RIAA Takes Techdirt To Task

A new study on the state of the music industry released by Techdirt founder Floor 64 has riled up the RIAA, which called out the paper for being “highly misleading.”

The “Sky Is Rising” report presents a relatively optimistic view of the industry, noting that while revenues from recorded music are down, music production and consumption are up.

Fans may not be purchasing as many albums these days, the paper says, but they are connecting with artists’ music through crowd-funded projects, concerts, streaming services, TV, movies and video games.

“There are some predictions that digital music sales will eventually exceed CD sales and continue to grow, so the current slump for recorded music revenues may simply be a temporary part of the natural business cycle,” the report notes, adding that new models for music licensing and sponsorships are also helping to turn things around.

“The music industry is actually positioned to have a wide variety of income streams as more and more people gain increasingly convenient ways to listen to music.”

But the RIAA begged to differ, explaining in a post on its website that the report “doesn’t present an accurate or complete view” of what’s been going on in the music business in recent years.

First off, RIAA VP Joshua Friedlander writes, the “Sky Is Rising” fails to use actual music sales data and instead cites a “global sales metric that includes a much wider range of industries outside of music.”

Friedlander also finds fault with Techdirt’s use of Pollstar data to assert that touring revenues have increased over the past few years.

“It oddly omitted the important fact that concert revenues have actually declined since 2009,” he wrote. “In fact, in 2010, North American concert ticket sales dropped 15%, according to Pollstar.”

Finally, the report includes factual errors about Nielsen SoundScan data, Friedlander says.

“Regardless of the metrics you choose, the trends in the United States have been clear, with a market less than half as large as it was 10 years ago and 60 percent fewer employees in the music business. Virtually every neutral academic study … has concluded that there is real harm to the music community when people download music illegally.”

Techdirt’s Mike Masnick hit back at the RIAA’s criticisms in a post, calling them “pretty laughable.”

For one thing, the “global sales metric” used in the paper came from the IFPI – a sister organization to the RIAA, Masnick wrote.

He explained the “Sky Is Rising” pointed out concert revenues had tripled through 2009, meaning the touring industry “grew massively at the very same time that the recording industry insisted that the ‘music industry’ was dying.”

And, given the current global recession, “a decline in concert revenue over the past couple years is neither surprising nor a major concern,” Masnick said.

As for the RIAA’s claims that the music market is less than half the size it was 10 years ago, Masnick countered that – outside of the major record labels and recorded music – the music industry is doing just fine.

“The sale of recorded music is no longer the primary driver, and much of that revenue has moved elsewhere,” he wrote. “Lots of folks are excited about the opportunities the world enables today. It’s just too bad the RIAA is looking backwards, rather than forward.”