Forrester Research recently released a study accusing online file sharing of costing $700 million in lost sales to the record industry … i’m not sure if i buy that number.
certainly, CD sales are declining … and certainly, online music file sharing (dare I say pirating) is increasing — but it is extremely hard to make the causal link between the two. … at least 90% of songs downloaded would have never been bought in the first place…
i think a bigger threat to the music industry is the efficient marketplace emerging of used CDs. today, it is as easy to buy a used CD as it is to buy a new one. and most $17 CDs go for $5 used.
Let’s say you are a big Madonna fan — you might go to Amazon to buy her greatest hits CD — The Immaculate Collection. But clicking on the Amazon link will show you that a new CD costs you 11.99 and a used CD costs you $3.99 — I’m personally choosing the used CD every time.
If you buy The Eminem Show on Amazon, it will cost you $14.99 new and just $4.99 used.
of course, the record companies do not profit from the now efficient used CD trade. but i can tell you that many people i know haven’t bought a new CD in over two years — but they are still buying the same number of CDs per year (they are just buying them used).