The Berne Convention (of September 9, 1886) was formed for the purpose of
protecting intellectual property.
It has been quoted by most American Politicians for the last
10 years as the reason why America
needs to get tough with the P2P community.
Its interesting, that the United
States only became a signatory to the
convention (see USA details for accession date) on November 16, 1988, a mere 90 days
after the first news story surfaced about Echelon. (18
August, 1988 - scroll down to the August 18 entry)
In other words prior to that date, the United
States did not recognise the validity of
Intellectual Property outside it’s borders.
With its penetrative Deep Packet Inspection policies,
implemented initially through Echelon, then via triplet encryption keys in windows, and now Ak..... and some hardware vendors, it
could be argued that the United States still doesn’t recognize the value of
Intellectual Property except where it pertains to the wealth and well being of
its natives, office holders or corporate
entities.
Many wonder why the European Parliament is concerned about
Intellectual Property protection. (ACTA)
An article
from ZDNet explains part of the nature of the problem.
Duncan Campbell's Scientific and Technical Options
Assessment (STOA) April 2000 report to the European Union entitled Interception
Capabilities 2000 states that those governments implicated in Echelon routinely
monitor commercial communications. This report also states that in the US
a process was developed "whereby NSA data could be used to support
commercial and economic interests."
The United States
didn’t count on hundreds of thousands of young hackers finding extraordinary methods
of obfuscating, encrypting and misleading DPI into not being able to read the
commercial data therein.
Therefore it had no choice. It had to drag in the RIAA.
Our guess is that the conversation went something like this…..
Now look here RIAA….
Our economy is going to go belly up unless you can
convince the world to stop using P2P.
How can we compete against the whole world unless we can
read their confidential business plans.
We’ve fixed Microsoft windows – but we just cant get into
that open source Linux stuff.
You guys created this mess by suing Napster – now fix it.
And you cant tell them that its because we cant read
their emails to each other – you have to come up with another reason.
For countries to continue to kowtow to the United
States demands of criminalising intellectual
property sharing, they must demand that echelon data be freely shared with all signatories to the Berne convention.
And if the US really is more concerned with illegal file sharing than it is in snooping on the worlds population - then it will off course immediately comply.
In other words - the USA should have to first clean up in its own backyard before it can justify
its pontifically "superior than thou" attitude, to foreign Governments.
The first thing to remember is that friends don’t spy on
friends.
Wake up world – smell the coffee – The USA stance on
Intellectual Property protection is “Do as I say – not as I do”.
Does anyone else see a problem with this? Or am I all alone
on this little island.
Wouldn’t it be interesting if the current push for a global
world government actually went to the country with the most votes.
As an economist, I am enamoured of the concept of a united
world central government overseeing that all people of the world are treated
with respect, equally, fairly and without favour.
Unfortunately, if it were based on a fair and democratic
voting process it would probably never come to pass – Why? – Because obviously
the outcome would result in a socialist existence.
Because obviously the first action of the global Government,
would be to make all decisions public referendums.
And the next action would be to outlaw paid lobbyist access
to the members.
Every decision would be made by the public with a 24 hour
per day rolling poll.
Think about it – it would be extremely cheap to run.
There would be just one chap – and he would speak on behalf
of the entire world.
All interaction with the OWG (Our World Government) would be
through the internet.
Any person could nominate an issue to vote on.
Issues would be passed or rejected by global voluntary vote.
Those that were interested would vote, those that weren’t, wouldn’t.
Think of it as Government by Ebay. If you like it – bid. If
you don’t like the motion… vote no and keep looking.
All those in favour of file sharing ----- tick here.
All those in favour of putting file sharers in jail ------ tick here.......
All those in favour of removing all guns and ammunition out
of Somalia
------- tick here.
All those in favour of sending aid and education to Somalia
-------- tick here
All those in favour of providing homes for all the homeless
------ tick here (=$3.00 extra tax per wk)
All those in favour of leaving the homeless in the street ----- tick here.
The result of such an experiment would be interesting.
Cartels would disappear overnight.
