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The Economics of P2P File-Sharing
brajesh writes "Does P2P file-sharing really affect music sales and in what ways? According to a blog entry at "The Long Tail", a paper from David Blackburn[.pdf], a Harvard PhD student, on the economics of P2P file-sharing concludes that it does indeed depress music sales overall. But the effect is not felt evenly. The hits at the top of the charts lose sales, but the niche artists further down the popularity curve actually benefit from file-trading. Form the paper - "Artists who are unknown, and thus most helped by file sharing, are those artists who sell relatively few albums, whereas artists who are harmed by file sharing and thus gain from its removal, the popular ones, are the artists whose sales are relatively high." But then "File sharing is reducing the probability that any act is able to sell millions of records, and if the success of the mega-star artists is what drives the investment in new acts, it might reduce the incentive to invest in new talent. This is, at its heart, an empirical question which is left to future work." There is also another compilation of studies on economics of P2P."
When the rest of the 'food chain' below her benefits, who cares if the one at the top, with more then they need anyway, misses out on a few potential sales.
Remember, *nothing* was stolen during the p2p transaction, so she didnt actually *lose* anything, it is only a reduction in the vague concept of 'potential' ( i.e. unprovable ) sales.
---- Booth was a patriot ----
I particularly like the Fairshare proposal floated by Ian Goldberg, in which you could "invest" in promising new artists. It gives incentive to get in on the ground floor with a little-known artist, rather than to ride the coattails of a megastar.
Any alternative would be better than the current system.
I couldn't care less about not having mega star marketeed artists... So this must be good.
... from the forgotten corner in europe
I guess it shows how cool the P2P effect is, it makes huge fuckin stars sell less CD's and undergroud ones sell a bit more.
Isn't it what anyone (except the big artists and music companies) would want to see? As someone say, that's very socialist, it's like the tax on fortune and wellfare, or whatever you call that, takes lots from the rich people and gives some to the poor ones.
Big stars all suck according to me anyway, so fuck them and don't try to make us cry because Madonna is gonna sell a few thousand less than expected on the millions she's sellin.
Reminds me of an episode of south park actually...
You just got troll'd!
I've seen some great musicians go completely without notice.
Here in the states, they only want you to buy the music that THEY can make a profit on. They don't want you buying anything other than the top sellers, so that they can sell more, and make MORE people think that the CD must be awesome. The notion of "It sells well, so it MUST be better" is bullshit, but society buys into it. Once we get rid of that, things will be just fine, because people will actually find new music they like, rather than this pop shit they push out.
And yes, I know how hard it is to play an instrument. But most of today's popular artists don't even do THAT. Basically all they do is sit there and look pretty, and maybe sing a bit. That's about the extent of it.
Show this to your friends and family that don't know what a real hacker is
I don't understand why the record companies keep coming up with more and more manufactured acts that all sound the same.
Don't they have functioning ears?
Even if they don't, can't they just compile a selection of samples from up-and-comings, and run them by a bunch of people? See what people like, then back the one that people think are good.
You'd think record companies would have figured out by now that the manufactured sound is getting old. You'd think they figure out that the reason peer-to-peer and online music stores are so popular is because there is only one good song on any given album anymore. They overplay that song on the radio and then sell albums with that song and 8 filler tracks. No one wants to buy filler!
I just bought a CD from Laibach ($CDN34)... that I already downloaded several weeks ago.
Without the labels as middlemen who shift 90% of the overall revenue into overhead costs, artists would need little if any outside "investment". Now that publishing music no longer technically requires centralized control, the industry should move to a system where artists do direct online sales through independent low-overhead sites. Instead of signing their copyrights over to middlemen, they would hire them as needed. In this new efficient market, the artists will make far more money, and the music will be much cheaper for consumers to buy.
IMHO it's a bad idea in general to tax internet connectivity (other than perhaps VAT, that is). I wondered once why hooking up to the 'net must cost anything at all. If you and your neighbour decide to exchange data (and arrange that yourself), why should you have to pay anyone for that?
The answer is: you don't. Between you and your neighbour, you'd have to pay for the connecting hardware. And similarly, you don't pay an ISP for data flowing in or out, you really pay them for setup and maintenance costs of the network equipment. The amount of data you move just may be a factor in deciding that cost.
Taxing ISP's to support artists, sort of attaches a flat-fee price tag to all music downloads (or even any download). Which is stupid. Shouldn't it be between you and the artist to decide what you pay for their music? Let us please keep governments (and ISP's) out of that equation.
Without P2P file sharing, it is costly to be popular. Become very popular, and face the need for heavy (costly) internet servers/bandwidth. P2P file sharing takes that pain away, you can be popular without bearing the distribution costs.
