New York Times – April 5, 2007:

In the late ’90s, our business, and the music retail business in general, was booming. Enter Napster, the granddaddy of illegal download sites. How did the major record labels react? By continuing their campaign to eliminate the comparatively unprofitable CD single, raising list prices on album-length CDs to $18 or $19 and promoting artists like the Backstreet Boys and Britney Spears — whose strength was single songs, not albums. The result was a lot of unhappy customers, who blamed retailers like us for the dearth of singles and the high prices.

Something had to be done to save the record store, a place where hard-core music fans worked, shopped and kibitzed — and, not incidentally, kept the music business’s engine chugging in good times and in lean. Who but these loyalists was going to buy the umpteenth Elton John hits compilation that the major labels were foisting upon them?

But instead, those labels delivered the death blow to the record store as we know it by getting in bed with soulless chain stores like Best Buy and Wal-Mart. These “big boxes” were given exclusive tracks to put on new CDs and, to add insult to injury, they could sell them for less than our wholesale cost. They didn’t care if they didn’t make any money on CD sales. Because, ideally, the person who came in to get the new Eagles release with exclusive bonus material would also decide to pick up a high-speed blender that frappéed.

The major labels wanted to kill the single. Instead they killed the album. The association wanted to kill Napster. Instead it killed the compact disc. And today it’s not just record stores that are in trouble, but the labels themselves, now belatedly embracing the Internet revolution without having quite figured out how to make it pay.



  1. dan says:

    So true. I was a big music buyer in my 20’s and 30’s, then moved away from it when you had to buy an entire album to get 2 good songs. Now in my 50’s, I discovered allofmp3 last year, and got the bug again. Songs ranged from 10 to 20 cents, and you could listen before you bought. An amazing impulse buying frenzy ensued. I bought $50 worth of songs before I knew it, ripped my own CD collection, and started ordering CDs from Amazon that I couldnt find, and became an enthusiast again. Then they shut down allofmp3, and the last CD I ordered from Amazon had copy protection on it–worthless to me since I couldnt rip it to my collection. My music buying stopped completely. And dont tell me I can now buy some singles without DRM for $1.30 on Itunes. That is not an impulse buy, and I dont want Ipod/Imusic to take over my music collection.
    If the record labels had just opened their own version of allofmp3, nobody would be downloading crappy illegal songs or even ripping borrowed CDs. To save 15 cents? To get the exact song you want at the quality you want? The worldwide revenue would have ramped into the billions a year with low overhead.
    Idiots.

  2. jccalhoun says:

    Well when the music store charges $18.99 for the same cd that Wal-Mart charges $11.99 it is no wonder why music stores went out of business.

    The only music stores I’ve shopped at in years have been ones with a large selection of used cds.

  3. We know that the RIAA has screwed artists all along, here’s a story about them screwing those who distributed their music, which is their only strength. We know that they’ve screwed their customers via root kits, so I wonder if there’s anyone left for them to screw.

  4. ArianeB says:

    Lets not forget their current campaign to kill Internet Radio the last bastion of independent music promotion. Innovative sites to hear music and find new artists that you may like, like Pandora, Launchcast, Finetune, etc. will be the hardest hit under the royalty pricing scheme of the Copyright Review Board.

    http://www.saveourinternetradio.com/

  5. Mr. Fusion says:

    Good find SN.

    So what will replace the RIAA after they are dead and gone?

  6. Pfkad says:

    #3, It seems that they’re beginning to screw themselves. Long overdue, but welcome anyway.

  7. pedro says:

    I couldn’t agree more with the article

  8. Greg Allen says:

    Thanks for this post! I hadn’t seen that part of the story told but it rings true.

    I’ve wondered why I can buy a CD so much cheaper at Costco than at a music store.

    IMHO, it’s all about price. If CDs cost $5, lots of people would start buying them again.

    Even at $5 isn’t there a lot of room for profit in a CD compared to, lets say, a gallon of milk?

    PS to #1 I think ALOFMP3 is a pirate site exploiting a loophole in Russian law When you buy from there I don’t think the artists get any royalties at all.

    I can still get allofmp3 over here in Dubai but I’m very reluctant to give my credit card number to a Russian company. Weren’t you?

  9. tallwookie says:

    This is where I laugh at you people who actually pay for music.

    HAR -DE-HAR HAR, ROFL!!!!!

    Seriously though – you want to listen to music? goto a Bar or a Pub or a Venue or something where you can enjoy the music itself, and you dont have to worry about supporting a failing record industry (unless the concert is sponsored by a recording label – in which case, you are (to quote Bender from Futurama) “Boned” ).

  10. mike says:

    The sooner the RIAA are dead and gone the better I have been in broadcasting 40 years and never have the prices been so high for a station that cannot accommodate more than 500 listeners at one time ie the small internet broadcaster It is time for all internet stations to hit back and squash these destructive with no apolagies b””””””s.

