Why Piracy Is Not Actually A Problem For The Music Industry

from the look-around dept

TorrentFreak is running a great guest post from someone responding to the IFPI's laughable claim that unauthorized file sharing is the root cause of the recording industry's problems these days. That's simply not true. The post does a good job laying out the details on eight other reasons why the recording industry is in trouble that have nothing to do with unauthorized file sharing. Basically, there's competition from other forms of media (video games, the internet) and there are more efficient markets and technologies that have siphoned off some of the excess profits the industry used to enjoy. It's a great list, but what it leaves out is the next step: what does that actually mean for the industry. And, the answer is that if they are willing to change their business model to adapt to this changing market, they can do amazingly well. That's because many of the inefficiencies that have been taken out of the market were costly to the record labels. By embracing what the new market allows, they can decrease their own costs, while creating an even larger market for themselves. The fact that they have chosen not to do so has nothing to do with "piracy." It has to do with their own unwillingness to change.


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  1.  
    identicon
    Buzz, Feb 27th, 2009 @ 4:50pm

    Hehehe

    But I like cleaving unto my piracy excuse! It means I don't have to explain why my music is so lousy in the first place! People should have to BUY my music before they realize how bad it is!

     

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  2.  
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    Anonymous Coward, Feb 27th, 2009 @ 6:57pm

    Competition from other forms of entertainment like video games, the internet?

    Then why does everyone and their brother own an Ipod? I doubt people are listening to less music, they just are not paying for it as much anymore.

     

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  3.  
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    annoyed, Feb 27th, 2009 @ 8:03pm

    maybe i should read it first

    It's not that people are listening to less music when they expect to fill their ipods -which costs $5k or more to do with itunes. When I was in college, it was rare to own more than a handful of lp's or tapes. Those were usually trades at a local used music store.

    College kids have NEVER paid for music in ways that labels considered "legitimate". Digital sales and sales directly through independents are not counted by labels as "legitimate".

    So why are kids targeted with lawsuits? That's so chicken and describes the industry perfectly. That's why no one in their right mind will buy a commercial CD - or risk their equipment with one.

    I've never had so much music or so much choice in music before. It's mind-boggling. The industry is healthier than it has ever been since recording was invented. That's not an exaggeration. But nothing I listen to is on radio and I think I'd puke if I recognized a "major hit chart" listing. Twenty years ago I lived off "hit charts". Did I change? Maybe - however the last thing I want is my musical taste equated with a 13 year old. Most musicians are NOT part of major labels - look at the Grammy's and top sellers at Amazon.

    Wait. My nephew is 13 and he doesn't even like label stuff. What labels did to radio, they want to do to the internet; "Our stuff or nothing" (talk shows). EEK. Not even the dentist or auto garage can play a radio in the background anymore. Do they really think that produces sales?

    "Give the customer what they want" - then why can't I still get the music I want, in the format and bitrate I want? That means I OWN it when I buy it per first sale. I want to put it on my computer, change formats, use it in a player, share it on a CD or do whatever I want with it.

    They don't "care" about music or the band when the actual band (the real creators) get a whopping $1 per album ($10) from ITunes (maybe). They get nothing from all the labels lawsuits and no one is tracking how much they've gotten from extortion, er "settlements". I bet Al Capone would've been proud.

    The labels have also proven just how gullible (or vulnerable to payoffs) Congress has been for backing industry created reports and studies (Geist) that anyone with a little critical reasoning could realize was bogus. Ah ha. Both parties have major label representatives working in their parties and Congress has kept the issue out of public debate by regulating copyrights and trademarks to trade agreements rather than public policy decisions.

    There is no voice from the public or for the public. It's hard to have respect for 1984-like corporations. Copyrights and trademarks have gotten out of balance.

    When the DRM was circumvented on DVD players, the reaction was millions of web pages mirroring the code, in addition to tshirts, mugs, and the like within 48hrs. So how many more does it take to become an act of civil disobedience - or does the public even have that right anymore?

    All I know is it took a lot less to get lawmakers to listen during Vietnam. I think this has contributed greatly to the growing anti-corporation feeling going on now. I don't see a change coming - so it'll keep building.

