From the Los Angeles Times in June 2008, “Music sales decline 8% on piracy, industry group says”:

Music sales fell to the lowest level in at least 10 years as a surge in digital content failed to make up for declines in compact discs and the effects of piracy, an industry group said today. Global music sales dropped 8% to $19.4 billion in 2007, according to a report from the International Federation of the Phonographic Industry…

But the “industry group” has failed to recognize the real answer to slowing sales, and that is the result of media hyperinflation. Hyperinflation occurs when there is so much of something available that the value of that something goes down. It is most often used to describe the money supply, such as with Zimbabwe’s currency. But the explosive growth in the information age of the last decade has also caused hyperinflation in digital content. Just count the number of albums or DVD’s for sale at Amazon or iTunes and you will see; the numbers are staggering, and increasing rapidly every year. There are also dozens of new ways to obtain free or nearly free and legal music, that will not hit the sales books of the recording industry:

  • Direct consumer to consumer sales on Amazon.com, half price books or similar
  • 25 cent older generation music CD’s at garage sales
  • Legal downloads of free albums from up and coming bands that the labels never picked up
  • Internet streaming and legal radio
  • Satellite radio

Instead of recognizing the obvious, and adapting to the current operating environment, the music industry continues to blame piracy and charge the same 1990 prices ($15 for 10 cent piece of plastic) for a rapidly declining commodity with infinite supply. Perhaps the music industry would be interested in purchasing my 1990 era computer for $1500. I’ll even make a fair trade - my 1990 computer for 100 music CD’s of my choice.