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Fall In Australian CD Sales Disguises A Lack Of Choice
by Alex Malik,

MusicDish Network Sponsor
The Australian Recording Industry Association has reported that for the first six months of 2005, the volume of recorded music product shipments to retailers fell 7.54%, while their wholesale value fell 11.82%. ARIA attributed the fall to a number of factors including the impact of charitable appeals following the Boxing Day Tsunami, and subdued general retail activity.

According to ARIA: "The reduction in sales has generally been felt across all format types including, for the first time, the music DVD format. This decline in music DVDs can be attributed, at least in part, to market maturity and near-total DVD player penetration."

While these factors may be relevant, a study of the new release patterns by the larger Australian record companies found that the number of CD albums, singles and music DVDs released by Australia's largest record companies has diminished by 33% over the past 2 years. The number of albums released diminished by nearly 37% for the 2 years, and the number of singles releases diminished by 44% for the same period. Music DVD releases increased by 17% over the same period. While the decrease in new releases was most pronounced from 2003 to 2004, in the first six months of 2005 there was a further decrease in major label new releases, especially new release singles.

This analysis was based on new release information included in ARIA's weekly ARIA Report, and provided by the 4 "major" record companies plus independent Festival Mushroom. The analysis compared CD releases for the first 6 months of 2005, to the first 6 months of 2004 and the first 6 months of 2003.

This analysis demonstrates a continuing major reason for the decline in sales in the Australian market ­ a reduction in choice for local consumers. When consumers can't find the CDs they look for other content like games or DVD films, which continue to sell heavily, and of course they buy CDRs and download tracks from the Internet. Sales of digital music players also continue to boom in Australia.

ARIA's mid year sales figures also surprisingly do not include authorised digital music sales. ARIA say: "The first half figures do not include digital music sales, including emerging sales of Śmastertone' ringtones. To date, comprehensive information regarding the value nd (sic) volume of the digital music market has not been available to ARIA . Initial reports suggest that this sector of the market is still relatively small."

This is a surprising statement.

Digital download sales figures are included in international sales figures. For example, RIAA in the US includes the value of digital singles and albums in their six monthly and annual sales figures. Download sales don't count towards the ARIA singles and albums chart, and unlike the US and UK there are no stand-alone download charts.

Websites that make tracks available as authorised downloads should be central to the business models for record companies in Australia and overseas. When record companies make tracks available as paid downloads they don't have to worry about artwork, packaging such as jewel cases, physical delivery, or traditional retail concepts like sale or return. There is no reason why many more tracks can't be released by the majors as paid downloads ­ even if in some cases there is no equivalent physical CD released. A large number of digital download exclusives could be just the thing to boost choice for consumers, while they help develop the existing authorised services currently provided in Australia. These paid downloads could then be included in Australian new release data and in the official sales figures.

While Australians await the introduction of an iTunes service in Australia (this thing is starting to take on a messianic feel), record companies need to embrace new business models and look towards the future. There is nothing to be gained by record companies and technology companies battling over the minutia of licensing deals, while recording artists continue to lose sales royalties, and music consumers continue to lose patience.

Provided by the MusicDish Network. Copyright © Tag It 2005 - Republished with Permission