Moses Avalon posted a great US article on interpreting the RIAA’s figures.
When the RIAA discusses sales, they mean shipments to retailers, *NOT* purchases by consumers. While shipments to retailers may be down, sales to consumers as measured by Soundscan are actually *UP* .
bq. There is only one logical integration of all these statistics with the recent Soundscan data: even though actual point-of-purchase sales are up by about 9% in the US – and the industry sold over 13,000,000 more units in 2004 (1st quarter) than in 2003 (1st quarter) – the Industry is still claiming a loss of 7% because RIAA members shipped 7% fewer records than in 2003.
He then goes on to make an interesting point that if shipment to retailers are down, but sales are up that means that labels margins should be up, since they have a lower percentage of returns to process.
bq. I’ll go a step further. This fact, that Sherman seems to confirm, should logically mean a smaller percentage of returns. But, shouldn’t fewer returns mean higher profit margins and faster turnaround; and shouldn’t that be good for both the retail and wholesale side of the industry? “Sure,” admits Sherman today, “but I have no idea what US shipments looked like in the first quarter.” Then how can he claim world-wide “losses” in his March speech to Financial Times New Media?
The best line in the piece is probably:
bq. My pithy rebuttal: No, it’s like acknowledging what most retail industries have been doing for the past ten centuries; theft (even by employees) needs to be built into the cost of doing business, and file-sharing has forced the record sales side of the industry to finally adjust to that dynamic. Should we thank the “thieves?” No, but we shouldn’t let off the hook those who blame others for “losses,” only to ask Congress to legislate fix-its due to their own mismanagement.
It’s a lot to think about in a business environment where companies like Dell and Wal-mart are constantly driving the pass of inventory management, and efficiency in the supply chain.
RIAA Lying With Statistics
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Moses Avalon posted a great US article on interpreting the RIAA’s figures.
When the RIAA discusses sales, they mean shipments to retailers, *NOT* purchases by consumers. While shipments to retailers may be down, sales to consumers as measured by Soundscan are actually *UP* .
bq. There is only one logical integration of all these statistics with the recent Soundscan data: even though actual point-of-purchase sales are up by about 9% in the US – and the industry sold over 13,000,000 more units in 2004 (1st quarter) than in 2003 (1st quarter) – the Industry is still claiming a loss of 7% because RIAA members shipped 7% fewer records than in 2003.
He then goes on to make an interesting point that if shipment to retailers are down, but sales are up that means that labels margins should be up, since they have a lower percentage of returns to process.
bq. I’ll go a step further. This fact, that Sherman seems to confirm, should logically mean a smaller percentage of returns. But, shouldn’t fewer returns mean higher profit margins and faster turnaround; and shouldn’t that be good for both the retail and wholesale side of the industry? “Sure,” admits Sherman today, “but I have no idea what US shipments looked like in the first quarter.” Then how can he claim world-wide “losses” in his March speech to Financial Times New Media?
The best line in the piece is probably:
bq. My pithy rebuttal: No, it’s like acknowledging what most retail industries have been doing for the past ten centuries; theft (even by employees) needs to be built into the cost of doing business, and file-sharing has forced the record sales side of the industry to finally adjust to that dynamic. Should we thank the “thieves?” No, but we shouldn’t let off the hook those who blame others for “losses,” only to ask Congress to legislate fix-its due to their own mismanagement.
It’s a lot to think about in a business environment where companies like Dell and Wal-mart are constantly driving the pass of inventory management, and efficiency in the supply chain.