Business Stupidity

Most people would think that 'common sense' is readily apparent to anyone with even a nominally functioning brain. Everyone has had a 'lightbulb moment' or a time when they feel stupid for not thinking of something earlier – because 'it's just so simple and makes so much sense'.

Well, it really seems that executives in the recording industries and their attack dogs in the Recording Industry Association of America (RIAA) have a level of brainpower that is registering as the lowest ever recorded. What they fail to understand about digital music downloading – and why consumers flock to it, is a depressing mystery.

It has been a scant three years since Apple unveiled the iTunes store. The sale of the billionth download indicates that consumers have become comfortable with digital technology, said Frost & Sullivan analyst Zippy Aima. "Apple has redefined the way digital entertainment is made available to consumers," Aima said. "That iTunes has reached a hallmark of selling a billion songs is an indicator that the buying behavior of consumers is changing and they are ready to pay for good quality music."

Sales of digital music skyrocketed in 2005, increasing 190 percent to $1.1 billion, at which point digital music accounted for roughly 6 percent of all music sales worldwide. Some 20.7 million users visited the iTunes store in December 2005 alone, according to Nielsen/NetRatings. By July 2004, the iTunes service had sold 100 million songs and reached 200 million by the end of that year. Seven months later, the service recorded its 500 millionth sale. That amount has once again doubled in the past seven months.

Rather than embark on a truly energetic and innovative process that would enable their hidebound music companies to COMPETE, these executives continue to threaten their customers with lawsuits and jail time. Doesn't Business 101 teach that driving customers away does not lead to long term viability? CD sales are hitting record lows in the U.S. and will not get better. Much wasted attention has been directed towards the downloading of songs from file-sharing services, 'piracy' in the RIAA vernacular.

The reason file-sharing is so popular has nothing to do with being able to get the songs for free as the vast majority of people are totally willing to pay artists for their creations. What people refuse to pay for are crappy CD's (costing $10-$20) that contain one good song and twelve rotten ones. People want to be able to obtain songs individually – not half baked bundles created by 'music marketers' trying to foist the next new craze onto consumers. What is so difficult to comprehend?
Posted on The Human Stain