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Here we'll explore the nexus of legal rulings, Capitol Hill policy-making, technical standards development, and technological innovation that creates -- and will recreate -- the networked world as we know it. Among the topics we'll touch on: intellectual property conflicts, technical architecture and innovation, the evolution of copyright, private vs. public interests in Net policy-making, lobbying and the law, and more.

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Copyfight

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March 31, 2004

Is Hollywood Undercutting Music Sales?

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Posted by Jason Schultz

[ed-Sorry for the lack of links/source. This was sent via email. I think it's from Variety.]

Update: here is the link to the Variety story, although a subscription is required to see the whole thing.

By MEREDITH AMDUR
Is Hollywood to blame for the music industry's woes?

According to market research group NPD, it's not just illegal downloads of electronic MP3 files that are eating into traditional music sales but the ever-increasing popularity of DVD movies.

In a survey of consumers who admitted to spending less money on CDs in the last year, some 21% blamed an increased spending on DVDs for their reduced appetite for CDs. Only 15% of respondents blamed their DVD habit in the same survey a year and a half earlier. NPD noted that the increase was the largest single jump in its survey. At the same time, the number of consumers who cited downloading as their excuse for lower CD spending fell from 30% in 2002 to only 21% this month.

NPD, which just finished up a study into understanding why people are buying less music, said the chief reasons remain the high price of CDs (48% cited) and the general quality of content available recently (42%).

One household entertainment budget

While music and movies are vastly different pastimes, NPD analyst Russ Crupnick argues that the decline in CD sales is increasingly attributable to the rapid rise in DVD sales. (Similarly, many publishers believe the lure of inexpensive DVDs, available in big chains like Borders, has eaten into book sales.) Researchers note that purchases and rentals of movies and music, along with videogames, typically come out of the same household budget for entertainment, so an increase in one can have a direct impact on the other.

"As DVD prices fall, especially for catalog titles, the price-to-value proposition only gets higher," noted Crupnick.

NPD reported that the average full length CD sold for a still-hefty $13.47 in the fourth quarter of last year. This price represents a fairly modest 2% reduction from the same period in 2002 and 4% down from 2001. Many DVD movies can be purchased for $15 or less.

Comments (1) + TrackBacks (0) | Category: IP Markets and Monopolies


COMMENTS

1. Barry Ritholtz on April 20, 2004 4:41 PM writes...

I've been beating this drum for some time now:

Its important to ask: If CDs and DVDs sell for the same price, why would anyone buy CDs?
(http://bigpicture.typepad.com/comments/2003/12/music_sales_ris.html)

Its simply insane for the music industry to constantly blame P2P, while charging the same amount for 45 minutes of Audio only as 2 + hours of Audio/Video . . .

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