Pork Barreling would disappear.
Business that depended on Government subsidies would fail
unless the public recognized and approved those subsidies.
There would of course have to be one more regulation to
ensure that no one country could rape and pillage its neighbours…..
What is made here – stays here – and what isn’t made here
doesn’t come here.
Which of course is the old import/export Tartiff regime. So
possibly, the Global Government needs to be independent state governments
first.
The Independent Internet Government of Australia.
hmmmmmmm
The current American push for an global copyright cartel
protects only American interests.
Governments outside of the USA,
should be aware of that.
Homework
Ask your local member, senator, congressman, minister of
parliament, how does Copyright Legislation help us keep our jobs?
How will it stop me losing my house?
What will it do for [insert your country here] economy?
So what shall we call this global political organisation
that asks its global citizens to vote on every issue?
Its well known that in times of economic crisis, the best
thing an administration can do is take the nation to war.
War boosts manufacturing, jobs, and manages to get rid of a
few thousand future social welfare entitlement recipients.
But what happens when the population is sick of war.
What happens when the Government can’t justify another
overseas invasion.
Everyone is being good.Except maybe the citizens. They’re stealing a few movies.
Eureka! Declare
war on the citizens.
But they vote.
OK declare war on the citizens of a different country – I know
– how about Sweden.
Those PirateBay
chappies will be good for a few headlines. We can get some mileage out of that
and of course, we cant loose – we own the Judge.
Which brings me to some quotes that I like.
"It's ironic to me that we can commit a nation to
war, even world war, on less evidence than it takes to convict someone for
smoking a joint in downtown Manhattan." -Ron Kuby, Criminal Defense
Lawyer, FOX NEWS, October 30,
2001, 11:54:21
"The legal hallmark of dictatorship has always been
Preventative Law -- the concept that a man is guilty until he is proven
innocent..." -Ayn Rand
U.S. Attorney General John Ashcroft: Bear with
us here. We we are used to reacting to crime after it happens. Preventing
crime before it happens is new to us and we must adapt.Prevention is
now our top priority. We're learning with each new incident. -CNBC, October 16, 2001, 12:45:10
The more complex societies get and the more complex the
networks of interdependence within and beyond community and national borders
get, the more people are forced in their own interests to find non-zero-sum
solutions. That is, win–win solutions instead of win–lose solutions.... Because
we find as our interdependence increases that, on the whole, we do better when
other people do better as well — so we have to find ways that we can all win,
we have to accommodate each other.... Bill Clinton,
Wired
interview, December 2000 .
"There ain't no rules around here. We're trying to
accomplish something." -- Thomas Edison.
A good compromise, a good piece of
legislation, is like a good sentence; or a good piece of music. Everybody can
recognize it. They say, 'Huh. It works. It makes sense.' Barack
Obama
It is no coincidence that the 19th Century, a time of
Gold coin standards for the most part, was an era of peace. Nor is it a
coincidence that the 20th century combines war with paper money.-Ron
Paul (R-TX), The Ron Paul Money Book, 1991, pg. 32
On Neil Diamonds Album, Hot August Night, he calls out… Hello
out there Tree People…..
His words – which impressed me over thirty years ago are
obviously an acknowledgement by Neil, that even the non-paying tree people had
a value, by adding to the carnival atmosphere of the concert and were therefore worthy of
his recognition.
He didn’t chastise them for being free-loaders – everyone knew
they were freeloading. He merely acknowledged them warmly.
Could it be that part of the reason for his success was his treatment of the freeloaders and the subsequent public understanding of his comment to the the tree people?
However it was also those words that in my mind justified
the actions of myself and three friends jumping the fence at the Western Springs
Stadium in Auckland New Zealand a few years later to
watch Led Zeppelin.
Did we break the law, obviously, so why did we do it ?
Well at the time – we were poor starving students that couldn’t
afford the $7.00 concert entry ticket price.
