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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."

18 of 390 comments (clear)

  1. Admit it. by ggvaidya · · Score: 5, Funny

    You know the reason for your losses as well as we do. And in case you want me to spell it out ...

    Seriously, the only reason I haven't bought a CD in ages is because I can't find anything worth it. All I'm willing to invest in now is online radio.

    1. Re:Admit it. by nkh · · Score: 5, Interesting

      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).

    2. Re:Admit it. by Seumas · · Score: 5, Insightful

      I agree, completely.

      The last time I walked into a store and bought a CD was in 1998.

      There just isn't anything on FM radio or in music stores that interests me. I'm a little too old (nearing 30) for new stuff that all sounds bland and alike to me - like Maroon, 3 Doors Down, Simple Plan - UGH! And there aren't a lot of widely distributed and advertised albums from genres I do like such as industrial.

      Additionally, I'm not interested in owning a case, liner notes and a CD. I listen to music almost exclusively on my desktop computer, on my laptop and on my portable MP3 player. And in the rare instance that I need to listen to a CD in a car - I could just burn a copy of my own music to disc. But I can't recall the last time I did that, either.

      This doesn't mean I don't buy music, though. I admit, I do download a lot of less popular things. Mostly classic rock, classical music and a lot of music from the 60s, 70s and 80s. But I also buy a lot of music. For example, I discovered "Sub Dub Micromachine" by listening to their song "Bullshit". I googled for their website, found a link to purchasing a downloadable copy of their album for $7.99 (in euros - about $10 in USD, I believe) and then added it to my collection.

      While I was at the site that handled the online distribution of this band's album, I stumbled upon a band called "Hammerfall". They sounded great from the samples. So I bought two of their albums, too.

      That's three full album sales that never would have occurred without the existance of P2P. And while I could probably have found their content for free online, I was happy enough to have discovered something new that my ears appreciated, that I gladly handed over about $34 USD.

      The thing is, because these are smaller bands, with smaller followings (and both bands are from Norway, Sweden or Germany) and they aren't part of the big labels, I suspect that their sales are not tabulated by the industry. I could be wrong, but I would suggest that a lot of the lost sales the major RIAA members are claiming (which of course doesn't seem to be legitimate in the first place) are actually legitimate sales being lost to other, rival, smaller labels and direct band sales.

      Another thing to consider is that CDs have been the major medium for some time now. So a lot of their former sales surges were probably by people looking to replenish their collection of 8-tracks and cassettes with CDs. Now that they've done so in the last two decades, they don't need to buy any more CDs. If you're a classic rock fan, there's no more classic rock being produced today - so you're not going to be buying any music. Seems logical enough.

      But when they introduce yet another medium and CDs start to fail (or CD players become hard to find), they'll see another uptake in purchases by people who haven't bought music in a decade, replenishing their collection yet again.

      Unless, of course, they decide that they're tired of paying for the same song five times over their lifespan and just download it. :D

  2. I have an MP3... by ForestGrump · · Score: 5, Funny
    --
    Is it true that more people vote for the winner of American Idol, than vote for the president? -Ali G.
  3. always seemed... by mangus_angus · · Score: 5, Funny

    kinda obvious to me why their profits were down...it's actually a simple formula:

    Talent-(Teensensations-Boybands-Onehitwonders-Yani )=profit

  4. Music Companies ? by shashark · · Score: 5, Insightful

    Music companies, music stores and the related supply chain existed, and made money because it did the job of the network -- sourcing music from the artist and providing it to the end-user. Inherently, a flawed business model in today's world. Doesnt take a rocket scientist to figure out this old-world supply chain will be dead in another few years, no matter how hard the RIAA try.

    No wonder its the supply chain that has lost the most, and not the artists. Artists will, eventually find the internet to provide their creations, and make money on it, online. May be through personal p2p networks.
    --
    All your music are belong to us.

  5. Well... by nameless_child · · Score: 5, Interesting

    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.)

  6. I've always thought that ... by Spock+the+Baptist · · Score: 5, Insightful

    The _______ industry is full of it for claiming that every ______ represents a lost sale.

    First blank: software companies, music companies, or whatever.

    Second blank: home taping, both audio & video, software coping, P2P, or whatever.

    There's a simple truth here. One may be willing to get a "copy for free" of some works, but is not willing to pay for it period.

    In other words: If "I" can't get it for free, then "I'll" do without.

    One may be willing to DL an old bubble-gum tune from the late sixties, or early seventies, but one may not be interested enough to cough up cash for it.

    A college student may not have enough money to purchase M$ Word, but uses a "pirate" copy for class work. If "pirate" copies are not available then the student would use something that is.

    1 "pirate" copy = 1 lost sale? FALSE!

    --
    "Oh drat these computers, they're so naughty and so complex, I could pinch them." --Marvin the Martian
  7. Candian Rock Star!!!????? by Anonymous Coward · · Score: 5, Funny

    From the article:

    "...Canadian rock star Tom Cochrane..."

    All the pros and cons of the article aside, does having one minor hit ("Life is a Highway") make you a rock star?

    No wonder the Canadians venerate Ann Murray!

  8. Re:And the point is? by gl4ss · · Score: 5, Informative

    uhh.. isn't the whole point in canada that IT IS NOT A CRIME currently and the music industry would like to make it one?

    --
    world was created 5 seconds before this post as it is.
  9. I disagree, a personal example by DoorFrame · · Score: 5, Interesting

    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.

  10. File sharing also increases sales by Anonymous Coward · · Score: 5, Insightful

    Many people also forget that file sharing also increase CD sales as well. Usually because of things like wider exposure of non-hit music, revitalized oldies, compilations, etc.

