Jersey has often claimed that its on-line fulfilment industry competes with the music download market run by the likes of iTunes. This explanation is, of course, offered to divert attention from the fact that it only exists to undermine the legitimate UK on-line and retail market in CDs and DVDs.
New research from Forrester (who are well respected in this market) suggests music downloads are not a threat to CD sales after all. Internet sales of CDs are rising though. And some of this is because of the use of offshore, I suspect.
In that case it's no longer possible for Jersey to say its competing with a different market sector. As usual it's simply deceiving itself and others when making this case. The reality is that it is destroying real business, real value and real government revenue in the UK. That's not playing on a level playing field. That's providing a facility for what is tantamount to theft in my opinion.
Strong language? Maybe. But while the dividing line between evasion and avoidance is porous, and with the ECJ in its current mood, who knows if the UK's failure to tackle this abuse is legal or not right now. I doubt it is. In which case my opinion would be justified.
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What else would they be competing with?
I thought the article made that clear – the UK legitimate retail trade
I’m sure they will argue – as did the original piece – that this is a CD v iTunes play. In the wider sense though you could count Amazon, BitTorrent, eBay, PodcastNetwork and a myriad other players.
Analysts get it wrong 19/20. But that’s OK. They can susvive on a 5% hot rate. This is only an uplift thing. CD sales have been declining year on year for some time and the person making the remark about ‘no real competition’ has a position to sustain so they would say that (wouldn’t they?)
If Apple succumbs on the DRM front then it knocks a huge hole in all CD retail including Jersey. But it also opens the door for Jersey to act as a download distribution centre. Now that would be interesting.
But to be accurate on this – the trade exists because there’s a loophole that’s yet to be firmly plugged. Ever it was so.
Well…..this is where theory crossess over into consumer reality…badly. I’ve sold music for 20 years and I have yet to meet anyone who spends a fortune on downloads. I know many, many people who spend a fortune on CD’s and even vinyl, which still sells. The whole download argument was driven by record company greed. “Wow, we can sell the music but we don’t have to make anything! Fantastic !” Unfortunately consumers are not that stupid. I know what I’d rather have a collection of. Want to buy my download collection ?
From ComputerWorld: quotes Forrester –
What follows is a case study in how information — and misinformation — spreads on the Net.
…
We got treated to wonderful headlines about iTunes sales “collapsing” and “dropping” and “plummeting” and so on. Now for the record, iTunes sales are not collapsing. Our credit card transaction data shows a real drop between the January post-holiday peak and the rest of the year, but with the number of transactions we counted it’s simply not possible to draw this conclusion . . . as we pointed out in the report.
Downloads are a $1bn a year business for Apple.
To Richard Allen’s point: “I have yet to meet anyone who spends a fortune on downloads. I know many, many people who spend a fortune on CD’s”
Well of course not. When I can buy 10 tracks @ 79p that give me EXACTLY what I want to hear, I’ll buy it. I just don’t have to buy the 3-4 CDs that contain the stuff I’m not interested in. ergo – I don’t spend a fortune but get what I want.
Interesting but it still doesn’t change the underlying message of this report which is that we are NOT about to suffer the equally distorted argument that downloads will replace everything. At one point record companies were rubbing their hands with glee thinking they could do away with packaging, distribution etc. and ranting on about the death of traditional music retail. Maybe sales of downloads are not plummeting but I understand they are not booming either. Your point about convenience also raises another issues. As a specialist music retailer the bulk of my customers are people who spend a great deal on music. The buyer that purchases the odd track when they want to hear it really isn’t the customer that suports our business. The music industry is fuelled by collectors. Collecting is not dead. Obviously there is a market for the kind of customer you refer to but it’s a different one. If downloads satisfy the casual buyer who just wants what they want, when they want it then that is of course a good thing for them (not so sure about it’s beneficial implications for the artist) . There is a big difference between that and replacing CD’s or challenging the traditional music retail market. Also with no transferrable value there is no collectors market in downloads. The collectors market in second hand music product alone is huge. So in other words there isn’t really a cross over here which brings us back to mail order CD’s vs. downloads. The argument that downloads are killing retail is a false one. They cater to two different markets entirely. The biggest threat to sales remains free downloads and boredom. The latter is incurable but the former is the fault of the people that designed the digital format without thinking it through. You couldn’t copy an LP and retain the quality.
Question :
Option 1) Would you buy 10 downloads of individual tracks by artists that you really liked at 0.79p each (total £7.90)
OR
Option 2) would you buy a physical album at £7.90 that you really liked ?
In my view most music buyers would go for option 2) as they could keep the album and enjoy it together with it’s packaging, or copy it and re-sell it (possibly at a large profit if it became collectable)
I can’t see the appeal of option 1) outweighing option 2)
That’s the argument really….
These are interesting points Richard but I wonder whether you’re talking to a segment of the market rather than the market as a whole? Niches are well understood as types that run counter to ‘normal’ trends and tend to be more robust than their mainstream equivalents over the long haul.
Option 1 for me. But I’m no longer a collector.
As an aside, I wish I’d known about you six months ago – I had to ditch a collection because I couldn’t get rid of it when moving house! It’s a pity but that’s life I guess.
I agree with Richards comments. I use technology for most things because of its speed and efficiency, yet I would not dream of replacing CD/LPs (yes I admit I have some LPs) with downloads.
I still like to be able to see what I have bought, you know, packaging and all.
Yes Dennis we are definitely in a niche, but then X Factor is unfortunately the mainstream. Totally different markets. I think the new technology is exciting and I use an ipod although I have to say the bulk of my use is listening to stuff from my collection that I put together on my PC. I see an ipod as a more convenient walkman (and I’m old enough to remember the annoyance of a track not fitting on a cassette) Does anyone recall the “Home taping is killing music” campaign ? Unsurprisingly it didn’t…. if anything it had the opposite effect as I heard many albums on tape and then bought them on LP/CD. There is even more choice now but the hysteria over downloads replacing retail now seems to be coming to an end and we can see where they really fit in the market. Anyhow I hope we are all agreed that it’s got nothing to do with Channel Island mail order VAT avoidance which was the original point!