Shit, for me, $7.00 equaled 2 loaves of bread, 2 dozen eggs,
a ½ pound of butter and a jar of coffee
and bag of sugar for two weeks (Basically I lived on a variation of poached egg
on toast for breakfast lunch and tea). In other words – the price of the concert
tickets was two weeks food bill but I had serious conflict. From a higher power
than that which employed the security guards around the Western Springs venue -
my girlfriend wanted to see “Stairway to Heaven“ being performed live.
Can you imagine me saying no? (Especially when we were
staying at digs only 800 meters from the Western Springs Stadium fence-line.)
The peer pressure was to jump the fence.
Now imagine if we had been strangers to the area and the
four of us had driven there by car and stopped to ask a lone walker for
directions to the Concert.
Hi, can you give us directions to the Zep concert please.
Sure, the average citizen would answer – and then they would
proceed to give directions.
Then we would proceed to jump the fence and enjoy the
concert for free.
Can you imagine the following Newspaper story in 1976 …..
Individual giving directions to Rock and Roll concert freeloaders
gets 12 months Jail and $50,000 fine.
No you can’t because in 1976 – jumping the fence wasn’t much
of a crime.
The judges would have laughed it out of the court…. And on
the question of jailing the signpost, the directions giver, the guidebook, the
UBD map, the community pin board, the search engine;
well I think on that question, thirty years ago, our Judiciary
would have said – no – that’s quite impossible.
Giving directions to people that you suspect might jump the
fence is certainly not a crime.
If the Swedish courts don’t fix their own mistake – the European
International Court has no choice but to intervene.
Article 1 – Obligation to
respect human rights
The High Contracting Parties shall secure to everyone within
their jurisdiction the rights and freedoms defined in Section I of this
Convention.
Article 6 – Right to a fair
trial
In the determination of his
civil rights and obligations or of any criminal charge against him,
everyone is entitled to a fair and public hearing within a reasonable time
by an independent and impartial tribunal established by law. Judgment
shall be pronounced publicly but the press and public may be excluded from
all or part of the trial in the interests of morals, public order or
national security in a democratic society, where the interests of
juveniles or the protection of the private life of the parties so require,
or to the extent strictly necessary in the opinion of the court in special
circumstances where publicity would prejudice the interests of justice.
Australia
ranks number 26 on the worlds IT IQ scale.
We have a lot of fun at Perceptric. When one doesn’t have to
answer to a board of directors, twenty thousand shareholders and the members of
the press, well, one can pretty much please themselves. What I have discovered
is that out of choice, comes excellence. After all – who else but the idle
beach bum has the time to calculate the meaning of life as it pertains to the
quality of each sunrise and sunset.
For those of us that cant sit on the beach to watch each and
every solar appearance and disappearance, there is Google – search sunrise –
images.
Google search has become an integral part of our life. So
much so that Google holds the number one
page rank on Alexa globally.
29.97% of the worlds unique ip numbers that have been
counted in use spend 8.4 minutes per day viewing 7.59 search page results.
And most educators would tell you that the search for knowledge is an active and relevant indicator of IQ potential.
The one focus that the current American financial crisis
(yes it’s American – it doesn’t really have anything to do with us
Australians,) has brought to light – is that for a financial recovery to be
effective – we must look at planting our seeds in the most fertile field.
And according to a recent idle pastime – I discovered that
the most fertile field is in Qatar
followed by Bahrain
(nope – you’re on the wrong track) followed by Slovenia,
then Kuwait,
the United Arab Emirates
then Ireland
and then Oman.
Yes, some of those countries have the oil. Yes, those are
the countries that I have previously identified as being the world biggest P2P
IFS down-loaders.
But they also, according to a new statistic the most
knowledge thirsty bunch in the world. Those are the countries that carry out
the most accesses to Google per capita of population.
We call this result the Perceptronic ITQ result. (IT IQ)
Although unfortunately – I can see the media beat up on this
one….. Australia
leads from the UK
and the USA on
IT IQ scale - what a shame our media is so headline thirsty and truth averse.
A couple of days ago there was an announcement from Warner Home Video that they are moving to day and date release of downloads and DVD's.
I checked in with a friend in Hollywood who is close to the action over there to try to find out what insights he could provide to add to the story.