  11. stuart says:

    You got 2 good songs on your CDs, Dan? I was only getting one per CD. I stopped buying at that point. The whole Sony rootkit fiasco only drove the final nail in the coffin as far as buying CDs goes. The problem with the RIAA is they became a greedy corporate monster that thought suing their customers was the way to profits instead of doing what every good business knows to do which is to give the customer what they want and make a profit doing it.

  12. ECA says:

    Funny that I have been preaching this in ALL the debates over DRM and the music industry trying to Shoot everyone.

    Just becuas of their Incompetance, WE PAY.
    Just cause Kmart can buy 1000’s of a label, means the Little store on the corner that ONLY buys what can be sold, has to pay MORE.
    An OLD Vynl Album cost $10…
    A TAPE cost $10
    Why in ALL the world does a CD cost $12-20.??
    There is LESS, handling, smaller size, Less packageing, Lower shipping cost, and ALOT less advertising…
    And ALOt more profit.
    The only thing that could raise profits MORE, is sending the albums by Email to distributours in the AREAS/States they are to be released.
    what REALLy gets my goat, is that with the Advent of the internet, we could have the WHOLE library of recording available, from AROUND the world, and from the inception of the recording industry…
    But, we have to WAIT for Time-Life to release them on 2am TV.

  13. mike cannali says:

    #10 “The sooner the RIAA are dead and gone the better ”
    Bravo – may we call upon everyone to download from offshore sites as much as possible, to transcribe all our CDs to MP3, sell the CDs on Ebay so others can do the same ,and trade the megafiles of mp3s for free with friends (thats what a 100GB portable drive is for right?). Then a mass mailing campaign to tell the record execs that this is protest until their business model changes.
    Make sure the entire movement is public, so strockholders can understand the public disgust with the MPAA / RIAA and Itune’s rent a song scam.

  14. TJGeezer says:

    4 – When I wrote to Sen. Diane Feinstein, co-sponsor of that RIAA-whore bill, she sent a stock b.s. reply about having to protect the interests of the artists and copyright owners. As if the major labels do a thing to protect the artists.

    California politicians are pwned by the off-shore RIAA giants, but Feinstein is worse in that regard than most.

    13 – if you want to start a campaign, don’t forget to rake Feinstein over the coals. Serious voter disgust is the only thing likely to shake that voluntary RIAA punk’s tree.

  15. ECA says:

    13,
    WHOM are you talking about…
    The RIAA ONLY has protections IN the USA…
    They have NO power outside the USA, PERIOD.
    Europe, acknowlegdes the copyrights, MOSTLY, only so that WE, in the USA, will do the SAME for theirs.

  16. BubbaRay says:

    One friend commented the other day that CD’s are dying because it’s just too much trouble for geezers folks to get the darned packaging open :)

    #9, Comment by tallwookie — 4/9/2007 @ 9:06 am
    Well, there ya’ go. Sometimes I might even buy a CD the group is selling at well less than $10. And sometimes a friend might actually buy you a beer at the pub. Winners all around.

  17. ECA says:

    13,
    Dont you KNOW that the Music Corp PAYS most radio stations to broadcast ONLY certain music.
    And if you Play anything else, you have to pay the royalties, OUT your EAR.(good joke).
    And NOW they have passed a law, that Internet services that broadcast music(copyrighted) insted of paying like $2000 for 1 year, are going to NEED to cough up something like $2,000,000 EACH for all the popular music…EVEN if it hasnt been published in the LAST 10 years…
    So, NOW you wont hear much copyrighted material On the internet, that has been registered Thru the RIAA from the music Corps…And WHOM is going to check this LIST of artists??
    What the RIAA is doing, is getting the USA GOV. to do the Work, insted of THEM running around Sending Lawyers and notices…

  18. Greg Allen says:

    I disagree with you guys about only one good song being on a CD thing.

    You guys must have crappy taste in musicians! ;-)

    Most of my favorite artists can put together a full CD of good material. Sure, I like some songs better than others on their CDs but they aren’t one-hit wonders.

  19. OhForTheLoveOf says:

    I’m with Greg in #18

    But really, it isn’t that most people don’t have good taste or bad taste… but rather, they simply have no taste. That’s not an insult. What I mean is that they don’t listen critically. To many people, music is background sound for other things.

    People hear a song on the radio with good hooks or something in a soundtrack that catches their fancy and when they buy the album, the music out of context doesn’t have the impact that the single had when they heard it.

    In fact, had they heard the single in a different context, they might not have noticed it at all.

    The music industry has done such a bad job of selling artists that it is wonder people don’t care about music. It’s too bad. Some of the best music ever written is available right now as new releases… all from bands that will get zero radio airplay.