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How the RIAA Works


The RIAA and the Changing Music Industry

It wasn't all that long ago that listening to music meant buying a vinyl recording, laying it on a spinning turntable and dropping a needle into its grooves. Then came compact discs, first available in 1982, which used a digital, not analog, method of recording and reproducing sound [source: Beschizza]. Having music in a digital format made it easy to create a perfect -- and perfectly free -- copy of a recording, with no loss of quality. The RIAA saw that counterfeit CDs could carve a big hole in members' profits.

Then, iTunes and other online music stores came along. Downloads rapidly began to compete with physical recordings in terms of sales. In 2010, as many digital downloads were sold as physical recordings [source: RIAA]. Today, more than 11 million licensed digital recordings can be had at the click of a mouse button. What's more, a single hit can generate everything from DVDs to mobile downloads to ringtones.

The RIAA has tried to keep up with all these dizzying changes. They pull together statistics to track sales in the various formats -- including CDs, cassettes and mp3 downloads -- by units and value. For example, in 2011, 1.3 billion digital downloads of singles were sold for $1.5 billion, while 241 million CDs were sold for $3.1 billion [source: RIAA]. The RIAA also conducts special studies about things like the economic impact of the music business, and its databases closely track trends in various genres of music.

As technology has changed, the RIAA has collaborated with other groups to create standards for music recordings, including the following [source: RIAA]:

  • International Standard Recording Code. This assigns every recording a unique number so that it can be identified.
  • Watermark Payload Program. This is a code embedded in a recording that indicates any parental advisory, the copyright status and owner, and the distribution channel.
  • Global Release Identifier. This code identifies the source and distribution channel of digital copies of music.
  • Digital Data Exchange. This sets standards for efficient exchange of digital music so that recording companies can easily make music available to retailers.

Another more recent addition to the RIAA to-do list is overseeing streaming music services. Internet services like Pandora and Spotify pass on music to customers in a form that they can listen to but not copy. These companies pay a royalty for every song they use. Radio stations of course offer a similar service, but pay a much lower royalty. It's up to the RIAA to negotiate with the streaming companies and work out a fair level of compensation [source: Sisario].

In addition to these routine matters, the RIAA has had to grapple with one modern-day issue that poses a threat to the very existence of the industry: music piracy.