His view - which I think is pretty informed - is that Warners will take advantage of whatever technology there is as it comes on stream - particularly improved bandwidth.
What we tend to forget is that while P2P may be an extremely interesting wild card issue for the studios, their reality is driven by the distribution and sale of product that has a strong quality assurance quotient. Whether it is standard definition or Blu-Ray or HD, all of the content can be relied upon to provide a high quality consumer experience.
On line in the P2P arena there is still so much truly pirated stuff (like movies shot in cinemas for instance) that is relatively poor quality that the motivation from consumers has to be to purchase the movie - regardless of "free".
We are creatures of habit, and we are creatures of expectation. And we do expect to be able to consume content of a relatively high quality. In music where songs last for 3 or 4 minutes an mp3 is reasonably tolerable. In short subject film a lo-fi version still gets the message across. But if you are going to invest 90 minutes or more of your time into watching a movie, you want it to be of a decent standard. That is why I don't believe that free low quality is going to impact the movie industry anytime soon, and let's face it, that is what most of the P2P material is. Not all.... I know....
So this move by Warners has some interesting implications.
The move to a simultaneous date for download and DVD is in my opinion, indicative of a philosophy of wanting to move much more seriously into the download business. I wouldn't even be surprised if they announced an experimental new business model that involves P2P sometime this year.
The other day, I opined that Presidents Obamas activities
were akin to flogging a horse up thehill with little hope of it surviving the trip down the other side.
It would appear that others agree.
In an article from Fox News, entitled First
100 days Spending Spree Raises Management Issues the interviewer, Stephen
Clark asked Brian Reidl, Senior Policy Analyst at the Prestigious Heritage Foundation (OK – they’re a little to the right) who
opined that all of the spending may lead the Democratic controlled congress to
"overreach and create expensive, unworkable new programs that will not be
easy to fix or cut later."
He said Obama is doing too much too fast.
But what if he isn’t.
My partner Chris Gilbey
pontificated an interesting concept the other day.
He said “But what about the background behind the background?”
In other words – whilst everyone is watching the left hand, and listening to
the discussion about the left hand, what is Obama really trying to achieve with
his right hand, underneath the handkerchief?
What if Obama’s appointment of RIAA executives to the Justice
department and his green energy initiatives are linked.
The global meltdown has everyone watching the banks for the
first sign of recovery.
The press, analysts and economists are predicting a long painful
extrication.
But what if the recovery isn’t coming from the Banks. What
if the recovery comes from a partnership between the currently embittered (but
doing quite nicely through digital sales and box office attendance – thank-you)
content industry and the P2P file sharers?
We opined earlier this year that there was a solution to the
problem of IFS (Illegal File Sharing) that was related to generating capital
that was not based on indebting future generations with unfair tax burdens.
We opined that consumer generated Carbon Credits were
possibly a logical answer both to the GFC and to the deficit being incurred by
Governments trying to encourage the banking sector to restart the motor.
The distribution of a physical CD 0r DVD incurs an
approximate Carbon footprint of around $5.00.
The cost of distribution via the Internet for a 700 MB
facsimile (xvid rip) is equal to approximately
78 cents value of carbon emissions.
The difference results in a carbon offset of $4.12.
And of course, distribution would be to the file sharer (the
person that uploads the file) and the Content owner/creator.
There appears to be profit in there somewhere for all
parties. The individuals ripping, promoting and making the file available; the
content owners and the Governments who would legalise P2P if there was someway
to tax it.
With upwards of 50 million movies being traded a day I would
say the three billion dollars a day from Green P2P activities could just be the
financial impetus the world needs right now; even if the tax was only a buck a
movie.
It may well be the first tax that consumers wholeheartedly
embrace – after all it didn’t cost them – they were just doing what they love
to do. Share.
What do we need to get there?
We need a United Nations Clean Development Mechanism
proposal drafted and submitted.
I tried to raise interest for this issue in Australia
via the Link Institute, but failed. My queries for assistance to write the CDM
proposal obtained zero responses from some of the best minds in Australia.
