Friday, May 14, 2004

RIAA's shady accounting

Boing Boing has a great post on how the RIAA is cooking its books to make it look like online P2P activities are killing CD sales and destroying profits.

Boing Boing links to this article at Kensei News that has some very interesting and detailed facts about what exactly the RIAA is doing.

From the article:

"- For the first quarter of 2003 Soundscan registered 147,000,000 records sold.

- For the 1st quarter of 2004 Soundscan will report 160,000,000 records sold.

The RIAA reports a sale as a unit SHIPPED to record stores. Whereas Soundscan reports units sold [to the consumer] at the point of purchase. So, you're talking about apples and oranges.

Sure enough, every time the RIAA complains of large drops in "unit sales" it includes international sales, not strictly domestic. Every time it speaks to domestic "losses" it is speaking ONLY of "units shipped in the US" to record stores. It seemed obvious that if the RIAA confined their revenue statistics to the US market alone they may not be able to publish ANY losses in REVENUE at all.

. . . here's an oversimplified example: I shipped 1000 units last year and sold 700 of them. This year I sold 770 units but shipped only 930 units. I shipped 10% less units this year. And this is what the RIAA wants the public to accept as "a loss."

So this article begs the question: Are there real losses from P2P? Who knows?! The RIAA has everything so confused, that is entirely impossible for the public (and maybe even the RIAA) to figure out exactly what's going on.

Here's an idea for the RIAA: take the money that you're spending with attorneys to sue your best customers (all that press you are getting is not good advertising; forget the old adage of "Any press is good press."; what you are getting is very bad press) and spend that money on developing some awesome new artists that have more than one or two good songs on a CD. Take one of the best tracks from one of those new artists' CDs and release it yourselves onto P2P networks a few days before the CD is about to come out to generate buzz.

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