Music Industry P2P Claims Dismantled

Canarock writes "First Monday runs a great article this month from Canadian law professor Michael Geist that dismantles the recording industry's claims about the peer-to-peer. Using actual data from Canada, Piercing the P2P Myths, demonstrates that the loss claims are greatly exaggerated and that P2P has had little, if any impact on the income of the artists themselves." From the article: "The Canadian government has been the target of intense lobbying for stronger copyright legislation in recent months. Led by the music industry, which claims that it has experienced significant financial losses due to music downloading, the campaign culminated in November 2004 with a lobby day on Parliament Hill."

Comments

Re:Admit it.

[nkh]

I can't find anything worth it.

Why don't you just ask? Yesterday I asked a friend (who owns a comic shop) what kind of music he was listening to and he gave me a huge list of good stuff to buy from all around the world. There is an almost infinite amount of music we'll never listen to and you don't know what you're missing. I ended up buying brazilian and indian records (when I usually listen to hard-rock and black metal).

Well...

[nameless_child]

There's good music out there. They just seriously neutered the end user's ability to find the kinds of music they liked after the Napster death. (Which really felt like what I imagine the Woodstock 69' era would've felt like.)

This industry's falling is going to be like what Microsoft's death will end up being in 20 years (if not sooner.)

Irony

[Anonymous Coward]

One of the key ironies of the debate is that the CRTC (Canadian Radio and TeleCommunications standards body) demands that radio stations and TV contain a certain amount of Canadian content. Instead of spending several billion propping up the music cartel, if they spent it on the artists and uses P2P to spread the content, there would be a Canadian content boom in Canada and the US (since it would be legal to download local bands, as well as Bare Naked Ladies, Rush, Steppenwolf, The Tragically Hip, Bryan Adams, April Wine, Colin James, Neil Young, Alanis Morissette, The Guess Who, Odds, Our Lady Peace, Sarah McLachlan, Avril Lavigne,...)

If the government locks up music and other media, all it will end up doing is giving the market to the biggest "legitimate" distributors (i.e. Americans), and turning our artists into American look-alikes. Celine Dion's music actually wasn't that bad in the beginning before she became americanized to break into the bigger market. She should surve as a warning as what can happen to you if you let the american media machine get to you.

I disagree, a personal example

[DoorFrame]

Ok, I admit it. I'm the person the RIAA should be blaming. You can all mark it down as my fault if you want. I'm the one who stopped buying CDs when P2P came along.

No, really.

I haven't bought a CD in 6 or 7 years. They're very expensive and file-sharing is free. Yes, I feel a little bit guilty about it, but there you have it.

I don't think that everyone is like me, but I really have to admit that I believe that file sharing is indeed costing the music industry money, just in the same way that CD bootlegging cost them money in the past. It's probably not a tremendous amount, I never really bought that many CDs to begin with, but it's certainly something.

So, for all of who argue that file sharing doesn't cost them money, keep in mind there are people like me. File sharins has cost them money from me, probably several hundred dollars.

Now let's hope they don't bash down my door.

As a owner of a music store

[Jedikahuna]

I can tell you that it is not P2P that kills my sales it's Fucking Wal-mart. I pay whole sale what wal-mart has on the retail price. I make all my money off Parental advisory Cd's if Wal-Mart would start selling unedited Cd's I'd have to go out of business. When is the U.S. Government gonna start to place the blame on the shoulders of major corporations instead of on the kids that want to here the music before they buy it?

Indie

[fwice]

When I was younger, I used to purchase a ton of cd's. It was what I spelt my allowance on -- my choice.

But as I got older, I started to realize what a waste it was to spend $18-$20 on an album from which I would only listen to one or two songs.

So When Napster came out, I found out about it early (one of the first thousand users) and was able to ride the bandwagon on it, collecting songs that I would listen to and none of the ones that I wouldn't. I still bought CD's that were worth the price tag (the ones where every song on the album were decent and not just a crappy filler song).

Then I mostly stopped listening to new music. I've gotten a lot more comfortable listening to new, independent bands and buying their albums. Because it means more to me to give an independent band $15 for which I know $15 is going directly to the band. The quality of the music is also higher.

I've bought more CD's in the past year than I've bought since I was 12. And I feel good knowing that the money I spend is going to the artists, and not some shitty company.

Re:Economic basis of wealth

[DaveV1.0]

Your example is flawed when applied to this subject. Specifically, it is too simple and does not represent the dynamics at hand. A better representation would be as follows:

You and a friend go to a restaurant that charges $10.00 per all you can eat platter and an ala carte menu. You can:

• both spend $10 and get whatever comes in a particular platter, whether you wanted it all or not.
• both spend whatever it takes to get what you want off the ala carte menu.
• one spends a couple of bucks for an appetizer and the other gets a platter and secretly share food.
• go hungry.