But then I guess, the curse of being an Entrepreneur
is to have the vision, then fight for its birth.
So I will continue fighting for the survival of my idea.
Maybe, Obama is an Entrepreneur,
masquerading as a politician; and he also is fighting, to ensure that his
“advisors” don’t ensure that only a few “buddies” will be looked after.
Wouldn’t it be cool if he was creating a smoke-screen, to
actually legitimize P2P; even if all it meant was a paltry $50m extra per day
in taxation revenues.
At Perceptric, we observe and we count and then we blog and
occasionally as a result, we consult.
Today is freebie consult for Kevin.
One thing we count is the popularity of memes, themes and
trends.
The popular press is having a heyday with the Global
Financial Crisis (GFC) (And, almost 38% of the requests for content on Perceptric appear to be for articles about the GFC.)
Here's my last news flash for you. If a fellow with no
education, a poor diet, and inadequate medical treatment living at 3,500 meters
above sea level can figure out that the US dollar is undesirable as a store of
wealth, how much longer do you think it can last as the world's reserve
currency? The short answer is that the party is over and all things dollar
related will go up the stack with it. Henrico
OrlandiMar 8, 2007
And then in October, he blogged about Inside
the Crash in which he quoted Eliot Spitzer
From an article in
the Washington Post Thursday, February 14, 2008
Not only did the Bush administration do nothing to
protect consumers, it embarked on an aggressive and unprecedented campaign to
prevent states from protecting their residents from the very problems to which
the federal government was turning a blind eye.
This was the article
– that ended Eliot Spitzers Governership of New York and removed all hope of Hillary
Clinton being nominated
for the “Big” job.
Dear Reader I can hear the question in your mind “But what’s
the Point? Where’s the meme, the trend?”
meme no.1 – it doesn’t pay to criticize the governments
fiscal policy.
meme no 3. and while everyone is watching the magicians
other hand – the financial institutions keep on carrying on.
87% of Perceptric.com readers according to Alexa originate
in Australia.
Yet Inside the Crash is our most reviewed article.
Are Australian readers researching their own possible future? I put it to you
that they are.
The global meldown has everyone watching the banks for the
first sign of recovery.
The press, analysts and economists are predicting a long
haul.
Overseas bank bail-outs don’t seem to have had any effect on
the continuing closures and layoffs within our own borders.
People are scared and divided into two consumer camps. There
are the hoarder savers and the ostriches (tomorrow may never come, so live it
up now).
This division of consumer spending is causing quite rightly,
some concern in the bowels of the Australian Banking industry which combined
with financial horror stories from abroad is resulting in a credit squeeze in
Oz.
In Australia,
our housing sector is yet to see the full force of the future deflation.
Our Prime Minister is doing his best to encourage young
people to get into their first home before the First Home Owners Scheme expires
at the end of June.
What he hasn’t put into effect is the anti-deflationary
measures required to ensure that current purchasers are not the first ones
evicted when the housing market heads south.
One way to do this would be to guarantee the present equity
in each and every new issued mortgage.
New home buyers are exposed on two fronts.
Continuing employment
Equity value –v- interest rate rises.
Eventually the Australian Reserve Bank will be forced to
raise interest levels, and unemployment is rising.
Kevin Rudd needs to implement an Australia
wide mortgage guarantee insurance policy, available at a nominal fee (and
mandated as part of the mortgage documentation) to all new home buyers aged
between 20 and 30.
Most Mortgage protection policies are structured with a
fixed term payout clause.
In this instance, the Government needs to ensure that the
“fixed term” liability is removed for a period of up to six years.
These are the people that will be the victims when thousands
disappear off their equity balance sheet and they are retrenched.
If the Government moves to protect the new home buyers (GIO),
ensuring in the process that they will not turn into the new homeless ex-buyers
of the future, then the banks will reward this initiative by again loosening
the commercial strings for businesses that create Australian goods for
Australian consumption.
The train wreck hasn’t yet reached our shores; let’s lay
down lots of sandbags before it does.
