The Recording Industry in Numbers: A record label centered view of recorded music

The following is an academic essay that I wrote about the recording industry. Rather than publishing it through peer-review journals, I decided to release it to everyone. Please have a look and let me know what you think. It is particularly important because of the newly proposed copyright law. What it shows is that the trade organizations such as the Recording Industry Association of America (RIAA) and the International Federation of Phonographic Industries (IFPI) are very candid with regard to to the way they aim to change the industry. Please read and let’s start a conversation about the impact of the proposed copyright law.The Recording Industry in Numbers: A record label centered view of recorded music

The ability of industry trade organizations to collect and report data pertaining to the industry that they represent enables these organizations to shape the image of their industries in the eyes of variously invested actors from politicians and legislators to the public. In these circumstances, collecting and reporting data is neither an economically nor a politically neutral project; the production of knowledge is intimately bound to power. In this paper, I explore the relationship of knowledge and power through a critical interpretive reading of the Recording Industry in Numbers, an annual text produced by the International Federation of Phonographic Industries (IFPI). The IFPI was developed as a trade industry in 1933 to promote performing rights in recorded performances on a global scale (Frith 1988, 57); a number of state-based institutions fulfill the same objectives as the IFPI on a domestic scale including the Recording Industry Association of America (RIAA) and the British Phonographic Institute (BPI). As I will demonstrate, the IFPI’s annual report is a technique used by major record labels to sell a vision or “ideological set” (Harker 1997, 46) to legislators and the public, which has led to the creation of a regulatory framework that favors large corporate conglomerates over small independent producers. Increasingly, the IFPI’s ideological aims affect not only music industry policy, but also the structure of fast capitalism.

The major publication for the IFPI is the annual Recording Industry in Numbers (RIN), which began publication in 1992. Before 1992, the IFPI released periodic IFPI World Sales and press releases to demonstrate its data, but RIN has proved a far more consistent explication of annual recording industry data as reported by the major record labels. With the tagline “The definitive source of global music market information,” RIN provides a snapshot of the recording industry’s view of itself from year to year. Because of the sometimes-candid nature of these reports, the RIN is an essential resource for culture industry researchers because of the industry data that it offers and the information that it ignores. This paper has a two-pronged goal: first, I describe the IFPI’s Recording Industry in Numbers to introduce my reader to an understudied archive. I then analyze the strengths and weaknesses of relying on industry produced data to understand the industry.

Political and Cultural Context

Since the proliferation of peer-to-peer file sharing software with the development of Napster in 1999, the recording has made the claim that digital “piracy” is hurting the industry. They do this using what I call the “piracy panic narrative,” which claims that file sharing is piracy; piracy is stealing; and this stealing is directly hurting the musicians whose music file sharers download. To support their argument, major record labels and recording industry trade associations consistently refer to data that demonstrates that the recording industry is hemorrhaging. The primary source of data that they refer to in the United States comes from the IFPI and the Recording Industry Association of America (RIAA). As a result, the recording industry has saturated the news media with data and analysis that originates from itself. Academics make claims about the viability of the major record labels (McLeod 2005; Robertson et al. 2012); Congress holds hearings to deal with the perceived piracy threat (Hatch 2000); labor unions discuss jobs lost based on this data (Intellectual Property Theft: A Threat to U.S. Workers, Industries, and Our Economy 2013); and think tanks provide reports that use this data as their primary source (Siweck 2006; Siweck 2007). Interestingly, all four of these sources make reference to the industry provided data and/or each other.

At the moment, the Copyright Office just released a proposal, produced by the Internet Policy Task Force (IPTF), to update the copyright law (IPTF 2013). For that reason it is imperative that we consider the source of the basic assumptions that are the foundation of the report. At moments of transition, the federal government calls forth copyright stakeholders to the copyright bargaining table to negotiate the terms of new copyright legislation. Unfortunately, as Jessica Litman (2006) contends, the stakeholders include only representatives of groups that exist in current copyright law. In the context of the copyright green paper, data produced by the recording industry is accepted as fact, but as this essay demonstrates, there are reasons to be cautious, if not skeptical, about recording industry-generated data. At present, the recording industry drives the construction of Internet policy using the piracy panic narrative. Since the RIN is the source of data that so many commentators reference, it is important to look more closely at this source of data.