What I think would really benefit online music sales, would be a ubiqitous, easy to use, safe (and possibly anonymous) micro-payment system. Something that would allow any artist to hook up easily, and allow any casual downloader to hit a button, and throw a small amount of money their way.I know there are some widely used systems (PayPal comes to mind), but each of those still have some important drawbacks. Small online payments that are easy to use for anyone simply aren't here yet.
Talking about not hearing the other sides argument. The point is that small artists don't *need* a record label any more. So we don't care how they invest their money - except that suing grandmothers doesn't seem like the best use.
We also have the classic "free" vs. "free" equivocation. I don't want to get music for free. I want to support the artist. But I much prefer to buy albums directly from the artists. And I hate stupid restrictions. "Liberian Acapella" is one of my favorites. They sing at churches and sell their self produced albums. I have many albums from Magnatune (a "record label" that does distribution only). Another favorite is David Bellugi from Italy.
That said, I am a copyright Nazi. I confiscate and destroy illegally copied RIAA music whenever I find it, give my teenage daughters a lecture on "playing by their rules if your going to listen to their music", and threaten to take the $3000 out of their bank account if they get caught distributing copies (I realize the lawsuits are for online distribution, but the principal is the same). Of course, the fact that I can't stand most of the music has *nothing* to do with this...
What I really need is some official RIAA materials on copyright violation, so that we can be clear that the copyright Nazi thing is part and parcel of RIAA music, and not something I am making up.
So, teen pop shiiat loses sales, but real musicians find their audience with P2P. No wonder the RIAA hates it. You can't snooker people who get to try before they buy. P2P makes it much harder to rip off children, which has been the recording industry's MO almost since Edison invented the phonograph. Don't buy CDs!
How ya like dat?
How the heck can it be socialist? If anything it's anti-socialist and, since everything is tied back to economic profits, it's moreso communist.
;-)
It's anti-communist but not anti-socialist. Socialism allows profits, it merely taxes the profits into insignificance to redistribute wealth from producers to non-producers. It merely looks like communism since the the would be producers say why bother and don't even try.
Note to flamers: anything taken to an extreme is bad, pure capitalism or pure socialism, the argument is merely about what the mix should be.
Well, socialism has been taken to mean many things (I feel like pulling up "civics" from Civ4). In particular, there is a social model, an economic model and a government model. The social model means that the state will provide universal healthcare and other social benefits to people that are unemployed, invalid and so on. I suppose you may call this "mommy and daddy providing for needs", economically on the basis that is it ultimately more productive for society to have people healthy and returned to the workforce even though they can not afford the treatment, and morally on the basis that everyone should be entitled to some minimum standard of living regardless of their ability to provide for themselves. You'll find that most of Europe believe quite strongly in this model.
The economic model with state-controlled and protected industry has for the most part been abandoned as a general principle, but not entirely. Many countries have some form of public transportation, public utilities and so on that are state-owned, because it is considered easier to socially optimalize it as owners than to regulate them as monopolies. For example, it is usually better for society as a whole to have more public transportation than is economically optimal for the transport company (less pollution, less congestion, less public roads to build and maintain and so on). They have for the most part been exposed to competition, but service goals and such maintain the social goals. Even China has pretty much abandoned socialism as an economic model in favor of a market economy.
Socialism is also a government model, where "the people" are in charge and thus there is no need for any other party. The basic lines of Marx that each worker should be represented in government, is more like a form of direct democracy than the one-party model that became the mark of communism. You also need to separate between the actual and formal government model. As an example, many parts of Europe have kings, queens but are still democracies. Just like the "People's republic of China" isn't much like a democratic republic.
As far as the rethoric against the RIAA goes, it sounds pretty socialist to me. It's all about how the captialists (RIAA) are exploiting the workers (artists), and how they should revolt and form some sort of people's republic (no large capitalists) where the workers (artists) all get their share of the profits. Let us assume that everyone trades by p2p, and music industry as we know it today crumbles. What do you see? In the old days, artists and composers were sponsored by kings and rich men. I think an new generation of "superstars" would appear, corporate shills sponsored by large corporations with massive promotion budgets. It would not matter if they are spread around because they are nothing but concealed corporate propaganda. That is the fallacy of most revolutions, the average man has rarely come to power. More often than not, he has simply paved the way for another master to take the same place.
Live today, because you never know what tomorrow brings
Circumcision is child abuse.
If you are doing well enough for trading to hurt... You're doing well enough.
Why should 90 percent of the revenue go to ten percent of the artists.
Here's to the musical middle class
It always seemed that copyright lengths should be getting shorter, not longer. After all the pace of commerce has increased.
This is so true it's sad. I'm nineteen years old and even I can't stand to listen to anything that's on the radio except the classic rock. Not that I ever listen to the radio (except when I'm in my gf's car, and even then I usually put in one of her CD's after flipping through the spectrum a couple times).