAis sales figures for the last ten years. It seems heis found some interesting holes in the theory. In his essay entitled The Recording Industry is Trying to Kill the Goose That Lays the Golden Egg, he uses market research, the RIAAis own numbers and some good old-fashioned common sense to throw a spanner in the works of the anti-swappers: it seems that the people who do the most downloading are, in fact, the music industryis most loyal paying customers.

Bricklin explains the methodology behind his research:

When trying to understand peopleis motivation and behavior, introspection is inappropriate if you arenit one who thinks like those you are trying to understand. You need to use something else, like surveys, research, and real numbers dealing with how those people actually behave. Unfortunately, [Forrester researcher, Josh Bernoff] reports that "The music label executives we spoke with are so sure piracy is destroying their business, that they seemed strangely uninterested in the truth." Politicians who listen to such people do society and the musicians a disservice.

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I believe that there is a segment of the population that buys a disproportionate amount of the music (that old "80/20" rule). At least one such segment showed up in Josh Bernoffis numbers. According to the RIAA numbers, given the 239 million US residents over the age of 9 reported by the Census Bureau, the average person must have bought about 4 units of music in 2001, 91% of them CDs. If you didnit buy a lot of CDs before Napster (letis say, more than 6 a year) your feelings donit count, since you probably havenit downloaded music, and probably buy most of your music on impulse at concerts or such, or as gifts. What we want to understand are those people who always did buy most of the music and are now downloading. We want to understand those people who have CDs playing constantly in their lives: In their homes and as they stroll, commute, or travel.

From his examination of the figures, research and buying patterns, Bricklin concludes that "it seems the more you buy, the more likely you are to download and burn your own, or, to put it another way, the more you burn the more you buy." You can read Bricklinis report, including all the figures used and referenced, at his Web site. There is an enormous amount of information in this piece, and we strongly encourage anyone interested in music, digital rights, and Fair Use to take a look.

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