Introducing the RIN

After beginning as a comb bound report, the IFPI later bound the RIN in a format that resembles a school yearbook. This is a fitting appearance for the IFPI as it contains a year-in-review for the major record labels of the global recording industry. The visual appearance of RIN has changed from year to year with changing publication technology, but also with what appears to be a changing audience for the publication. As a result, the RIN has evolved from a dry report of data with little commentary to a colorful publication with extensive commentary on the part of the IFPI.

The binding of the report is important because it is not readily available in a digital format, which makes it difficult for researchers to access. Interestingly, other data reports produced by the IFPI are readily available digitally on its website. First appearing in 2004, the Online (later Digital) Music Report aims to “raise awareness of the developments in the online music market, and in doing so, help accelerate them” (Berman 2004, 1). The Digital Music Reports, produced by the IFPI, have the effect of overstating the harm to the recording industry by file sharing and highlighting the virtues of using online retailers. So it should be of concern that the copyright green paper circulating in Washington, DC extensively cites the Digital Music Reports. Additionally, the IFPI released two free reports entitled Investing in Music in 2010 and 2012, which emphasize the investment that major record labels make in artists. Both the Digital Music Reports and the Investing in Music Reports give the IFPI a free public platform to express major record level benevolence and marauding pirates’ malfeasance; this allows the IFPI to perpetuate an easily accessible narrative about how piracy is killing the music industry. However, the access to RIN is nowhere near as simple because the reports problematize a more simplistic and readily available narrative.

In my first attempt to use RIN, I had to obtain the reports via interlibrary loan from libraries across the United States. A number of reports were not available in any libraries for some editions. This created my first barrier to in-depth research on these reports because some libraries have a 24-hour checkout limit on the reports. Where the IFPI aims to make transferring music online impossible with the use of Digital Rights Management (DRM), they have been equally as active at making RIN “wired shut” (Gillespie 2007) in both the digital and material editions. For instance, the 2013 edition PDF of RIN is available on the IFPI’s website for 1-3 users: £750; 4-10 users: £1500; 11+ users: £2250, the PDF and hard copy are available for an additional £150-300, and excel data are available for an additional cost ( These costs are too high for an individual researcher to purchase on their own. Fortunately, after an extended negotiation, my university was able to purchase hard copies of the report from 1994-2012.[1] However, the IFPI would not sell PDF versions of RIN to the university because the trade organization does not want the reports readily available online – even if behind a university library firewall. At the same time, the IFPI made my university library sign an agreement that it would not allow the public to take RINs off campus; in one conversation that I had with the IFPI, the representative who I spoke with compared a university library with an IFPI member like Apple by stating that Apple employees are not allowed to remove RINs from Apple’s “campus.” This agreement creates a physical limitation similar to the limitation of DRM by restricting information from being free. These limitations have the practical of effect of RIN being rarely analyzed through academic research because it is so difficult for researchers to obtain the entire archive for close research.

Importance of Reports: Candid Industry

Since these reports are so difficult to obtain from the exorbitant costs to the draconian limitations on access to the reports, there is a degree of freedom, on the part of the IFPI, to express its view of the state of the recording industry. Why is it so hard to get this information? Frankly, there are moments of candor in RIN that directly contradict what much of the recording industry conveys through press releases, Congressional testimony, and news interviews.

Publicly, the Recording Industry Association of America (RIAA) claimed that the peak and decline of the CD media format was a direct result of file sharing. However, at the zenith the RIAA’s public rhetoric, the IFPI was much more nuanced about the decline of the CD. The IFPI acknowledges that there is reason to believe that “the recent fall in CD sales [is attributable] to a maturation of the ‘CD-replacement cycle’ in the largest markets, whereby consumers have repurchased albums on CD that they had previously bought on cassette or LP. The amount of direct replacement of titles purchased on CD has never been researched and is unknown” (IFPI 2002, 8). In the North American market, the IFPI also claims that the CD’s decline was linked to “uncertainty about the economy,” and “increased competition from a revived gaming industry and DVD video” (IFPI 2002, 24). In the “Introduction” to the 2005 edition of RIN, IFPI’s Market Research Director, Keith Jopling, is quite candid:

The music business is emerging from a period frequently described in recent years as a ‘crisis’. The year 2004 was the industry’s best year-on-year performance for five years – and while tough times lay ahead, the industry has clearly turned a corner . . . Demand for music, in all forms, is higher than it has ever been before. And entertainment sectors related to music, or that use music, are growing. But there are big challenges for the music market too. Internet piracy is the greatest of them, but it is by no means the only obstacle to growth. Consumers are spending more on other, newer entertainment products such as DVD and games. They are also spending more on mobile phones, internet and other ‘subscriptions.’ (IFPI 2005, 3)

So while the IFPI and domestic recording industry trade associations were publicly blaming file sharing as the culprit for the decline of CDs, the IFPI was being quite candid that the free market, recession, and a buying cycle contributed to the format’s decline. This quote reveals the complexity of the recording industry’s challenges with digital media; however, Jopling ensures that industry readers keep the piracy panic narrative at the forefront of all discussions about digital music. All of this makes the archive useful for researchers, but it must be recalled that the IFPI remains a trade organization.

