This week's CRIA release reminded readers that several months ago the organization generated an enormous amount of interest when it trumpeted an "unprecedented" decline in sales for the first quarter of 2007. Graham Henderson was quoted as saying that "we've experienced sizeable short-term drops before, but nothing compares to the drastic numbers we're seeing so far this year." At the time, I noted that it was worth asking whether the comparison was fair given the change in CRIA's membership in April 2006 when six major indie labels left the organization (the April 2006 – March 2007 numbers should include a decline to reflect the loss of those labels).
Two months later, the numbers appear to bear this out. Looking at units shipped from April 2006 to March 2007 – the 12 month period following the departure of the Canadian labels – CRIA reports a decline in 11 of the 12 months (one month was flat). The overall numbers indicate a 12 percent decline over the prior 12 month period. Obviously, some of that decline must have arisen from the change in membership.
Interestingly, the numbers on either side of this 12 month period are far better. In the three months before the indies left CRIA, units shipped were up 3 percent for the year (the decline began immediately after the indie labels were excluded from the data). The last two months – the first apples-to-apples comparison – are even better. In April 2007 (just as CRIA was issuing its release), units shipped were unchanged from the prior year, a far cry from the large decline of 26% experienced only a month earlier. The May 2007 numbers show an increase – a 2 percent increase in units shipped and a 6 percent increase in the value of the shipments. Moreover, other formats (presumably including digital sales) were up 306% over the prior year.
While it is still too early to reach any definitive conclusions, the data seems to suggest that the poor performance in the first quarter of 2007 has little to do with piracy or copyright related issues. Rather, the explanation is far simpler – CRIA was comparing 2006 sales figures (which included sales from Nettwerk, True North Records, and four other labels) with 2007 sales figures (which did not). Once the comparison shifts to the same CRIA (ie. CRIA without the indie labels), its numbers actually show an increase in units shipped and revenue.