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FROM THIS EPISODE

This is Celia Hirschman with On the Beat for KCRW.

In the film The Social Network, the character of Sean Parker, co-founder of Napster, claims he ruined the record business with his disruptive digital online company. While I think that's a misstatement of the truth, now 10 years later, here's where the record industry really sits.

According to the industry research company, Big Champagne, over 180,000 individual full-length albums will be released on CD this year. That more than triples the annual number of releases since 2000, when less than 50,000 titles were released. Despite this huge rise in music releases, CD sales are down. And while the record business has shifted its strategy to offer digital downloads of all contemporary titles, online sales have not showed significant increase.

According to NPD, another industry research firm, the top 10 reasons music appreciators have not transitioned to buying digital downloads are:

One: they listen radio instead
Two: they prefer to own their own physical CD
Three: they are spending less on entertainment overall
Four: they don't like to listen to music on a computer
Five: they are satisfied with the collection of music they have
Six: they don't spend as much time listening to music as they used to
Seven: they don't have an MP3 player or iPod
Eight – they don't feel comfortable putting their credit card info online
Nine – they are wary of viruses and think music is too expensive
Ten – they dislike supporting the record business

And Big Champagne, notes that YouTube and MySpace music streams have absolutely dwarfed album and song downloads.

But the record business is not the only industry seeing sizeable declines. The US video-gaming business saw an 8% decline in sales so far this year, according to NPD. And the hardware that drives those games was down another 13%.

But there's one company that is bulletproof against the recession. That company showed all-time profits in the last quarter, with $4.3 billion in net revenue. Which company is it? The only company that has bustling retail stores in a national recession. The only company that continues to innovate while everyone else follows.

That company is Apple Computers. Apple's gross income last quarter exceeded the entire worldwide annual market value of the recorded music business.

Now that's a business.

This is Celia Hirschman with On the Beat for KCRW.

The Social Network

David Fincher

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