Data Contained

As the self-described “definitive source of global music market information,”[2] RIN provides fairly consistent sales information about the music commodity each year. This allows the researcher to track sales of the music commodity across sales categories. Its global scope creates opportunities to understand the variegated music consumption patterns in different countries. RIN exhibits information at three levels World, Regional and National. This information is gathered through local trade industry groups such as the Recording Industry Association of America (RIAA) in the United States and the British Phonographic Industry (BPI) in the United Kingdom. National reports of sales figures are synthesized at regional and global levels, so nation-based trade organizations produce a narrative through data that is then appropriated by the IFPI.

The RIN reflects consistent shifts in the production of the media format of the recorded music commodity. In early editions of RIN, sales data were limited to LPs (i.e. vinyl), cassettes and CDs. In subsequent editions, everything from music videos to streaming audio is included in RIN. However, from year-to-year there can be significant changes in the commodity information present in a given edition. Fortunately, at the end of each decade, the IFPI provides more data on the previous decade, which allows the researcher to see broader trends. For instance, the short-lived minidisc, which some hailed as the CD’s future predecessor, first appeared in the 2000 edition, but was no longer included by the 2002 edition; interestingly, the minidisc hit its peak in Japan in 1999 with 0.2% of recorded music sales (IFPI 2001). In 2002, music videos made their debut as a commodity in RIN, but in the years since, sometimes they are classified as music videos and at others they are classified as “other” or further broken down by VHS and DVD; this points to some of the discrepancies that occur in trying to analyze RIN data. While singles are a consistent sales category in all editions of the RIN, online singles are added to the singles category beginning in the 2004 edition. The following year (2005), the IFPI began reporting on digital singles and digital albums.

Unit shipments vs. unit sales

The reporting strategy of the IFPI is based on shipments as opposed to sales, which differs from other reporting strategies such as Nielsen’s SoundScan. A shipment includes all units sent to retail outlets for sale, but the retail outlets do not necessarily sell all of the units that the labels send to them. As a result, record labels buy back unsold units from music retailers. These buyback programs are the lifeblood of music retailers because there is no way for them to predict how much product to purchase ahead of an album release; the major record label buybacks eliminate uncertainty for music retailers. However, the number of units left unsold is not included in the IFPI’s data.

The discrepancy between actual sales and unit shipments is easily obtained by referring to Nielsen SoundScan data. Unlike the IFPI’s data, Nielsen SoundScan grounds its information by using a point-of-sale (POS) system that uses barcodes and computer technology to log each purchase of an album. SoundScan was initially developed to circumvent a survey methodology that Billboard Magazine used to obtain sales information by talking to record store clerks to determine the Billboard charts. Under the survey methodology, record labels would give record store clerks promotional goods in return for them telling the Billboard survey that they sold more of a particular album or single (Watkins 2005). Billboard used the surveys because they realized that shipment data were inaccurate; with SoundScan, Billboard recognized that it could get very accurate data on album sales. Of course, this new system was met with resistance by the recording industry because it shifted the actual best-selling artists and disrupted the major record labels’ marketing strategies.

The continued use of unit shipment data by the IFPI creates discrepancies between actual sales and the data available in RIN, especially for the sale of physical units. However, the fact that the IFPI still relies on unit shipments instead of actual sales helps point to broader shifts in the industry. For instance, by delving deeper into the shrinking gap between unit shipments and unit sales, a researcher could discern the role of big-box retailers, shrinking artist rosters at major record labels, and the role of POS and just-in-time delivery. As a result, the IFPI’s data are intentionally skewed, but still stand as a useful archival resource because it demonstrates different trends than those found in more readily accessible archives such as Nielson.

