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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.'"
that there is so much of this pandering to the big record labels. Where are the studies showing the truth about piracy, sales, and quality of recorded music?
I'm also ashamed that it has been about 10 years since Napster broke and this is still going on. I feel partly responsible. Time to crank up the anarchy.
"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."
On the other hand, music piracy accounted for $12.5 billion in gained income to the listeners.
I think the point about the general lack of quality in the music marketplace is right on. Most albums have one or two good songs, so you end up paying $7+ per song that you actually want. My urge to pirate music was drastically lessened when online stores (iTunes was the first one I came across but I don't know if they actually pioneered this or not) started allowing me to buy the specific songs I wanted by themselves. I'm happy to pay 99 cents for a good song. If all the songs on the albums were good then I would buy all the songs and they would make that much more money from me.
If unrealized gains were losses, then any product that didn't sell as well as it might would have "lost sales"
Hint: you have to have something before you can lose it.
If I have nothing to hide, don't search me
By and large, music fans think that music is too expensive, and that much of what is available isn't very good.
As a musician who purchases quite a few albums each month, I don't agree that music is too expensive, but I do agree that most of what is *marketed* isn't very good. There are many great albums that are *available*, and $12-$18 for a really great album is a fair price, in my opinion. The problem is that record companies are often not willing to develop and market the artists who actually have any talent...and while I don't think music is too expensive, I do think that far more of the money should be going directly to the artists, and far less of it should go to record company execs.
ZuluPad, the wiki notepad on crack
I pirate music all of the time. Mainly older stuff. I don't think that new music is too expensive however. In the past few years I have purchased three or four brand new albums. All it took was $10 and a trip down to K-Mart (since they don't censor CDs). Of course, these were bands that I really like and have enjoyed for years. These were full albums where each song revolved around a central idea and added to the understanding of said idea. These weren't Top 10 artists that throw out a disc with one manufactured single and fifteen more tracks of even more redundant filler. Maybe I'd feel more ripped off if they had been. Then again, I wouldn't be willing to pay too much more than $10 for a CD regardless. You want to talk about a medium that's completely overpriced? DVDs!
"He who can destroy a thing, controls a thing." --Paul Atreides, Dune
By and large, music fans think that music is too expensive, and that much of what is available isn't very good.
Yet it's good enough to download, apparently. The "music isn't good enough to justify paying for it" argument vanishes in a cloud of hypocrisy when people download the very music they disparage.
When you're a freeloader, any cost is hard to justify, compared to free (beer).
"Ask not what your country can do for you." --John F. Kennedy
In the beginning there was... Word of Mouth. A Bard with a Song and performance and got paid from a local Tavern or Hall. Then there was Radio.. Radio provided access to huge amounts of people at once. They could get a taste for the product and then go purchase it because they could not keep the taste. Then there were tapes... Taped Radio was a cheap way of getting music but the music was of a lower standard and so the RIAA never came down.. the advertising was very helpful to them in their view. Music Entertainers got paid still by performance and some small royalties.
Now we have Music that could not be played on Radios or controlled being sent out and listened too by millions of extra ears. Music that has caused the surge of bands from Europe and other places that are not know in the USA. Music that would not be played because RADIO stations cater to people who would PAY for things... thus the music may not have been purchased anyways.
What happens? Music may not be purchased as much, but we have broader bands still roaming the lands getting paid to perform at a Tavern or a Concert Hall. The huge entertainers will still get the money and now we have more Middle Class Entertainers who can make a decent living performing.
Bottom Line: Make good music and people will buy it and they WILL go to see your concerts. Make mediocre Music and people will not do either. More music out there means get Lean and Mean or get destroyed.
We end up with better music across all Genres and we pay less to test the waters.
I can program myself out of a Hello World Contest!!
Wouldn't this study require the demand for music to be "perfectly inelastic"?
;)) and the demand wouldn't change because they've already published papers claiming that people downloading free music instead of paying were not doing it because of any price considerations.
i.e. if demand for a full-price version of some music is the same (in their model) as demand for a zero-price version of the music, then they're modelling the demand as being the same no matter what the price.
If that were so (and the wiki pages on economics suggest it's not possible) then it would suggest that you could sell music CDs for $10K each (recognise this theory from anyone's legal filings?
By the same token, I wonder how many of the downloaded tracks are from out-of-print CDs? I'm strongly opposed to piracy, but I don't see the problem in sharing music that can't be obtained any other legal way. As soon as they re-release "Chagall Guevara" or the first the "Believer" albums, I'll pull them off of BitTorrent. Until then, share away!
