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RIAA Creative Accounting

C

cquark

Golden Member
The RIAA has always wanted to claim that modern digital technology is a terrible threat to their business. However, if we look at the details of their claims, it becomes clear that they've engaged in some quite creative accounting to claim lost sales at a time when their sales are going up. From http://www.kensei-news.com/cgi-bin/bizdev/exec/view.cgi/29/23374
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."
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In reality, what the RIAA wants is for the federal government to crush competing businesses using modern technology in favor of the RIAA's old near monopoly over music distribution.
 
Creative math is by no means a new development in the entertainment industry.

You should see what happens with film.
 
Originally posted by: K1052
Creative math is by no means a new development in the entertainment industry.

You should see what happens with film.
Click to expand...

LOL - like how Stan Lee wasn't going to get a dime from the Spiderman movie, because according to the accountants, it didn't produce a profit? :roll:

Stupid, Greedy Conservative Hollywood.. oh wait.. 😛
 
Originally posted by: K1052
Creative math is by no means a new development in the entertainment industry.

You should see what happens with film.
Click to expand...

They learned well from the Oil Baron Republicans running Enron and the Country.

 
This guy is about as bright as a two watt bulb. First he writes:

"Now armed with the secret decoder formula, I went back and read the RIAA and International Federation of the Phonographic Industry (IFPI) Web sites more adroitly."

Ok, got it. Then about 10 sentences later:

"Their Web site, which claims to represent the industry worldwide, but, oddly enough, doesn't readily explain what the anachronism, IFPI, means, has a fact sheet at..."

DOH!

He is also lazy and needs to take a remedial course in gratuitous comma usage: "IFPI, International Federation of the Phonographic Industry"


Marketing 101 - Day 1: Quarterly performance results are not indicators of entire year performance. Your first quarter results could be up 100%, and then your next three quarters could erase that and then some. Quarter results are only measures of THAT QUARTER, nothing more.

So this Brain Trust seizes upon 1st quarter results and says, 'RIAA claims their annual revenues decreased from the year before, but right here it says that 1st quarter sales are up! I'm a genius!'

The "year before" to which RIAA was referring is 2002, which our Brain Trust never mentions: 2003 Yearend Statistics

I won't even go into the fact that he is counting records SOLD and RIAA is counting REVENUES:
"What gives? Didn't Cary Sherman recently attest to the "fact" that there was a "7% decrease in revenue since last year."
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While revenues are derived from sales, they are neither equal units of measure nor synonyms.
 
Originally posted by: cKGunslinger
Originally posted by: K1052
Creative math is by no means a new development in the entertainment industry.

You should see what happens with film.
Click to expand...

LOL - like how Stan Lee wasn't going to get a dime from the Spiderman movie, because according to the accountants, it didn't produce a profit? :roll:

Stupid, Greedy Conservative Hollywood.. oh wait.. 😛
Click to expand...

Yep. That is why you should ALWAYS make your deal for a percentage of the box office gross.
 
Originally posted by: K1052
Originally posted by: cKGunslinger
Originally posted by: K1052
Creative math is by no means a new development in the entertainment industry.

You should see what happens with film.
Click to expand...

LOL - like how Stan Lee wasn't going to get a dime from the Spiderman movie, because according to the accountants, it didn't produce a profit? :roll:

Stupid, Greedy Conservative Hollywood.. oh wait.. 😛
Click to expand...

Yep. That is why you should ALWAYS make your deal for a percentage of the box office gross.
Click to expand...

I'm pretty sure that the last American movie to earn a net profit was "Brith of a Nation."
 
What merits??? There is no justification for the RIAA/MPAA tactics, period.
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lol! Some things never change...
Yep. That is why you should ALWAYS make your deal for a percentage of the box office gross.
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There was nothing wrong with the wording of Lee's contract, Marvel is simply trying to weasle out of it.
 
I can't tell you how much I hate the RIAA. I can tell you guys this though. If they lowered prices of albums to about $5 each, I don't think piracy would be nearly as big of a problem and they'd sell WAY more albums.
 
Originally posted by: tcsenter
What merits??? There is no justification for the RIAA/MPAA tactics, period.
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lol! Some things never change...
Yep. That is why you should ALWAYS make your deal for a percentage of the box office gross.
Click to expand...
No company would ever agree to a percentage of gross revenues.

There was nothing wrong with the wording of Lee's contract, Marvel is simply trying to weasle out of it.
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Incorrect.

It is done all the time in the movie industry.

Edit:

It is usually done on titles where the person demanding it has enough leverage that the studio decides it is worth is. Contingencies are sometimes also built in where the level of compensation they receive is directly linked to box office gross.