Different data archives offer different information about the music industry. Figure 1 shows a striking distinction between the Recording Industry Association of America’s (RIAA) shipment data and the Nielsen SoundScan sales data on CD sales from 1995-2008.[3] The graph shows a consistently higher assessment on behalf of the industry and a fairly consistent shrinking of the gap over those years from a high of 330 million units in 1996 to 24.7 million units in 2008.

Beyond archive specific discrepancies between recoded music shipped and recorded music sold there are discrepancies within the IFPI’s archive pertaining to what exactly counts as a unit of music. The counting of units remains fluid throughout the RIN yearly reports because the IFPI changes what counts as a unit. In the important “Glossary” page of each edition, there is a description of how the numbers in RIN are calculated. For each year there is a remark that reads “Total units: calculated as the total album equivalent – three singles are counted as one album. Sales in all formats included” (IFPI 2004, 2). This statement is included from 1994-2005 and is fairly consistent in language. However, in the 2006 RIN there is no mention of how unit sales are calculated. When the unit sales description re-emerges in the 2007 edition, it reads “Units: measured in ‘packages’ i.e. a double disc CD is counted as a single product” (IFPI 2007, 1); this change is not contextualized in the text. While using an entirely arbitrary number (three singles = one unit), it was at least clear prior to 2006 how units were calculated. If three million singles were sold in 2004, the IFPI calculated this as one million units sold. Beginning with the 2007 report it is no longer possible to estimate how the IFPI counts sales of singles. This is especially disconcerting considering that the IFPI began to count digital singles in 2004 because it puts all unit data in flux from 2004-2006 (are three digital singles = one unit?) and the data became more abstracted beginning in 2007.

While individual record labels track their own sales data, unit shipments allow the recording industry to obscure actual sales. The elasticity of this data shows that the RIN creates a space for the recording industry to fabricate data. With data that support the industry’s narrative of decline, the RIN inhibits the production of an ideology about piracy on the Internet.

Retail Value

Since the IFPI has a seemingly arbitrary way of defining units, one that does not reflect retail value, for example, three singles will not equal the price of a CD, and a collection of CDs recorded as a unit, will not equal the purchase cost of a standard CD. As a result, one of the more elusive and least helpful aspects of RIN is the calculation of retail value. Two overarching questions are left unanswered in these reports: How much money is actually spent on recorded music each year? How does that number relate back to record label profits?

The IFPI gives information primarily based on the suggested retail price and the number of shipments of units. In most editions of RIN, the IFPI defines retail value as an “estimate of the final value paid by the consumer for the purchase of a music product, inclusive of relevant sales taxes. For US sales, dollar value reflects shipments at suggested retail list prices as per RIAA published statistics” (IFPI 2005, 2). However, the suggested retail price of music is a notoriously inaccurate measurement because 1) stores rarely sell music at the retail value, and 2) they often sell promotional albums that they receive free from record labels. Since the IFPI calculates total world revenue based on an inaccurate “average” retail price multiplied by an overinflated estimate of record sales that is based on record shipments, the revenue data in RIN are used by the IFPI to construct a story about the recording industry. The data used create a narrative that does not reflect the actual condition of the recording industry.

While the IFPI puts a significant emphasis on recording industry revenue, there is no information on recording industry profit. Profit for the recording industry is equal to the revenue earned from the sale of music minus the costs that go into producing, distributing, and selling music. Since the revenue data are based on pure speculation, it would be impossible to ascertain profits from these figures; additionally, the major record labels are divisions of larger corporations that only share information on overall corporate profits and revenues, but do not have to elaborate on their divisions. There exists no data collection/interpretation strategy that will enable a transparent understanding of recording industry profit.

Although the IFPI does not and cannot adequately describe industry profit, there is a deficiency of information on the costs of production, distribution and retail in RIN. However, there are at least five gaps in recording industry costs in the RIN reports: 1) number of studios and the cost of those studios, 2) royalty payouts, 3) album manufacturing costs (ex. the cost to manufacture and package a CD), 4) studio musician wages, and 5) album shipping. Without any of this information, even from the industry’s own estimates, it is nearly impossible to calculate the profit of the recording industry. However, this is precisely the task that culture industry researchers must embrace to better understand the dynamics of the broader music industry and its relationship with the recording industry. As things currently stand the recording industry is constructing a crisis narrative about its ever-shrinking profit, but as a result of inadequate data collection, there is no evidence to demonstrate the shrinking of profits. By creating a narrative about profit loss, the IFPI uses its power to create knowledge to enhance the major record labels’ power in the broader music industry.