Where are we going, and why are we in this handbasket?
The summary (and the artiicle, for all I know) is not quite right when it says:
He's just fallen foul of Fingals First Law [*] of chart music - the widely observed principle that the charts always turn to complete rubbish within 5 years of quitting full time education. The cool kids will always be listening to something completely different from what we listened to, and we'll just think the new stuff isn't like music used to be, in the good old days. In turn the cool kids will grow up, and find that the music they like has been superseded.
The point is, it's older fans who think that much of what's available now is rubbish. There is a constant supply of new fans ready to be programmed with the new stuff.
Of course, not all of them will buy the new stuff, but that's another issue - and the posters above have covered that pretty well!
[*] I just made that law up right there! Don't expect to find it in the textbooks till next week at least. We're only at Internet 2.0, you know.
Paul "Say no to feeping creaturism"
This think tank is definitely in the business of bias. Here's one that concluded tax cuts would not primarily benefit the rich, but Congress didn't buy it. Here's one cited in Forbes saying that insurance deficiencies are due to government regulation--which Michael Moore's "Sicko" exposes as a horrible untruth. It's easy to find studies like this from IPI. They use Free Market rhetoric to influence lawmakers, but it's that variety of the Free Market that is anticompetitive.
The music industry, as everyone here likes to say, relies on an outdated business model, but one part of their business model that is quite current and up to date is how it seeks protection through government influence. Sometimes Congress likes to hear distorted studies, because it helps them to have excuses. That's the real issue here.
>>There must be some effect here. I know plenty of people who don't buy any music at all, but
.02
>>certainly would if they couldn't download it for nothing. Obviously the 1 to 1 correspondence
>>between downloading and lost sales isn't useful, but does anybody know of any reasonable estimates
>>of what the loss actually is? Or even how you'd calculate it?
I'm not sure that is possible. I have purchased hundreds and hundreds of music CD's over the years. I have quit. After hearing what the RIAA was doing, I could no longer support such a company. How can you quantify that affect? I do admit that I've purchased some un-signed (indy?) artists CD's. I have a co-worker that in un-signed and I have his. I have one from a group in NYC and another from a signed but non RIAA member. In the last 3 years..
But I've quit buying music like I previously did. And no, I don't download it from P2P networks either. What I've done is switched to XM Radio. I have two subscriptions. I now understand the RIAA gets a cut of my subscription. I don't like that as I mostly listen to Fox News, XM Comedy, and other stations like that.
Taking the Barry Bonds defense, how many of these users who downloaded songs via a P2P application "knowingly" were downloading songs illegally? Apparently the Feds can't even beat that one. Now, you IPI accountants, figure that into your numbers and no sales were lost. The IPI, MPAA and all Virgin Records, Tower Records and Record Town stores are probably more interested in catching my friend from 15 years ago who could walk in and out of a music store in 10 minutes with 50 CDs in his jacket.
I don't support the RIAA or DRM but I have never really bought into the whole "allowing piracy increases net sales" ideology. Firstly, I doubt it will increase the number albums sold. Why would you buy the album.. if you already have all the songs? It doesn't make any sense. Secondly, if we are to believe that downloading music for free increases a band's exposure, then there should be a corresponging increase in concert attendance and merchandise sales. I'll leave it up to someone to find the actual numbers, but I'm fairly certain concert attendance has been falling.
In the end I see downloading music illegally as something that neither hurts nor helps the music buisness. Sure it may hurt some sales, it might create some sales, but a HUGE, OVERWHELMING, majority of people would never pay for most the songs they download, at least in the current system. I know I wouldn't. Consumers will always choose what costs them the least (actual cost + convience - (risk of getting caught)), rarely do people buy based on ideology. The music industry understood this and could either change its buisness model or start making it hard for people to download (flooding networks with fake songs) and issuing lawsuits. The latter was easier for them, hence it is where we are at today. Is it working? No.
Maybe not directly, but definitely indirectly. For example, I'm a huge Pink Floyd fan. I started getting into them around 1990, which was the end of an extremely frustrating musical era with all the crap that was churned out in the 1980's. I had gotten so disgusted with music that I honestly never listened to the radio. A buddy of mine had The Wall, though, and I was hooked. He gave me a copy of his tape, and over the years since, I've bought almost every Pink Floyd album there is, except some of the crappy early ones with Syd Barrett. I've also seen them twice in concert.
