Data: Music Meltdown
Ever since Napster mainstreamed unauthorized sharing of copyrighted materials, record labels have been singing the blues -- and for pretty obvious reasons. The October issue of Wired reports that overall revenue for prerecorded music in 2002 was $12.3 billion, down 13 percent from a high of $14.2 billion in 1999. The labels (and many artists) chalk all the bad news up to copyright infringement -- economists estimate that illegal downloads cost the industry as much as $1 billion a year -- and have taken to suing individual malefactors.
But Wired's Rebecca Harper notes that a good chunk of the decline stems from the music biz's own actions. It has steadfastly raised prices on CDs while releasing less new music. "Hey labels, want some unsolicited advice?" she writes. "Give the people what they want: more music at cheaper prices." The world's second largest label, Universal Music Group, has gotten the message; it recently announced it was trimming its CD prices by one-third.
CHART: Music Industry Trends
CD Prices New Releases (in 1997 dollars)
1997 $13.19 33,700
1998 $14.09 33,100
1999 $14.45 38,900
2000 $15.02 35,516
2001 $15.32 31,734
2002 $15.25 33,433
Source: Wired