From the research that we have been doing at Perceptric we have discovered some things that are largely not understood by the content industry as far as we know.
One of these things relates to the dayparting of download activity. (Wikipedia provides the following definition: “In broadcasting, dayparting is the practice of dividing the day into several parts, during each of which a different type of radio programming or television programming apropos for that time is aired. Programs are most often geared toward a particular demographic, and what the target audience typically engages in at that time”).
We thought that if the data on P2P activity that is commonly accepted was correct – i.e. that more than 70% of the bandwidth that is being used globally was for P2P activity – then it would be statistically impossible for all that to take place during the time that people are commonly at home.
So we started investigating what times downloads take place.
What we found was that there are very distinct time zones during which activity is heightened, some of which are during normal office hours, Monday to Friday.
This has some interesting sociological implications which we are looking at in conjunction with some colleagues one of whom is an industrial psychologist and the other who is a neural anthropologist. The conclusions from those discussions will be released in a forthcoming report that we intend to publish.
That is somewhat academic.
What is important here though is that there has been an ongoing media demonization of the use of P2P by ordinary individuals for several years. It appears to have started in the US and has spread through most of the English speaking world (the colonies of the US Empire, perhaps?). What has been ignored is the part that corporations wittingly or unwittingly play in the sharing of files using P2P.
Most corporations will of course deny the possibility of there being any illicit activity taking place through the corporate firewalls. And for many of them that is probably quite true. But for some it isn’t. In fact for some the P2P activity that is taking place is happening totally behind the firewall with employees from within the organization sharing files from central servers that are there to – no pun intended – better serve the employees!
If smart executives in the music and movie industry actually did some real analysis of the data instead of buying into the rhetoric coming out of a few people in Hollywood, who have their own agendas, they might actually get somewhere.
Personally I would hope that the “somewhere” they get to is a realization that they are never going to stop file sharing taking place period. The only thing that they can do is to start realizing that the people at the top who have been pushing that agenda are wrong. And it is only going to change when some of the insightful people within the industry remove the blinkers and understand what the entire picture looks like. Then they can change their own minds. Once that happens hopefully P2P will be embraced rather than demonized and society will be able to benefit universally from the free flow of information travelling in a optimal technical environment.
My father, an accountant used to tell me when I was a boy - Son, numbers are wonderful - master the numbers and you can tell anybody anything you like.
For years the Music Industry have thrown crap at us bundled
up nicely as an album and charged top dollar.
Now that internet protocol file sharing (IPFS – not P2P)
allows the public to select only the good and disregard the bad or humdrum, the
music Industry is aghast. Their wonderful profit model has been canabilised
beyond all possible redemption. Or has it been replaced by another - more profitable model?
2008 ARIA Yearly
Statistics
Australian Recording
Industry Association Ltd.
January - June 2007 vs
January - June 2008
Net Wholesale Sales of Sound
Recordings & Music Videos
January - June 2008
January - June 2007
Percentage Change
Configuration
Units
Packages
DollarValue
Units
Packages
DollarValue
Units
Packages
$Value
CD Singles
647,088
640,895
1,655,531
1,317,556
1,317,742
3,643,249
-50.89%
-51.36%
-54.56%
Vinyl Albums
9,680
6,084
128,543
9,098
5,845
97,520
6.40%
4.09%
31.81%
Cassette Albums
3,827
2,829
8,281
7,556
5,968
36,583
-49.35%
-52.60%
-77.36%
CD Albums
16,131,484
11,977,043
131,396,560
17,624,534
13,157,485
147,322,096
-8.47%
-8.97%
-10.81%
Music Video/DVD
2,013,421
1,691,759
18,792,851
1,733,486
1,411,705
16,583,117
16.15%
19.84%
13.33%
Other *
5,396
5,319
48,807
7,447
5,201
79,072
-27.54%
2.27%
-38.28%
Total Physical
18,810,896
14,323,929
152,030,573
20,699,677
15,903,946
167,761,637
-9.12%
-9.93%
-9.38%
Digital Track
12,144,498
13,253,070
7,958,855
8,380,163
52.59%
58.15%
Digital Album
593,726
5,916,413
383,245
2,661,404
54.92%
122.30%
Mobile Ringtones
2,316,864
4,028,088
2,876,515
5,035,602
-19.46%
-20.01%
Digital Other **
38,636,755
2,673,480
4,726,250
2,066,131
717.49%
29.40%
Total Digital
53,691,843
25,871,051
15,944,865
18,143,300
236.73%
42.59%
Grand Totals
72,502,739
14,323,929
177,901,624
36,644,542
15,903,946
185,904,937
97.85%
-9.93%
-4.31%
Source: ARIA
In Australia
– ARIA are claiming that their numbers are down financially by 4.31%.