Performance Rights and Synchronization Licenses

At the beginning of this essay, I quoted Simon Frith saying that the IFPI was created to protect performance rights. Ironically, the IFPI did not begin to report data on performance rights until the 2005 edition of RIN over 70 years after the organization’s foundation. The 2005 edition of RIN reads:

IFPI is publishing global performance rights collections for the licensing of sound recordings and music videos. Licensing income from both radio and TV broadcasting and public performance – such as the use of music or videos in nightclubs, bars, restaurants and hotels – is an increasingly important revenue source for record companies. (IFPI 2005, 20)

If the IFPI has been concerned about performance rights since its inception, why is 2005 the first year that the IFPI began publishing data about performance rights in RIN? Much like shifts in technological modes of reproduction such as the introduction of digital music can be gleaned from archival data, the inclusion of performance rights reflects the increased use of synergy in the cultural industries over the last decade. Nightclubs, bars, restaurants, hotels, television, radio and movies have been licensing music from record labels since the early days of the recording industry, but the process has accelerated recently as a result of large corporations using their different divisions (i.e. television, music, and consumer electronics) to cross-promote each other (Hesmondhalgh 2007, 166). Each time a song is played, performance rights must be paid to the rights holder, even if it is the same parent corporation that is performing the song. In order to understand these changes, the IFPI has become more interested in tracking how music is being used across media since 2005.

Furthermore, these synergistic activities do not stop at the boundary of the corporation, but rather, there is an increasing usage of music across media formats. The IFPI is well aware of these changes and the newer editions of RIN demonstrate an attempt on the part of the recording industry to quantify the increased revenue stream from performance rights. Licenses for both copyrighted songs and sound recordings are an important source of revenue for major record labels and publishers. A license must be issued by the copyright holder every time that another entity would like to reproduce a copyrighted work. Synchronization license is the term assigned to licenses that allow music to be reproduced in videos (Hull 2004, 57). These licenses are a large source of revenue for the major record labels, but the public reporting of this data is generally non-existent or partial at best. For instance, Billboard reported, in 2002 “retail sales of music-generated licensed properties topped $1.5 billion” (Traiman 2003) for everything from music licenses for recordings and songs to licenses of musicians’ likenesses. However, there is no accounting for this type of revenue in RIN or the RIAA’s database. In 2009, the RIAA began publishing information about synchronization revenues and reported over $200 million in this type of licensing revenue (“Year-End Industry Shipment and Revenue Statistics” 2013); however, it is unlikely that revenues went from zero to $200 million overnight and there is no attempt to account for synchronization revenue prior to 2009. The IFPI began reporting synchronization data in 2011 and reported $324 million that year, but again there is no indication of the revenue generated from previous years.

It can be costly to license a popular song by a popular artist for use in a TV show, movie, or video game. Billboard reports that Rockstar Games, maker of the popular “Grand Theft Auto” game franchise, “is paying as much as $5,000 per composition and another $5,000 per master recording per track. If that deal applied to all songs, Rockstar’s soundtrack budget may exceed $2 million” for “Grand Theft Auto IV” (Bruno and Butler 2008). With an increasing number of video games licensing music in the game, the revenue from synchronization is staggering, but again, the RIAA and IFPI have only recently began releasing reports on synchronization revenues. This includes games that have soundtracks, such as “Grand Theft Auto,” and games that make music the central theme, such as “Guitar Hero,” “Rock Band,” and “Dance Dance Revolution.” Needless to say, the recording industry recognizes that there is a lot of revenue to be earned from utilizing label catalogs in video games. Since Billboard estimated that over $1.5 billion was generated in revenue in 2002 before the widespread usage of synchronization licenses in video games and the RIAA and the IFPI are reporting considerably less a decade later, there is a substantial amount of revenue being excluded from the industry’s data.