    For example, a long time I ago I stopped buying music instead of the very rare CD because I already had a sizable collection. Then, due to MP3's and music sharing I was exposed to more music and old music I had enjoyed, but never got. Because of that my CD purchasing has more then doubled!

    With the new music, so often it's not worth the money to buy the entire album for 1 or two good songs, and you never hear the other songs. There are several CD's I've purchased after having a chance to hear what else was on them. Plus, compilations are out there that you don't often hear about, but getting interested in finding an older song or artist has gotten me to look for where to get that song or songs, and often I find others by the same artist I want to get as well, causing me to fiund and purchase a compilation (often multi CD) that I hadn't even known existed and wouldn't have looked for in stores without the exposure.

    The entire music industry (not just the RIAA) needs to look at their distribution & profit model because of things like this. But, the RIAA seems so bent on trying to keep themselves going under there old model. In this day and age, they appear to be an archaic left over of times when they need to be in control.

  11. Amendments to the Copyright Act by SoSueMe · · Score: 5, Informative

    You can find out what is being proposed as amendments to the Copyright Act.

    I have probably violated some section by copying the text below.

    The Bill would amend the Copyright Act to implement the copyright protections required by two World Intellectual Property Organization (WIPO) treaties: the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT). Proposed amendments in this regard are as follows:

    * the existing exclusive communication right of authors would be clarified to include control over the making available of their material on the Internet;

    * sound recording makers and performers would be provided the right to control the making available of their sound recordings and performances on the Internet;

    * the circumvention for infringing purposes of technological protection measures (TPMs) applied to copyright material would constitute an infringement of copyright;

    * the alteration or removal of rights management information (RMI) embedded in copyright material, when done to further or conceal infringement, would constitute an infringement of copyright;

    * rights holders would be provided with the ability to control the first distribution of their material in tangible form;

    * the term of protection in photographs would always be the life of the photographer plus 50 years;

    * a full reproduction right for performers in sound recordings would be introduced;

    * the term of protection provided to sound recording makers in respect of their sound recordings would be modified so as to extend to 50 years from the publication of the sound recording (the term of protection provided to performers in respect of their recorded performances would be modified in consequence); and

    * performers would be provided with moral rights in their fixed and live performances.

    Internet Service Provider (ISP) Liability

    * ISPs would be exempt from copyright liability in relation to their activities as intermediaries.

    * A "notice and notice" regime in relation to the hosting and file-sharing activities of an ISP's subscribers would be provided for. When an ISP receives notice from a rights holder that one of its subscribers is allegedly hosting or sharing infringing material, the ISP would be required to forward the notice to the subscriber, and to keep a record of relevant information for a specified time.

    Educational and Research Access Issues

    * The current exception that permits the performance or display of copyright material for educational purposes within the classroom would be modified to enable students in remote locations to view a lecture using network technology, either live or at a more convenient time.

    * Material that may be photocopied and provided to students pursuant to an educational institution's blanket licence with a collective society would be permitted to be delivered to the students electronically without additional copyright liability. Provisions in this regard would apply until such time as the collective societies' blanket licenses authorize such electronic delivery.

    * In the above instances, educational institutions would be required to adopt safeguards to prevent misuse of the copyright material.

    * The electronic interlibrary desktop delivery of certain copyright material, notably academic articles, directly to library patrons would be permitted, provided effective safeguards were in place to prevent misuse of the material.

    Photography Issues

    * Treatment of photographers would be harmonized with other creators with respect to authorship and copyright ownership. At the same time, the interests of consumers in the use of photographs commissioned for domestic purposes would be protected.

    Educational Use of Internet Material

    * The government will initiate a public consultation process on the issue of

  12. As a owner of a music store by Jedikahuna · · Score: 5, Interesting

    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?

    --
    Peace, Love, And Oreo cookies
  13. Dualdiscs and "Copy Protected" CD's by bubkus_jones · · Score: 5, Informative

    I'm sure most of you have noticed the little notice that says that these discs (the CD side of a DualDisc), wont work on all cd players because they don't conform to CD standards. I see more and more CD's with that notice coming out, and I see at work (I work in a record shop, but it's not as cool as Empire Records, but, what could be?) many people trying to bring these discs back because they don't work in their players (discmans, home stereos, car players, computers, whatever), but they can't get a refund because what CD store gives refunds for open CD's? Not any I've been to. Hell, you can't even try it in the store, because even though may work in the store (which, none did in any of my store's players), it still might not work in yours.

    So, we have discs that won't work in every player, no way of finding out what players they do work in without buying one and trying it in your players (their website doesn't say more than what I've told you, http://www.sonybmg.com/dualdisc/), and then, no way of getting your money back if they don't work. What I see resulting is a growing number of pissed off customers, who will likely download the next album (and the one they did buy) before spending money on a disc that won't likely work.

    I know I don't buy any CD has that warning.

  14. Re:Economic basis of wealth by DaveV1.0 · · Score: 5, Interesting
    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?

    --
    There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
  15. Another salvo by UnknowingFool · · Score: 5, Interesting
    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.

    --
    Well, there's spam egg sausage and spam, that's not got much spam in it.
  16. Re:Very true by The+Ultimate+Fartkno · · Score: 5, Funny

    > Remember, if more than one person likes it, it's probably on a P2P network somewhere..

    Yes, but if more than one person likes it then that implies that it's accessible and that the band might have fans. If a band has fans then there will be people out there who are willing to pay for the music and as we all know, bands that are financially successful are not worth listening to.

    Me? I only listen to bands that have been forcibly removed from open mic nights and solo artists who are so brilliantly underground that they've never released any material whatsoever. The best band in the world is "The Terri Schiavo Experience" and is a solo project by my friend Eric. He's so indie he doesn't even know he's in the band.