But are they?
Legal DRM free digital download sales are going through the
roof. The pricing of digital content is being pushed higher every year.
Prices
2008 ARIA
Yearly Statistics - Net Wholesale Sales of Sound Recordings & Music
Videos
Jan-Jun 2008
January - June 2007
(Over 100% is an increase)
Unit Cost
Unit Cost
% +/-
CD Singles
$2.56
$2.77
93%
Vinyl Albums
$13.28
$10.72
124%
Cassette Albums
$2.16
$4.84
45%
CD Albums
$8.15
$8.36
97%
Music Video/DVD
$9.33
$9.57
98%
Other *
$9.05
$10.62
85%
Total Physical
$8.08
$8.10
100%
Digital Track
$1.09
$1.05
104%
Digital Album
$9.96
$6.94
143%
Mobile Master Ringtones
$1.74
$1.75
99%
Digital Other **
$0.07
$0.44
16%
Total Digital
$0.48
$1.14
42%
Grand Totals
$2.45
$5.07
48%
Source: Perceptric Analysis of Above Aria Table
And what about the Margins in the business ?
Let us assume a Retail Price
$19.95
Each
Normal retail margins
35%
Normal Wholesale Margins
25%
Pressing a CD is about
$0.84
per unit
Packaging is an additional
$3.87
per unit
Freight, demurrage, customs clearance on a CD is around
$0.60
per unit
Warehousing of a CD is about
$0.04
per month
Staff and salaries for distribution companies comes in at
approximately
$0.38
per CD distributed.
If we assume all CD’s are sold within 90 days of being
pressed, the Packaging, storage, distribution and delivery cost of a single
unit equals $17.78 leaving a margin to the industry of $2.17 – or approximately
16.69 cents per track GP.
Now let us examine the margin on the six billion tracks sold
via iTunes.
Before we calculate, you need to know that iTunes does not
receive any commissions or margins for the music it sells.
Let us assume a Retail Price
$0.99
Each
Normal retail margins
0%
Normal Wholesale Margins
0%
Pressing a CD is about
$0
per unit
Packaging is an additional
$0
per unit
Freight, demurrage, customs clearance on a CD is around
$0
per unit
Warehousing of a CD is about
$0
per month
Staff and salaries for distribution companies comes in at
approximately
$0.14
per music track distributed.
So in fact – the net result is $0.85 cents per track – GP or
– to look at it another way six hundred times the profit margin of physical
media delivery.
So when you see a column that says Packages (see above in Aria Table) 15,903,946 sold in
the first six months of 2007 and 14,323,929 sold in the first six months of 2008.
Don’t think total physical units. Physical in the online world has become
meaningless. Think Gee – they saved even more money in not having to package
the digital content.
How much money ?Well
if the total digital unit sales in 2008 were
53691843, then the industry saved at least $ 45,638,066
The Aria figures show that their sales figures dropped from $185,904,937 to $177,901,624 showing a clear
monetary loss of $8,003,313 – they just forgot to add the packaging and distribution
saving – so we’ll do that for them and the new total is $223,539,690 (an increase
of over 125%) clearly showing that a decrease in revenue numbers – does not
always reflect the true story.
Oh - and lets not forget the important staistic.... Digital downloads increased for the period by 335%.
Shame on you ARIA.
Haven’t you ever heard of Truth in Financial Reporting ?
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