Beyond the rise of synergy in recent years, there has been an increased interest in copyright enforcement as it pertains to recorded music. Copyright infringements are one explanation given by the industry for shrinking profit margins, as part of the crisis narrative. The IFPI wants to ensure that any business that uses music for profit pays for its usage as required by copyright. For instance in 2011 the RIN states: “Businesses that use recorded music to attract and retain customers drive productivity and motivate employees increasingly pay a fair price for doing so wherever they are located. Music is used in a vast range of commercial contexts, from bars, shops and nightclubs to radio and television broadcasts” (IFPI 2011, 28). Hidden underneath this rather banal statement is a desire, on the part of the IFPI, to hunt down the bad guys that are exploiting music for profit without compensating record labels. In the next paragraph, the IFPI reminds us that these “businesses are required by law in most countries to pay performers and producers when they use their work” and follows this statement by implying that the US’s exception for analog radio and the Japanese exception for entertainment venues must be changed to adhere to this basic principle (IFPI 2011, 28). It is vital for culture industry researchers to observe these passive statements within the RIN and relate them to broader systems. At these moments in RIN, the IFPI propagates ideology by making moral appeals about how laws work in other countries without situating the reasons that one country may have one set of laws that differs from another country’s laws. Which is one reason non-industry data collectors and interpreters need to examine the data in RIN closely.

The Broader Music Industry

As I mentioned above, the IFPI periodically includes a section on “the broader music industry.”[4] The following categories are generally in this section to provide side-by-side comparison: radio advertising revenues, recorded music retail sales, live music sector, musical instrument sales, portable digital sales (i.e. hardware that plays digital music), audio home systems, songwriter musical copyright, music TV/magazines advertising revenue, music related video games sales, and performance rights market. These categories are interesting for culture industry researchers because they demonstrate what the IFPI considers its competitors and its allies. For instance, by providing information on consumer electronics (i.e. hardware), record labels can estimate the media format on which they should produce their music. On the other hand, radio-advertising revenues loom large (consistently higher than retail music sales) and there is a consistent message that analog radio should pay performance rights in different issues of RIN.[5] This is especially true with the live music sector which, for instance, “increased by 4% globally in 2009” (IFPI 2010, 24) – an indication why the recording industry is increasingly interested in 360 deals.[6] In the 2008 and 2009 editions of RIN, the broader music industry section indicates that the IFPI was paying special attention to music video games by including a picture from Guitar Hero in the issue (IFPI 2008). Furthermore, the IFPI asserts that recorded “music is part of, and the driver of, a much broader music sector comprising a range of commercial activity based around music” (IFPI 2011, 26). By claiming that recorded music is the “driver of” the broader music industry, the IFPI declares that all other types of music commodities derive from the recorded music commodity. These seemingly minor sets of data within RIN are some of the more useful data for culture industry researchers because they illuminate what the IFPI conceives as their allies and competitors.

World Rankings and Global Data

Every edition of RIN contains a section entitled “World Rankings” that ranks each country included by the IFPI in relation to the percentage of the total world sales based on retail value. However, some years both the ranking by retail value and ranking by volume are included in tandem. When both data sets are presented in tandem, some interesting contradictions between the two accounting figures demonstrate an interesting dynamic, namely the variation between the two rankings. For instance, in the 2001 edition of RIN, it demonstrates that the US accounted for 38% of the retail value of music in the world, but that same year, the US only accounted for 31% of the total units sold (volume) (IFPI 1996, 10–13). Furthermore, culture industry researchers may be interested in the difference in ranks between the two methods of presenting data; for example in 2000 the UK ranked third in retail value with Germany in fourth, but when measured in terms of volume, these two countries are reversed (IFPI 1996, 10–13). By looking closer at this data, culture industry researchers may begin to discern systemic patterns in recorded music sales.

The majority of any given issue of RIN is dedicated to country specific data. This presents researchers with data from unit and retail value to population and income per capita. Each year slightly different data are presented, but the IFPI consistently reports unit sales (usually shipments) and retail values. An important part of this information for the recording industry is hardware penetration. In different years that could be anything from compact penetration to broadband penetration – depending on the hardware that the industry is most concerned with at that moment. A consistent part of the country specific data is per capita unit sales and per capita money spent on music. While these data fall short because of inequality within a country (i.e. if the average person spent per capita is $50, some people may spend $0 on music while others spend $100), it is an interesting statistic for culture industry researchers to explore.

Legitimate Music

“Legitimate music” is a term that consistently appears in these reports. However, there is no standard definition for what counts as “legitimate.” For instance, above I discussed how the IFPI feels that analog radio stations are exploiting the use of recorded music, but it is not clear whether the IFPI would label this use of music as illegitimate. What is legitimate? The IFPI clearly believes that music sold and/or authorized by IFPI members is legitimate, but it is not so clear that the IFPI believes that non-member record labels or recording artists are as legitimate. This is an additional point where the IFPI uses RIN to use ideology to transform definitions and knowledge about the rules that govern record production, distribution, retail, and consumption. The IFPI’s constructs a binary between legitimate/illegitimate music in order to advance its ideological position about digital music distribution.

