RIAA Bets On Cloud Service Despite Dubious Data

New sales data from the RIAA indicate that record sales are up 1 percent for the first half of 2011 as compared to 2010. Total album sales in the first half of 2011 totaled 155.5 million, up from 153.9 million in 2010. A one percent gain might seem meaningless in any other industry, but we're talking about music sales, which have been declining every single year since 2004.

There is, of course, a great deal of change going on underneath that single macro percentage point. Music consumption patterns have shifted dramatically in the past seven years. CD sales continue to decline, but a portion of that decrease has been offset by growth in digital track downloads, digital album sales, and various subscription services.

After more than a decade of refusing to admit the market was changing and suing what might have become licensed revenue streams out of existence, the RIAA has finally changed its tune. The organization's CEO, Mitch Bainwol, released the following statement when Apple launched its iCloud service: "The music labels are in constant search of new, convenient and innovative ways to reenergize legitimate music use and deliver the world’s best music,” said Bainwol.

“This groundbreaking new model exemplifies the unique cultural benefit that springs from the partnership between music and technology.  When a service comes along that respects creators’ rights and ignites fans’ appetites for their music collections, it’s a win for everybody.”

It's an open question as to whether or not cloud music sites can actually deliver the types of gains that the music industry is hoping for. Subscription service growth has historically been quite tepid; iCloud may help drive adoption of cloud-computing style music sharing--but it may not. Services like Napster have offered cloud computing-style features for years, even if they called it something different. The industry has only itself to blame for the problem in general--early
subscription services paid lip service to the idea of actually allowing customers to enjoy music, while saddling them with onerous download restrictions, half-baked authentication and security schemes, and strict limitations on anyone's ability to actually take music anywhere.

None of the fledgling services of the era were popular enough to truly bias listeners against subscription services en masse, but the RIAA continues to demonstrate a lack of understanding when it comes to allowing people to use music in ways they want to while simultaneously offering services that actually reward artists and producers for their work. There's a lot of good evidence when it comes to the growing popularity of digital consumption in general, but precious little information on which services will replace the old system as primary revenue drivers.