Alarm bells sound for music industry
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by Şenay Demir - Referans
Oluşturulma Tarihi: Ocak 05, 2009 00:00
ISTANBUL-The global crisis, coupled with rising illegal downloads from the Internet, are taking their toll on the music industry. There has been a significant decline in the number of tax stamps purchased by Turkish music production firms
If the widening tendency to download music from the Internet was not enough of struggle for the music industry, it too now has to cope with the burden of the latest global crisis.
"Describing the situation as contraction would be optimistic. The distress that is expected to be experienced in the upcoming years will be nothing less than a collapse," said Bülent Forta, president of Turkish Phonographic Industry Society, or MÜ-YAP.
"Sales are expected to decline even further. As consumer purchasing power declines, they will cut entertainment expenditures.
"Troubles faced in receiving payments of distributed items are also distressing the industry. Many companies are unable to publish new copies of albums they have produced," Forta said. Describing the situation yet to come in a few years as the "collapse" of the industry, Forta said the result would be limited music production and of poor quality.
Currently there are nearly 200 companies operating in the music industry. "Every year 15 to 20 companies close up shop. These closures will continue and pretty soon only 100 players will remain in the game," Hasan Saltık said, owner of Kalan Müzik, an independent record label company based in Istanbul.
"The low tax stamp sales do not mean less music is being listened to. On the contrary, more music is being listened to; however, it is just not converted into cash. The Internet has defeated the music industry. The revenue lost is grave."
Downloads wreak havoc
Illegal downloading of music has nearly brought an end to the global music industry, said Ali Rıza Binboğa, president of Musical Work Owners’ Society of Turkey, or MESAM. Legal music downloads from the Internet were like "a drop in the ocean," he added.
A clearer picture can be seen by looking at data gathered recently. The data shows that more than 40 million tax stamps for records were purchased in 2003. In 2007 that figure dropped to little higher than 20 million. Based on data reflecting tax stamps sold during the first 10 months of 2008, that figure stood at 11.7 million.
The entire world is experiencing a similar situation. The figures talked about in the industry are declining each year. Total money circulating within the industry was $19.5 billion in 2006. That figure declined to $7.8 billion in 2007.
The U.S. music market suffers especially from not being able to pull ahead of illegal downloads. According to data published on MÜ-YAP’s Web site, the volume of the U.S. music industry, which used to be $6.4 billion in 2006, has deteriorated to $2.4 billion.
Meanwhile, the Internet has been gaining ground also in legal music sales. The legal music downloading share of the Internet, which stood at 2 percent in 2004, rose to 15 percent at the end of 2007. However, that figure is still very small compared to total music downloading figures over the Internet.
"Turkey also lags very much behind the world average, when it comes to legal music downloads," Forta said. "While the share of legal music sales over the Internet stands at 25 percent worldwide, in Turkey the figure hardly reaches 7 percent."
Technology
Development in technology is also behind declining album sales, Forta said. "The increasing utilization of mobile phones, mp3 players and PCs has caused the demand for hard copy to decline rapidly."
It would be impossible for any industry to lose this much blood and manage to stand tall, said Forta, and added that the government had to take measures to help the industry. Forta urged a reduction in value added tax, as well as a scraping of the special communication tax applied to music products sold by mobile operators. Special copyright payments should also be made to the rightful owners, he said.
"Describing the situation as contraction would be optimistic. The distress that is expected to be experienced in the upcoming years will be nothing less than a collapse," said Bülent Forta, president of Turkish Phonographic Industry Society, or MÜ-YAP.
"Sales are expected to decline even further. As consumer purchasing power declines, they will cut entertainment expenditures.
"Troubles faced in receiving payments of distributed items are also distressing the industry. Many companies are unable to publish new copies of albums they have produced," Forta said. Describing the situation yet to come in a few years as the "collapse" of the industry, Forta said the result would be limited music production and of poor quality.
Currently there are nearly 200 companies operating in the music industry. "Every year 15 to 20 companies close up shop. These closures will continue and pretty soon only 100 players will remain in the game," Hasan Saltık said, owner of Kalan Müzik, an independent record label company based in Istanbul.
"The low tax stamp sales do not mean less music is being listened to. On the contrary, more music is being listened to; however, it is just not converted into cash. The Internet has defeated the music industry. The revenue lost is grave."
Downloads wreak havoc
Illegal downloading of music has nearly brought an end to the global music industry, said Ali Rıza Binboğa, president of Musical Work Owners’ Society of Turkey, or MESAM. Legal music downloads from the Internet were like "a drop in the ocean," he added.
A clearer picture can be seen by looking at data gathered recently. The data shows that more than 40 million tax stamps for records were purchased in 2003. In 2007 that figure dropped to little higher than 20 million. Based on data reflecting tax stamps sold during the first 10 months of 2008, that figure stood at 11.7 million.
The entire world is experiencing a similar situation. The figures talked about in the industry are declining each year. Total money circulating within the industry was $19.5 billion in 2006. That figure declined to $7.8 billion in 2007.
The U.S. music market suffers especially from not being able to pull ahead of illegal downloads. According to data published on MÜ-YAP’s Web site, the volume of the U.S. music industry, which used to be $6.4 billion in 2006, has deteriorated to $2.4 billion.
Meanwhile, the Internet has been gaining ground also in legal music sales. The legal music downloading share of the Internet, which stood at 2 percent in 2004, rose to 15 percent at the end of 2007. However, that figure is still very small compared to total music downloading figures over the Internet.
"Turkey also lags very much behind the world average, when it comes to legal music downloads," Forta said. "While the share of legal music sales over the Internet stands at 25 percent worldwide, in Turkey the figure hardly reaches 7 percent."
Technology
Development in technology is also behind declining album sales, Forta said. "The increasing utilization of mobile phones, mp3 players and PCs has caused the demand for hard copy to decline rapidly."
It would be impossible for any industry to lose this much blood and manage to stand tall, said Forta, and added that the government had to take measures to help the industry. Forta urged a reduction in value added tax, as well as a scraping of the special communication tax applied to music products sold by mobile operators. Special copyright payments should also be made to the rightful owners, he said.