Post Sony CD Sales Hold Steady - SoundScan

By Richard Menta - 11/24/05

With the Sony rootkit scandal making big time press the last few weeks all one reads about on thousands of Net postings is how average users are going to ban Sony CDs and the CD format in general from their lives. The noise became so load and ominous that Sony kept backing up and backing away until they finally agreed to a full recall of millions of afflicted CDs. The good news for Sony is that, so far, the issue is not making a noticable dent in sales.

Last week I contacted SoundScan to see if they could supply some early data that might give some insight into the severity of the impending consumer backlash.

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The people at SoundScan directed me to their PR contact Anna Loynes. When I asked Anna if she saw any significant fluctuation is overall CD sales, her answer was a little surprising. She said nothing unusual.

Anna supplied me with weekly sales from a cross-section of Sony artists whose records included the nasty Sony Digital Restrictions Management (DRM) tool. They include the now infamous Van Zant "Get Right With The Man" album, Celine Dion's "On Ne Change Pas", Chayanne's "Cautivo" and Trey Anastasio's "Shine". Below are the weekly sales results.

11/13/05 4500
11/06/05 4400
10/30/05 3700
10/23/05 4200
10/16/05 4400
10/09/05 4900
11/13/05 300
11/06/05 300
10/30/05 300
10/23/05 400
10/16/05 500
10/09/05 728 (first week sales tend to be the highest)
11/13/05 3800
11/06/05 4600
10/30/05 5500
10/23/05 8300
10/16/05 8600
10/09/05 12000
10/02/05 18000 (debut week)
11/13/05 6200
11/06/05 16000

Overall, the results are inconclusive, even for artists who experienced some drops in sales. Anna told me that sales are biggest during a record's debut week and so some drop off is normal. Mark Russinovich disclosed the rootkit on his blog on Oct 31st of this year. The technology press and blogs picked up the story almost immediately, while it took the mainstream press over a week before they reported on it. As far as the mainstream press was concerned the rootkit was not the story, the very vocal reaction from the Internet users was.

Initially, this reaction seems to have had no tangible effect on sales. If we look at the dates between 10/30/05 (the day before Russinovich's announcement) and 11/13/05 we find that Chayanne's album indeed dropped. But the drop occurred at a rate no faster than the weeks between 10/02/05 and 10/23/05. Celine Dion's album stayed at a remarkably steady 300 units per week between those dates. And Van Zant, the record that alerted Russinovich to the rootkit Sony was installing on CDs? It rose in sales following the announcement.

My suspicions tell me that over time some significant measure of sales will be detected as awareness grows among the record buying populace. We won't be able to measure that for sure, at least in the short run. That's because now that Sony has pulled all of the afflicted CDs from record shelves they will all be earning zeros in the sales column until DRM-free replacements hit stores.

Sony is also recalling CDs already sold so that will reduce each artist's previous sales as reflected above. And if few people actually take up Sony on its recall offer? Then Sony knows that the damage to its reputation is not as bad as it looked like it would be. The record industry as a whole would be happy about that as this scandal threatened to hurt sales across all labels with the holiday season upon us.

Time will tell how significant this will all be, but so far the only one hurting is Sony who has pulled its top sellers during the height of the Christmas sales rush.

Other MP3 stories:
BitTorrent Goes Hollywood
Bush Administration to Sony: It's your intellectual property -- it's not your computer.
Europe Groups Demand Consumer Digital Rights

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