This very good, short article shows the way that the RIAA cooks its books to create losses due to file-sharing when there's no indication that file-sharing is costing them money. Peter sez, "I'm an economist researching the issue too, and I've found the figures frankly unbelievable for a long while. Now I know why."
There is only one logical integration of all these statistics with the recent Soundscan data: even though actual point-of-purchase sales are up by about 9% in the US – and the industry sold over 13,000,000 more units in 2004 (1st quarter) than in 2003 (1st quarter) – the Industry is still claiming a loss of 7% because RIAA members shipped 7% fewer records than in 2003.
Forget the confusing percentages, 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."
I'll go a step further. This fact, that Sherman seems to confirm, should logically mean a smaller percentage of returns. But, shouldn't fewer returns mean higher profit margins and faster turnaround; and shouldn't that be good for both the retail and wholesale side of the industry? "Sure," admits Sherman today, "but I have no idea what US shipments looked like in the first quarter." Then how can he claim world-wide "losses" in his March speech to Financial Times New Media?
(Thanks, Peter!)