As early as the 1996 edition of RIN, the IFPI used the term legitimate. In that edition it reads “PIRACY is measured as the level of piracy as a percentage of total (legitimate and pirate) sales” (IFPI 1996, 2). However, this definition is circular because it defines “piracy” as that which is not legitimate: piracy = illegitimate. What is piracy? Law professor Jessica Litman defines piracy as “about folks who made and sold large numbers of counterfeit copies” (Litman 2006, 85). Another legal scholar, Lawrence Lessig, defines commercial piracy as “unauthorized taking of other people’s content within a commercial context” (Lessig 2004, 62). In both cases there is an emphasis on unauthorized reproduction of copyrighted material through commercial exchange. We can safely assume this is the IFPI’s definition, but the IFPI is not being explicit here. Furthermore, in the 1990s the RIN’s main goal, in general, seems to be to increase awareness of commercial piracy in the Global South. The individual country profiles provide explicit information on the consumption of recorded music through industry-authorized channels. In other words, if we take the per capita sales data seriously, in some countries (primarily in the Global South) this number is artificially low because instances of large-scale piracy are much higher. Because of global inequality, there is a demand for cheap music on a black market supported by unauthorized reproduction of copyrighted material. By labeling this material as illegitimate, the IFPI hoped to compel states and intergovernmental organizations, such as the World Trade Organization (WTO), to intercede in the music black market on their behalf.

This discussion about legitimate music consumption takes a sharp turn in the 2000s as the IFPI becomes more concerned with file sharing as “illegitimate.” In fact, the term reemerges with regard to the Internet in the 2000 edition of RIN as it points out that the “internet is emerging as a vitally important medium for disseminating recorded music. Legitimate sales of music over the internet were at a very low level in 1999, despite an exponential increase in unauthorized music files” (IFPI 2000, 6). Here we have no idea what a “legitimate” sale of music is on the Internet, but the IFPI identifies “legitimate” as the opposite of “unauthorized music files.” Who is the authorizing authority? We can get an idea from Lessig and Litman that authorized content is licensed by the copyright owner, but there is not a clear delineation under the law that non-commercial distribution of music violates any copyright law (Litman 2006). Additionally, the IFPI includes explicitly legal practices, such as the use of CD-Rs, as piracy.[7] Beginning with the 2001 edition of RIN, the IFPI became fixated on developing “legitimate” outlets for online music consumption.

The issue of legitimacy is important because of the position this question plays both in the popular imaginary and the policy arena. As Congress prepares to debate copyright policy, the current copyright green paper (IPTF 2013) makes extensive use of the term “legitimate” in a way that comes directly from RIN. In fact, the green paper uses the term “legitimate” 36 times without one explanation of what the term means in context (IPTF 2013); however, from the Internet Policy Task Force’s language, it is clear that the term is being taken from the IFPI. The unquestioned acceptance of the IFPI constructed binary about the legitimacy of digital music distribution creates the ideological foundation that the recording industry needs to advance its agenda. By constantly repeating that one form of Internet distribution is “legitimate,” both the recording industry and the US government ensure new laws can be passed that reinforce the power of industry stakeholders.


By providing a protected space for the recording industry to communicate, Recording Industry in Numbers (RIN) facilitates the production of ideology. Through the dissemination of these reports, the recording industry constructs a consistent narrative about music sales and copyright without having to share corporate information (i.e. sales and profits). This information is then repackaged and sold to politicians and the public in order to create laws that benefit major record labels. However, the laws and regulations passed because of this information affect the production of culture and communication networks. Trade association data must be examined as a site of knowledge production and power.

From the data on record sales to the industry’s view of itself, RIN provides a picture that can help illuminate future studies on the music industry. However, as these industry reports have grown in popularity, there has been a marked difference in content and delivery. For instance, the 2011 and 2012 editions have advertisements for Spotify on the back covers; on the inside of these editions, there is more rhetoric that resembles the language that the recording industry uses to address the public. Regardless, these reports remain an untapped resource for culture industry researchers to evaluate critically. While a number of researchers periodically use reports from specific years to enhance their research, there have been relatively few large-scale projects using RIN. Throughout the 1990s, Dave Laing wrote a series of critical reports in the “Middle Eight” section of Popular Music. And in 1997, Dave Harker published “The Wonderful World of IFPI” in Popular Music, which analyzes the way that the IFPI constructs the “world” in its publications. Because IFPI policies restrict access to RIN, there has been limited research done with the archive. More research that uses RIN with an eye towards other sources of information will counter the dominant narrative constructed by the major record labels about the state of the music industry.


