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Technology
Is Movies' Angel, but Record Industry's Devil |
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"If you walk into Best
Buy, Wherehouse or any of the other chain stores I've visited lately,
the CD racks are deserted--the action is across the aisle in the DVD
and video game departments. While the music business is in a tailspin,
trying to battle Internet piracy and fan alienation, DVDs have become
a giant cash machine for Hollywood.
Consumers are on pace to spend $11 billion on DVD sales and rentals
this year, making it the fastest-growing home-electronic product ever.
DVDs routinely make more money in their opening weekend than
comparable theatrical releases. Video games aren't far behind, with
sales reaching $6.3 billion last year, nearly double what they were
five years ago. The record biz, whose sales were off 10% last year, is
in such bad shape that even Entertainment Weekly's summer music issue
was full of ads ... for DVDs!
So why are movies and video games booming while the music business,
pop culture's trend-setter of the past several decades, is in such a
funk? The people who run record companies gloomily blame the Internet.
But if you ask music and movie lovers, you get a very different
answer. Consumers adore DVDs, which offer cool packaging and lots of
interactive extras; they loathe CDs, which they say are grossly
over-priced and padded with filler.
Pocketbook issues have a lot to do with DVDs' ascension. Two years
ago, most new DVDs were priced between $25 and $30. Now new DVDs sell
for $19.95, with hundreds of older movies going for $9.95 and $14.95.
But even though music sales are down, the record companies aren't
cutting prices-- in fact some CD prices have, if anything, gone up.
New CDs by everyone from Britney Spears to System of a Down go for
$17.99, with older CDs selling for $14 or $15. The only CDs that
regularly sell for $9.99 or 11.99 are by little-known new artists.
When I walked through Best Buy the other day, I was amazed to discover
that the DVDs for "Austin Powers" and "Rush Hour" cost exactly the
same as the movies' CD soundtracks.
New technology is supposed to create new revenue streams, as it has
with DVDs. But the music business views its new technology, the
Internet, as the enemy. With pop radio ruled by a handful of
conglomerates more interested in ad revenues than good music and MTV
abandoning music videos for lifestyle programming like "The Osbournes,"
file sharing has become one of the few ways for fans to hear new
music.
Unfortunately, the music business has spent more time trying to stamp
out file sharing than aggressively pursuing ways to make money from
it..."
Click here to read the full L.A. Times/Calendar
Live article. |
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