Monday, August 04, 2003

Real pirates are the threat to the RIAA

As the RIAA hides behind statistics of dwindling CD sales and launches a massive campaign to turn teenaged file swappers into felons who lose their voting rights, the numbers are actually telling a different story about why sales are slumping. According to the BBC, real pirates selling bootleg CDs are bigger culprits.

Some stats from the article:

- Every third CD sold is a pirate copy.
- Pirate CD sales rose 14% in 2002, exceeding over a billion units.
- Competition in the counterfeit market has the price of CDs down to $4 each.
- 90% of CDs sold in China are bootleg.

And here’s the kicker:

- Major record labels and distributors have been fined twice by the US Federal Trade Commission for price fixing their products.

Is the RIAA fighting the right battle? I mean, I’m all for artists earning a living when there’s a market to support their livelihood. But when you look at how much the artist sees of the $17 price of a “legit” CD, I no longer buy that line of moral justification for the RIAA’s actions. (Keep in mind that the “illegal” bit about P2P file sharing is an uncollected royalty fee of 8 cents per song that goes to the copyright holder, which, depending on the recording contract, may not even be the artist!)

Recording industry greed and lack of competition have created an unsustainable price point for CDs, the losers are the consumers and the artists. The market adapts with a huge incentive for counterfeiters to jump in, and the artists get hurt even more. Come on, RIAA, bring the cost of legit CD’s down to $5 where they belong and the piracy problem goes away.

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