Berman, Jay. 2004. Online Music Report. London: International Federation of Phonographic Industry.

Bruno, Antony, and Susan Butler. 2008. “Auto Focus: As ‘Grand Theft Auto’ Rewrites Gaming History, The Music Biz Gains Big.” Billboard, May 3.

Frith, Simon. 1988. “Copyright and the Music Business.” Popular Music 7 (1): 57–75. doi:10.2307/853076.

Gillespie, Tarleton. 2007. Wired Shut: Copyright and the Shape of Digital Culture. Cambridge, Mass.: MIT Press.

Harker, Dave. 1997. “The Wonderful World of IFPI: Music Industry Rhetoric, the Critics and the Classical Marxist Critique.” Popular Music 16 (1): 45–79. doi:10.2307/853437.

Hatch, Orin. 2000. Music on the Internet: Is There an Upside to Downloading?. Washington, D.C.: U.S. Government Printing Office.

Hesmondhalgh, David. 2007. The Cultural Industries. 2nd ed. Los Angeles ; London: SAGE.

IFPI. 1996. “Recording Industry in Numbers.” International Federation of the Phonographic Industry.

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Intellectual Property Theft: A Threat to U.S. Workers, Industries, and Our Economy. 2013. Fact Sheet. Washington, D.C.: AFL-CIO, Department for Professional Employees.

IPTF. 2013. Copyright Policy, Creativity, and Innovation in the Digital Economy. Green Paper. Washington, D.C.: The Department of Commerce Internet Policy Task Force.

Lessig, Lawrence. 2004. Free Culture: The Nature and Future of Creativity. New York: Penguin Press.

Litman, Jessica. 2006. Digital Copyright. Amherst, N.Y.: Prometheus Books.

McLeod, Kembrew. 2005. “MP3s Are Killing Home Taping: The Rise of Internet Distribution and Its Challenge to the Major Label Music Monopoly.” Popular Music and Society 28 (4): 521–31.

Robertson, Kirsten, Lisa McNeill, James Green, and Claire Roberts. 2012. “Illegal Downloading, Ethical Concern, and Illegal Behavior.” Journal of Business Ethics 108 (2): 215–27.

Siweck, Stephen. 2006. Copyright Industries in the U.S. Economy: The 2006 Report. International Intellectual Property Alliance.

———. 2007. The True Cost of Sound Recording Piracy on the U.S. Economy. Institute for Policy Innovation.

Watkins, S. Craig. 2005. Hip Hop Matters: Politics, Pop Culture, and the Struggle for the Soul of a Movement. Boston: Beacon Press.

[1] After review, I will include information about the university to promote this archive as a resource for music industry researchers.

[2] The first time that IFPI used the tagline “the definitive source of global music market information” was the 1999 edition of RIN.

[3] The RIAA is the organization that provides data on shipments in the United States for the IFPI. Here I am referring to the RIAA’s data because it is the source of the IFPI’s data.

[4] See (IFPI 2006, 12–14; IFPI 2007, 17; IFPI 2008, 18; IFPI 2009, 23; IFPI 2010, 24–25; IFPI 2011, 26–27)

[5] For instance, the IFPI explains that the “largest sector underpinned by recorded music sales is the global commercial radio advertising market, which is worth $US 30 billion a year, according to PWC. Record companies provide the radio stations with the content they need to attract the audience that advertisers want to reach. However with around 5% of advertising revenues flowing back to record companies, radio networks currently squeeze incredible value from recorded music” (IFPI 2006, 12) The point here is that the IFPI expect to receive more revenue from radio, and they do not acknowledge that radio acts as free advertising for their products.

[6] A 360 deal is a record contract that covers “360 degrees” of an artist’s career. In exchange for an advance, record labels can control recording, touring, artist’s image, television performances, merchandising, etc.

[7] The IFPI claimed that 2001 “was the year when file sharing, downloading and CD burning became more popular across all regions of the world and commercial piracy increased due to the popularity of the CD-R as a pirate format” (IFPI 2002, 3) However, the Audio Home Recording Act (AHRA) of 1992 not only makes CD burners explicitly legal, but also instituted a royalty system that gave a percentage of the revenue of all blank music CDs to major record labels.


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