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Latest Music Piracy Study Overstates Effect of P2P
Blackbeard writes "A new study from pro-business think tank Institute for Policy Innovation claims that music piracy accounts for $12.5 billion in lost output to the US economy. That includes 71,060 lost jobs and $422 million in lost tax revenues... if the figures are accurate. Ars Technica's write-up points out a number of flaws in the IPI's reasoning. 'The study makes for some alarming reading, but it suffers from a few significant flaws. First and foremost, it appears to fall into the "illicit downloads = lost sales" fallacy, the view that each song obtained over a P2P network is a lost purchase.' There's more: 'The IPI study also assesses the increased demand for music if piracy didn't exist and assumes the market would remain as "intensely competitive" as it is today. The problem is that music fans are largely disenchanted with the market. By and large, music fans think that music is too expensive, and that much of what is available isn't very good.'"
Assume the average buyer like me spends $15.00 per CD avg. After marketing and retail costs, let's say that an average profit to the music company per unit is a max of 40% or about $6.00, divided by 10-15 tracks per CD or 40 to 60 cents each.
Now assume that I bought those same number of tracks from iTunes. Cost for distribution is nearly zero. Cost for marketing: nearly zero -- and many of the songs I am looking for aren't current albums, so the profit margin on these songs is even higher. Net profit between Apple and the music company and the musician? let's say 90%, shall we?
You figure it out. But the politicians probably never will.
...Open Source isn't the only answer -- but it's almost always a better value than the alternatives...
The only reason they are mouthing about "P2P" is that they've heard about it on the evening news, the American news media isn't about reporting anything of consequence, it's about "buzzwords" like "the internet", "terror" and now "P2P" and "mortgage meltdown" and soon (when the talking heads notice it) "web20". The simple fact that I have to watch foreign news broadcasts to find out whats really going on in the world is pretty damn sad, a good deal of time on "The CBS Evening News with Katie Couric" is dedicated to fluff about some kid in the Midwest who can stand on his head and spit wooden nickels . ;-)..
I killed da wabbit -Elmer Fudd
That "just work" mentality is directly related to the DRM that you say they don't care about.
If the DRM was dropped and people found that buying from seller "A" let them use their purchase however they wanted and it "just worked" but purchasing it from seller "B" didn't. Then they would have a very high encentive to buy from seller "A" and the word of mouth between general users would be: "Buy from these guys, it just works!"
That's "So long as the CD "works,"" not "Most people don't care about DRM"
) Human Kind Vs Human Creation
) It'd be interesting to see how many humans would survive to serve us.
If you compare the lost music sale to the increase in the amount people spend on concerts, then factor in how much kids today (probably their most valuable customers) spend on their cellphone, it all adds up nicely, all without having to resort to imaginary lost sales.
Tickets sales go more directly to the artist. The RIAA doesn't represent the artist as much as the distributer. The RIAA couldn't care less and by extention the labels couldn't care a single wad if the artist never made a dime so long as they get paid. I suppose that is an obvious fact.
"There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy."
The music industry created simplified music and sold it for a high price. The market is now equalizing. A Beethoven symphony costs the same as a Jay-Z record, but people will not listen to Jay-Z for centuries and find him inspiring. They will listen until the trend is over.
The music that the music industry has pushed upon us is simpler, dumber, and more repetitive than what we would be buying otherwise. Now that people do not have to pay for it, they do not, because they're only going to listen to it for a few weeks until something new comes out. This market force is causing them losses, true, but these are losses from a model of inflated value that they created.
If calabasa squash cost $0.79 and I start selling a calabasa squash with Elvis Presley's face carved into it for $79.00, I have created a model of inflated value. If someone else comes along with a metal stamp that carves Elvis's face into a calabasa squash, they have deflated my inflated value model. It is hard to argue that I lost anything, since the value definition of my product was inflated in the first place.
I distrust any society that measures what is good in economic terms. If we look at the file-sharing debacle through the eyes of an artist, we see a situation where a few overpaid rockers are going to lose out so that many lesser-known artists of quality can have a chance to gain that share of the audience. Although it may ruin the imaginary model of existence in which anything that earns money is important, this change in the music industry will better the lot of real music in a world of plastic fakes.
technical writing / development
Saying "piracy" cuts into sales ignores the fact that a whole lot of file sharing involves music the record companies won't sell anyone for any price. What about all the hundreds of b-sides, remixes, demos, etc that are not in print? That was what I mainly used Napster for, grabbing digitized copies of music I used to have on LP and cassette that was never put on CD, or was once on CD singles but was out of print by the time I wanted to purchase it. The most disappointing thing about iTunes to me is it's just the same old stuff already on CDs. Why don't the record companies open their archives and put out of print music online? It would cost them almost nothing to have digital copies available to download.