Digithoughts

A collective of music company labels suing file sharing service LimeWire recently released a chart alleging what their sales would have been had the infamous music sharing site Napster never been invented. The chart is being used in the labels’ lawsuit, and, based on their predictions, by 2008 US album sales (including legal digital singles) would have reached 7 albums sold per person, up from roughly 5.5 in 1999 when Napster first appeared.

Because of Napster’s introduction, the labels are claiming there has been a “$55 billion decline in record industry revenue over the last decade,” according to their brief.  But the decline of album sales can’t entirely be placed on Napster, or any other peer-to-peer file sharing service for that matter.

It’s been said before, but apparently the music industry still hasn’t heard or refuses to believe it despite all evidence otherwise: The music business’s fatal error was digging in their heels on digital. Napster was the result, not the cause.

Music formats have continuously evolved with new technology. We’ve gone from records to 8-tracks to cassettes to CDs to mp3’s to....the cloud? I even remember when mini discs were supposed to be the next big format. We’ve been sharing music via mix tapes and CDs long before the days of downloading. Moving music online was, in hindsight, inevitable. But the record companies saw this shift as a threat rather than a new format for their product, and did everything in their power to keep it from happening -- including ganging up and suing fellow label Bertelsmann (BMG) for investing in Napster in the beginning.

The record companies have also forgotten why digital downloads became so popular. At the time, album prices had been steadily increasing, despite the fact that CD production was significantly less than it cost to make an LP.  The music companies conveniently fail to mention what average price of a CD would be now, had Napster never come along. They will argue that prices went up because of downloading, but prices had already been going up; at best, this is a chicken-vs-egg discussion.  Nor does the chart factor in the recession, as sales steadily increase year after year.

As a coworker put it, the chart is “like measuring how many horses people would own if cars were never invented.”

If music companies had invested in digital music distribution, it would have been a new, lower cost way for them to market their product. No more paying for CD packaging, shipping, etc. Quality of online music would have been much better (no more Windows Media Player rips. Those were the worst!), with record companies potentially developing their own branded iTunes-type stores. Digital downloading services could have evolved alongside websites and other digital properties. As we’ve seen, the Internet has been incredible for marketing new bands and artists. Instead, fear overtook what could have been an amazing new era for the music business.

Where do you think would digital music be now if record companies had welcomed it with open arms?

Reena Leone Marketing and Social Media Coordinator

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