This compares (not perfectly, but better) to the music industry as:

• Buy music in CDs, etc
• Listen to and record the radio, pay for downloads, etc
• Download music in violation of the copyright
• Not listen to music

Now, we bring in a new idea. All you can eat buffet for $5.00. This would equate to distribution by download. Lower price and higher margin due to lower overhead (maybe) but, also greater chance of someone getting something for nothing.

The big difference is the restaurant can enforce a "no sharing" policy for the buffet, but music producers can't. The question is: will people buy something if they can get it from a friend for free? If most people go for the free ride, then there is no profit. If the music producers don't make any money, they soon will not produce any music, just like a restaurant going out of business.

New technologies that make distribution more efficient, that open larger markets, and that increase competition can cause a redistribution, as well as the creation of, wealth.

The real question is: how viable is a business who's product can be duplicated and given away so easily using this distribution method? Will people kill the goose that lays the golden egg?

Another salvo

[UnknowingFool]

There was another /. article a few months ago about PBS Frontline's coverage of the problems of the music industry. "The Way the Music Died" details what is troubling the industry today.

Some of their conclusions:
1) The industry experienced a huge boom during the early to mid 90s as CD players became inexpensive to buy.
2) A good portion of those buying CDs were not buying new albums but CD versions of existing music in their collections.

So the music industry was experiencing golden years due to a new emerging technology and the fact that people were replacing vinyl and cassettes with CDs to augment this new emerging technology. But that behavior only lasts so long. Eventually people would have replaced their collections. They would be buying new music but not at the rates as before.

Also, although the manufacturing costs of a CD have dropped dramatically, their prices were still higher than cassettes which cost more to make. This was done for years due to collusion by the music industry and retailers to keep the prices artificially high. This collusion has been documented as part of settlements of lawsuits.

What's more important is that the industry has expected the profits to be the same as that during the boom times even though times were changing. In most industies, the newest products and prototypes are always the most expensive. When economies of scale kick in and manufacturing becomes more efficient, prices start to drop. Take for example, CD and DVD players.

At the same time, the focus of the industry was changing. By now, most music companies had been bought by large conglomerates like Sony and Vivendi. They expected quick profits and the profits to remain high. The industry began to shift its focus from acts to albums. Before it was about the artists and maintaining them. Now it was about getting the CD out. Getting the music video out. It didn't matter if the music suffered as long as the sales were made. It became about the single, the first minute.

At the same time, the radio industry was experiencing the same kind of consolidation as the music industry. Fewer and fewer independents existed. Most were controlled by a few corporations like Clear Channel.

With the music industries controlled by a select few companies, and the predominant means of distribution tightly controlled (radio and retail), the industry had now a near monopoly on music distribution.

Enter P2P. P2P threatens the industry in two ways. Although there have been music sales lost due to piracy, P2P is more threatening in that artists now have an alternative method of distribution that bypasses their control. Unfortunately, P2P gives them a scapegoat for their sales. It doesn't matter that sales should have suffered years ago due lowering prices (manufacturing cost decreases) and lowering sales (people stop replacing older formats). I suggest you watch the Frontline episode online.

Sooner or later...

[suitepotato]

...distributed file sharing, cryptography, proxies, and parity will collide and instead of any one person hosting a complete file, the file will be containerized, split, parity containers built, and the pieces uploaded to peers at random based only on their availible space and relative activity and pipe size and so on and the original copy deleted.

Enough copies of pieces and parity files would propagate out based on statistics to ensure reasonable chance to get at anything, not any less easy than eMule of today. If you download all pieces and construct successfully, the solid file isn't seen and listed by IP because only the parts are shared at large. Your whole copy is totally outside the system once gotten.

Once no one person has a complete copy of anything, and each piece is named in gibberish that only the system understands and knows, what are they going to do then? Sue a teen girl because one twentieth of a Metallica song might be on their hard drive and she's got no way of knowing for sure because her storage is managed by the collective peer network?

The technical capabilities exist right now to do it and eventually it will be reasonably perfected. They will be brought to their knees by it, sputtering and whining all the way. It will illustrate very clearly that as long as information is in the hands of individuals, as long as they can read, write, and think for themselves, effective subjugation of the unwilling by any private organization or government will be difficult short of violence or threat thereof.

I don't see a RIAA-SWAT team becoming reality in the future nor do I see work-a-day policemen putting up with the notion of being their tools. So unless it could possibly go that direction, they've lost this fight the instant they picked it. They need to cut to the chase, admit defeat, and bargain for a new understanding between producer and consumer that's acceptable to both parties.