THE PRICE IS WRONG...Sales of CDs were down 5% worldwide in 2001, according to the International Federation of the Phonographic Industry (IFPI). This is the first decline ever for CD sales and IFPI head Jay Berman says it's because "the commercial value of music is being widely devalued by mass copying and piracy."
Leaving aside the fact that the major labels actually profit from copying (a $2 surcharge on each CD burner sold and a 2% surcharge on every CD-R sold, none of the money shared with artists), we'd have to agree that Berman is essentially right. But no matter how often Berman and the other highly paid puppets of the music industry say music fans are criminals, the real problem is simply this: CD prices are too high in a world where incomes are too low.
In Brazil, one of the countries targeted for special crackdowns by IFPI, the average legal CD costs $11 while the average pirate CD costs $2. The minimum wage in Brazil is $70 a month. That's the equivalent of asking a Chicago McDonald's worker to cough up $141 for a Limp Bizkit CD. In Mexico, new CDs cost essentially the same as they do in the U.S., even though the per capita income is $29,185 a year less. IFPI says the problem in Mexico is "a lack of deterrent sentencing in the courts."
The same squeeze is happening in the United States, even if more slowly. Why are prices so high here? "The Federal Trade Commission ruled that the record companies have violated fair trade practices by intimidating store owners into not advertising CDs below a certain price leading to antitrust suits being filed by 28 of the 50 states against the Big 5," writes UCLA's Jack Bishop in his research paper "Who Are the Pirates?" "These practices have added over 500 million dollars to CD prices since 1997!" Meanwhile, the business section of every paper in America is filled with headlines about massive job losses. In March, U.S. banks had to write off 6.6% of all credit card debt as uncollectable, the highest amount in eleven years.
Proof that lack of money is the problem comes from India, where the major labels have cut CD prices by up to 50% to compete with pirates and sales have gone up 150% for Sony and 300% for BMG. In the U.S., Def Jam $2 rebate offer was a major factor in Ashanti's self-titled debut album toppling Celine Dion's A New Day Has Come from the top of the charts in April.
expect the major labels to fire sales in America, which accounts for 37% of the
world CD market. Jack Bishop summed it up in describing a letter from
recently-fired Grammy CEO Mike Greene in Grammy Latino: "[Greene, who walked
away from the Grammys with an $8 million buyout] concluded the letter with a
call to every citizen in 'even the smallest communities' to join in the battle
against piracy. In an exuberant display of self-importance, he is essentially
requesting that every man, woman, and child on Earth, despite their economic
reality, expend their energy and effort to insure the continuity of his
luxurious lifestyle. That is what is truly at stake." [Jack Bishop's "Who Are
the Pirates?" is at www.jackbishop.com].