Another example. When I was in college, like most college students, I was dirt poor. I've always liked Billy Joel, and another buddy of mine invested his disposable income in a CD player (still pretty new at the time) and almost all of Billy Joel's CDs. Of course, I couldn't afford all that, so I bought a bunch of blank cassettes and he made copies for me. Fast forward a few years, and I now am the proud owner of all of Billy Joel's albums, and I've seen him twice in concert, too. (If you're ever lucky enough to get the chance to see either Pink Floyd or Billy Joel in concert, incidentally, go.)
Another example. Just today, a friend of mine was listening to a Lazlo Bane CD I bought. (They're the guys who did the theme to the television show Scrubs, and their stuff is very good.) He had never even heard of the group before. At best, most people I run across are familiar with the theme to Scrubs ("I'm no Superman..."), but they'd never buy a whole Lazlo Bane CD because of that little snippet of song you hear on Thursday nights. I'll be honest, I seriously doubt he's going to rush out and buy a Lazlo Bane CD or go to a concert. But at least now he knows who they are, and if someone mentions Scrubs, he'll probably say something like, "Oh yeah, the theme was done by Lazlo Bane. I've listened to their CD and thought it was pretty good," and thus the "buzz" of the Bane has been bumped up by a bit.
I could keep going, but you get the idea. The collective effect of all of this is that CDs do sell better. Artists and bands do become more famous. Concerts do get attended that otherwise wouldn't have.
Plus, that's also neglecting the money that artists and bands make through increased exposure that have little to do with CD sales and concerts directly, such as through endorsement deals, magazine articles and interviews, non-CD merchandise, etc.
Wrong again.
It is entirely possible that the effect of p2p downloading is a net increase in sales/profits for the industry or that there is no significant positive or negative effect whatsoever. Your anecdotal experiences and mine cannot legitimately be extended to the record-buying population as a whole.
The actual point here is that--again, as far as I know--the record industry has not presented data that demonstrates a loss of sales due to p2p activity. In the absence of such data, any calculation whatsoever of 'losses' is essentially fiction.
My hatred of the RIAA is now greater than my desire to be legal.
It's not just the DMCA and all the terrible lawyering, lying and lobbying, it's the way they consistently rip off the artists. If the artists are suffering it's because of the record companies and their contracts, not the people who download CDs.
I actually know some real, famous musicians and heard their storr about making one of the top 100 selling albums of all time and not making a penny from it - the record company took it all.
nb. This isn't something new, it was back in the '70s - Yes, they've been doing it since the '70s!
If I ever meet the musicians I listen to I'll happily give them a tenner, buy them a pint, or whatever. But I will not support the RIAA or record industry in any way shape or form.
They bring this upon themselves.
No sig today...
[Begin site plug] (I don't have anything to do with these sites except that I like them, but this sounds pluggish.)
Magnatune's free versions are MP3, if you pay you get your choice of several formats, including a couple lossless ones and mailed CDs. Jamendo gives you the same stuff whether you paid or not. They both let the buyer set their prices (minimum $5 on Magnatune). Neither of them require exclusive contracts from their artists. (I've seen some albums on both.)
IIRC, each site keeps half of what you give them, and the other half goes to the artist. (Compare that to 10 - 20 cents per dollar for the big labels.) Sounds like a good deal for everyone to me.
[End site plug]
I currently don't have a lot of money, so I shamelessly listen to music for free from those sites once in a while, knowing that after college, I'll pay for all the ones I like. Since they let me listen to it, the music will constantly remind me of their existence, so I'm not likely to forget to pay up.
By the way, if you like instrumental classical, check out Rob Costlow (solo piano).
This is not a signature.
Most of the CDs I buy are of albums I already have as mp3s, largely collected during high school and uni when I didn't have money for frivolous things like that. The majority of the rest of the CDs I buy are from artists I have a few tracks from which I've downloaded (usually long ago, again) and wanted to get the album those songs came from.
Same goes for lots of computer games; I buy the ones I like, but often play ones I don't feel are worth their full list price. I have a copy of Oblivion still shrink-wrapped because I'd played it for some time before deciding it was worth the money. I loved Silent Hunter 3 but never bought it because it used StarForce copy protection, and I think they're even more ethically bankrupt than I am; but SH4 doesn't so I bought that happily... and again, that box is unopened because I downloaded it and never needed the actual media. Heck, I actually pre-ordered the last Hitman, but the release in .au was delayed sufficiently that I'd played through the entire game before my copy of that arrived.
Possibly I'm a statistical anomaly, but I think everyone has a limit of what they feel morally comfortable with. So, I have some albums I've downloaded and kind of like, but probably won't buy; if I had to make a choice whether to legally own it or never listen to it again, I'd choose the latter. But since I don't have to make that choice, I'm comfortable enjoying them on occasion despite not paying for them.