Example:

2% for $50M domestic gross
5 % for $100M
10% for $150M+
 
tcsenter

As far as I can tell, that pdf you linked to from the RIAA does not take into account online music purchases from legitimate sites like Itunes and the new Napster.

I know that iTunes alone acounts for *at a mininum* of $1,000,000 worth of retail sales, almost every penny of which goes to the RIAA. I would assume that a large percentage of all of the other comparable vendors would be the same way.

This was only in retail outlets.

I bet that half.com has also greatly increased used CD sales in the last 2 years as well. Why buy new for $12 when you can easily hop online and buy them for $7? Those count against sales, but are legal purchases as well.

If the economy is in a recession, and more people buy used cars instead of new ones because it's more cost effective, you don't see the auto manufacturers claiming that they are losing sales to vehicle theft.

You also mentioned revenues. Well, in the last 3 years I've been able to pick up new release albums for $6.99 and $7.99 from Best Buy. In earlier years you'd never see CD's going for that cheap. I don't know if it's a pricing change made by the RIAA, or if it's simply a loss leader put out by the retail outlet. I just know I can buy new music cheaper now than I ever had been able to. That will lower revenue, but not affect sales.

There's way more to the story than that chart leads you to believe. It's much easier now to get used music and *legal* music online. CD sales ARE GOING to drop from that.
 
Originally posted by: Genx87
Havent bought a record in years. The music industry is run by idiots with an outdated business model.
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Originally posted by: ntdz
I can't tell you how much I hate the RIAA. I can tell you guys this though. If they lowered prices of albums to about $5 each, I don't think piracy would be nearly as big of a problem and they'd sell WAY more albums.
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All this agreement. You guys are making me cry. Sniff Sniff
 
Incorrect. It is done all the time in the movie industry
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I realized later that we were talking about Hollywood and gross revenue deals are made, so I took that part out of my reply, I would note, 1 minute before your response. 😉
 
Originally posted by: dmcowen674
Originally posted by: Genx87
Havent bought a record in years. The music industry is run by idiots with an outdated business model.
Click to expand...

Originally posted by: ntdz
I can't tell you how much I hate the RIAA. I can tell you guys this though. If they lowered prices of albums to about $5 each, I don't think piracy would be nearly as big of a problem and they'd sell WAY more albums.
Click to expand...

All this agreement. You guys are making me cry. Sniff Sniff
Click to expand...

It is April fools day. You arent playing a joke on us are you? 😉



 
Originally posted by: tcsenter
Incorrect. It is done all the time in the movie industry
Click to expand...
I realized later that we were talking about Hollywood and gross revenue deals are made, so I took that part out of my reply, I would note, 1 minute before your response. 😉
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Yea, that is typical for me. I'll start a response and get distacted by someting else then come back to it.😀
 
As far as I can tell, that pdf you linked to from the RIAA does not take into account online music purchases from legitimate sites like Itunes and the new Napster. I know that iTunes alone acounts for *at a mininum* of $1,000,000 worth of retail sales, almost every penny of which goes to the RIAA. I would assume that a large percentage of all of the other comparable vendors would be the same way.
Click to expand...
And all irrelevant, since Napster wasn't operating during the 2002 ~ 2003 period of issue and iTunes for Mac had been operating only since April 2003. The Windows version of iTunes wasn't rolled-out until almost December.

This issue isn't what RIAA says, but what our Brain Trust (Moses Avalon) - the guy who couldn't figure out what IFPI meant just after he wrote IFPI's full name - says RIAA said. And as I've proven, the guy couldn't find an accurate statement with two hands and a flashlight.
 
Originally posted by: tcsenter
As far as I can tell, that pdf you linked to from the RIAA does not take into account online music purchases from legitimate sites like Itunes and the new Napster. I know that iTunes alone acounts for *at a mininum* of $1,000,000 worth of retail sales, almost every penny of which goes to the RIAA. I would assume that a large percentage of all of the other comparable vendors would be the same way.
Click to expand...
And all irrelevant, since Napster wasn't operating during the 2002 ~ 2003 period of issue and iTunes for Mac had been operating only since April 2003. The Windows version of iTunes wasn't rolled-out until almost December.

This issue isn't what RIAA says, but what our Brain Trust (Moses Avalon) - the guy who couldn't figure out what IFPI meant just after he wrote IFPI's full name - says RIAA said. And as I've proven, the guy couldn't find an accurate statement with two hands and a flashlight.
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I still want to know what is considered a "retail location". Does Amazon or what was "cdnow.com" count in that?
 
I'd also like to point out that myself, and several people that I know have either drastically cut back, if not completely haulted in purchasing CD's now that we have satellite radio.

That's probably taken at least a measurable cut into the music industries sales because of people like me.
 
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