When was the last time you walked into a record store to buy a CD?
"About a year ago, I guess," said Ellen Hsu (許曉婷), a music lover who used to squeeze into jam-packed record stores to get the albums she likes.
PHOTO: GEORGE TSORNG, TAIPEI TIMES
With over 500 CDs in her personal collection, Hsu still hums songs from the latest albums, but she gets most of these songs via peer-to-peer (P2P) file-sharing software with a few clicks on the computer screen.
"I barely set foot in record stores now ? even when I visit the stores, I merely check on song titles instead of buying," she said.
Like Hsu, millions of music fans all over the world have transformed their music-listening behavior since P2P file-sharing software appeared in recent years, which is considered by the recording industry as a major factor affecting their sales.
The nation's largest file-sharing company, kuro.com.tw (
In contrast, the record-sales figures have taken a substantial dive in recent years.
In Taiwan, the recording industry production value peaked in 1997 at NT$10.64 billion, but has declined ever since and slumped to NT$4.49 billion last year, according to statistics compiled by the International Federation of the Phonographic Industry (IFPI) in Taiwan, which represents 11 record labels in the nation.
The recording industry in Taiwan has been suing the file-sharing companies to drive them out of business in recent years. IFPI Taiwan filed lawsuits against Kuro and its smaller rival Ezpeer.com.tw last year. The copyright holders group launched campaigns to educate the public and also lobbied lawmakers to outlaw the companies.
But even if the record labels are granted their wish, will consumers go back to record stores again?
"I don't think so ... consumers have become accustomed to digital music," said Brenda Foung (馮淑惠), new media manager at Warner Music Taiwan.
The recording industry claimed a victory in shutting down Napster, a pioneer Internet song file sharer in the US three years ago, but Napster's collapse didn't halt the file-sharing trend. P2P software and online downloading have emerged as the mainstream when acquiring new songs.
Major labels in the US have so far sued 6,191 music fans since September last year for allegedly using P2P services to share copyrighted music. But a recent study showed that traffic on P2P networks has never declined.
"P2P traffic represents a significant amount of Internet traffic and is likely to continue to grow in the future," a study conducted by researchers from the University of California at Riverside and the Coop-erative Association for Internet Data Analysis found.
Another study, though disputed due to its methodology, indicated that "file sharing has only had a limited effect on record sales." The study, conducted by researchers at Harvard University and the University of North Carolina and released in March, said that, "while downloads occur on a vast scale, most users are likely individuals who would not have bought the album even in the absence of file sharing."
Instead of groaning over their losses, some recording companies have come up with new strategies to promote copyrighted CDs. Some of them launched more signature drives and concerts, while others moved to enclose more value-added products with CDs, or encrypt CDs so they can't be replicated like normal CDs can.
"We know that online music, whether legal or illegal, is an irreversible trend," Foung said. "In fact, the new technology also helps us to develop new derivative products and business models."
For example, Foung said Warner Music works with Internet service providers such as MSN and Hinet to broadcast live concerts online, and sells ring tones and ring back tones of its songs via Internet companies, which becomes another revenue source for the company.
Since the digital music era has arrived, companies tend to produce more singles for online downloading only, rather than whole albums that take longer to record and elevate packaging costs, which will be another marketing strategy in the near future, Foung said.
Apple Computer Inc has successfully established a legal music downloading model with its iTunes Music Store. Foung said the industry in Taiwan hopes the pattern of such legal sites will become the norm in Taiwan.
Taiwan's online music distributors that legally obtain copyrights from record labels include iBIZ Entertainment Technology Corp (
Though expanding iTunes to Europe, Apple Computer has kept the service out of Asia due to the rampant P2P music sharing.
"Despite losing ground to predatory music swapping, it is time for the whole music industry to come up with more great products to lure consumers," Foung said.
Ideally, recording companies should be doing just that. But in fact, the quantity and quality of albums released in recent years seemed to go downhill, said Gill Chang (張彥棻), product manager of Rock Records Co (滾石唱片), Taiwan's largest recording company.
With profits being diluted over the past years, companies can only take their best shot and stake resources on money-making albums and artists, Chang said. Although new stars still mushroom on the market, they need to strike the right note, or risk being forced off the scene, she said. As a result, only works that cater to mass audiences can survive.
Another cost-saving method widely adopted by recording companies is rehashing old songs, or collecting greatest hits from various albums into one, she said.
"Consumers need to know that eventually, they will eat their own bitter fruit when they see that the alternative or less-mainstream sounds are forced to gradually withdraw from the market," Chang said.
Robin Lee (
"Recording giants like Sony and BMG [Bertelsmann Music Group] need to merge to save costs, not to mention small and independent ones," Lee said.
The guess is that most consumers still care more about their wallets than the deteriorating future of the recording industry. When asked when P2P users will stop getting music files via P2P software, Hsu said "until the practice is officially illegal, copyrighted CDs are too expensive."
Higher CD prices appear to be such a thorny issue that recording companies hesitate to elaborate. Some compared CD prices and the GDP of various countries, and concluded that Taiwan's recording companies charge too much.
Taiwan consumers have good reason to believe that they may have long been ripped off by recording companies. Look at the situation in the US. Major labels have been penalized twice for price-fixing by Federal judges since 2002. The record companies were accused of fixing prices by subsidizing the advertising costs of retailers that agree not to sell CDs below a minimum price set by the labels.
Local music fans accused recording companies of spending extravagantly for promotional activities, passing the extra costs on to consumers, which forced consumers to turn to cheap pirate or P2P products.
Foung refused to comment on the company's pricing mechanism, and said prices were determined by the market.
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