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The Numbers Behind the Copyright Math

Posted by Soulskill on from the each-song-is-worth-all-the-songs dept.

TheUnknownCoder writes "The MPAA claims $58 billion in actual U.S. economic losses and 373,000 lost jobs due to piracy. Where are these numbers coming from? Rob Reid puts these numbers into perspective in this TED Talk, leaving us even more puzzled about the math behind copyright laws. 'Ignoring improbabilities like pirated steaks and daffodils, I looked at actual employment and headcount in actual content industries, and found nothing approaching the claimed losses. There are definitely concrete and quantifiable piracy-related losses in the American music industry. The Recording Industry Association’s website has a robust and credible database that details industry sales going back to 1973, which any researcher can access for a few bucks (and annoying as I’ve found the RIAA to be on certain occasions, I applaud them for making this data available). I used it to compare the industry’s revenues in 1999 (when Napster debuted) to 2010 (the most recent available data). Sales plunged from $14.6 billion down to $6.8 billion — a drop that I rounded to $8 billion in my talk. This number is broadly supported by other sources, and I find it to be entirely credible. But this pattern just isn’t echoed in other major content industries.'"

7 of 311 comments (clear)

  1. Losses, but due to piracy? by mpoulton · · Score: 5, Insightful

    I haven't pirated music in about 5 years. I also haven't bought any CD's in that time, either. I have moved almost entirely to using Spotify, Pandora, and other subscription services for my music. Music I do buy, I buy electronically. I estimate I spent about 25% as much on recorded musical entertainment now than I did in the late 90's, during the heyday of the CD. This probably results in less revenue for the content owners, but that is not attributable to piracy. An industry's decline due to changing market factors is not necessarily a problem - it's just the natural way of things.

    --
    I am a geek attorney, but not your geek attorney unless you've already retained me. This is not legal advice.
    1. Re:Losses, but due to piracy? by TheLordPhantom · · Score: 5, Interesting

      I have noticed the exact same thing with myself. I don't pirate, and haven't in years. Yet, I almost never buy music anymore. I do own a decent collection of music, but really, I find Pandora, Spotify, etc. to be a far more interesting sources of music, even at times more practical (as in I don't need to copy files from one piece of hardware to another). I honestly don't think that MPAA really can blame even the majority of the decline in sales on piracy. In my own anecdotal experiences, that is simply not the case. People's methods of listening to music are changing. Ultimately, the media companies will have to change the way the approach the gathering of revenue.

    2. Re:Losses, but due to piracy? by Anonymous Coward · · Score: 5, Interesting

      I'd venture a guess that piracy is hurting them (slow down there, read the rest before you foam at the mouth and post a vitriolic reply), and that what they're doing to combat it is making it much, much worse, turning what would be an inconvenience into a death spiral.

      I don't recall the major labels being quite so vilified in my youth. Possibly there's an element there of the internet giving voice to malcontents who waste no time in airing the recording industry's dirty laundry, but I suspect the big issue people have with them in their anti-pirate tactics. Suing grandmothers is never good PR. Nobody likes DRM. Laws that shore up antipiracy measures are widely loathed by anyone who knows much about them - see SOPA/PIPA or the DMCA.

      What does this have to do with piracy? People like free shit, and dislike feeling guilt. People can pirate music for free (we'll stick to just music, since TFA is about the RIAA), but feel guilty about the artist. They assuage their guilt by familiarizing themselves with the evils of the recording industry and "stick it to the man". And by reminding everyone who'll listen that the artist hardly sees a dime from album sales anyway, unless they're already a big name. Guilt gone, music free.

      My evidence for this statement is that when the artist is separated from the industry, when the pirate CANNOT pretend to be Robin Hood, then the musician actually can make a living selling their music online, DRM free. See Jonathan Coulton (who'd never make it in the industry) and Nine Inch Nails "Ghosts" album (which were actually made available for free, with a "please pay us if you like our music" option that made Reznor more money than he gets from his regular album sales).

      Watch now, as the entire thread below this comment devolves into exactly the same guilt deflecting "but they're evil" roundabout justification from absolutely every retard who didn't make it as far as this last paragraph. Or maybe slashdot will pleasantly surprise me (hahahhahaha).

    3. Re:Losses, but due to piracy? by Skapare · · Score: 5, Interesting

      Actually, I have never pirated. But I have downloaded. What I did was use the downloads to preview the music. Then I discarded them. The only downloads I still have are ones from a few artists sites that were intentionally giving them away. I used the preview downloads to make decisions on which CDs to buy, and actually did buy CDs based on the previews. The rate was about 8%. That is, if I had bought a CD corresponding to every downloaded tune, that would be 100%. But most of it I didn't like, such as Electronica that had vocals injected somewhere (I much prefer instrumental music, but I do have some vocal music I like, too). The downloads helped me to actually buy CDs. Had the downloads NOT been available, these are CDs I would likely never have.

      That said, CDs are today very impractical. It's physically too large. No one carries a player anywhere near that size. The RIAA needs to get that clue bashed into their stupid heads and figure out better marketing. Still, I have bought a couple CDs in the past few years ... and "ripped" them so they could be a part of my collection. If I can't "rip" them I can't play them. If I can't play them, what's the point in buying them.

      Today, most of my music collection comes from Magnatune, a site I do believe the RIAA has tried to shut down by means of illegal tricks, because it's a business model (not be evil) that they don't like. One of the great things with downloads from Magnatune is that I can modify and remix them. A lot of the music has a faster beat than I want, and I can actually slow it down in mplayer (I have my own wrapper program to do it). I can't do that with music played by some proprietary player program. And I doubt it hurts the feelings of the artists if I play their music in a different way or even remix it for my own playing as they get their bits either way and they can't hear how I might have corrupted their art.

      Sales of CDs has gone down for reasons very similar to the reasons that vinyl has gone done ... there's something better out there. Unfortunately for most big corporations, they didn't figure it out soon enough ... to actually give people what they want. The vinyl format was industry produced. The CD format was industry produced. Music files that can be downloaded was not, and they just can't stand that they didn't invent it.

      --
      now we need to go OSS in diesel cars
    4. Re:Losses, but due to piracy? by Bert64 · · Score: 5, Insightful

      I used the preview downloads to make decisions on which CDs to buy, and actually did buy CDs based on the previews.

      And this is exactly what the RIAA don't want, they would much prefer you to buy CDs, and then find out that you don't like them... If people can try before they buy, then they have to actually make an effort to produce decent music that people will like.

      --
      http://spamdecoy.net - free throwaway anonymous email - avoid spam!
  2. Boycott by thestuckmud · · Score: 5, Insightful

    To Whom it may concern,
    Please count the lack of revenue you are receiving from me in the boycott category. I do not pirate music, but I'm sending another dime to companies that gang up to alienate me.
    My grudge goes back a ways - highlights include: Lying to me about CD price hikes in the '80s; taxing my computer media in the '90s, intentionally distributing malware laden CDs in 2000, and now the outrageous legislative attempts.
    Sincerely,
    One bitter ex customer.

  3. Re:It's not piracy by thegarbz · · Score: 5, Insightful

    Except singles weren't released for $0.99. No you couldn't just buy the song. You had to buy the Single, which had 5 different versions of the same song for about half the price of the entire album if the single was still in the charts, and still about $5 if it was not.

    There's nothing good to be said about the overpriced distribution methods the industry is trying to hold on to. The fundamental problem is that these like many things were priced as high as the market would bare, however the market changed, as did consumer expectations and the price did not.