    I think everyone who downloads should mail the band a buck. If people are willing to pay $300 for a mp3 player, they are willing to pay for music - if it's made available. The only other choice is to support the independent musician which has already happened.

     

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  4.  
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    Blatant Coward, Feb 27th, 2009 @ 8:12pm

    I got a 32 gig iPod with 3 gigs in it, all from CD's I physically own and maybe 100$ worth of stuff from itunes in singles.

    If the time I spend playing video games is what they are blaming on me not liking 99% of the crap they are hyping, then they will need to outlaw TV, books, dog waliking, and masturbation.

    Oh wait, MTV banned She Bop cause petting the one ear elephant sells no fancy stinkum like that axe junk.

    Well c'mon over and bring the handcuffs.

     

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  5.  
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    uhmno, Feb 27th, 2009 @ 8:13pm

    Re:

    Because they buy games and pay for their Internet connection instead of paying for *insert name of musician*'s latest CD?...

    In other words they spend their buck where they get the most bang for it.

     

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  6.  
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    Anonymous Coward, Feb 28th, 2009 @ 4:05am

    The record industry's problem is ....

    THE RECORD INDUSTRY!

     

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  7.  
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    PaulT (profile), Feb 28th, 2009 @ 4:48am

    What do Lacuna Coil, Monster Magnet, Zombi, Common Market, Cheryl B. Engelhardt, High Contrast and Hybrid have in common? They're all independent artists whose entire back catalogues I have purchased after discovering them through "piracy".

    What do REM, Metallica, Chemical Brothers, Moby and U2 have in common? They're all major label artists whose music I *used* to purchase, up until the RIAA used such horrible tactics to "fight" piracy that I decided to boycott them. I don't "pirate" their music, I just ignore them in favour of independent artists.

     

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  8.  
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    Claes, Feb 28th, 2009 @ 7:45am

    Don't miss people's reaction to the expert witness Roger Wallis' appearance in the Pirate Bay trial, also on TorrentFreak: Pirate Bay Witness’ Wife Overwhelmed With Flowers

    In my view (I listened to the trial on radio) he completely undermined the legitimacy of the plaintiffs' damage claims. It will be very interesting to see how the court handles this. It's easy to understand how frustrated the music and film industry representatives must be to have a person who is a professor with a long experience in the field, well-known composer, member of the government's IT counsil, previous part of the board of one of Sweden's major collecting societies says things like this.

     

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  9.  
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    Dave, Feb 28th, 2009 @ 1:57pm

    It is laughable

    You're right, it's silly to say that file sharing is the root cause of their problems. It's a very standard way to deny any responsibility for their own stupidity, inflexibility, etc. I would go so far as to say that here in the US, it's now an old tradition to blame someone else for any of one's own shortcomings or misdeeds. No one will take responsibility for anything. But I digress.

    I think file sharing is responsible for one part of the industry downfall in a sense. But only in the sense of being a facilitator. Previously, there was no way around the monopoly power and utter corruption of the record labels. You either bought the crap, or got nothing, unless you made a cassette copy or something like that. When you have a monopoly, competence, intelligence, and creativity are no longer needed - you just need a legal department and plenty of your monopoly money.

    Now people know about alternatives, so they don't have to support these imbeciles that run the record companies. So the power has shifted, and the record companies are All Upset, waa, waa. No more huge expense accounts and unending supplies of coke to snort.

     

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  10.  
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    TJ, Feb 28th, 2009 @ 8:32pm

    I boycott them

    Used to the main reason I boycotted them was that they were suing individuals on the flimsiest of 'evidence' for file sharing. Even though they've said they'll stop that, its still a valid reason because they have refused to drop suits already ongoing and have been caught filing new suits. Hopefully though that reason will be going away.

    Unfortunately, the RIAA and their international cousins are now trying to get ISPs to implement 'three strikes' policies, trying to kill Internet radio, and generally being asshats as usual. So I haven't bought any music from RIAA member labels in so many years I can't recall, and it looks like that boycott will continue. I have a collection of hundreds of CDs legally bought new before all that; a collection that abruptly stopped growing because of the RIAA. It is so amazing that the largest part of a whole industry thinks that alienating their best customers can somehow be good for business.

     

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  11.  
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    Gene Cavanaugh, Feb 28th, 2009 @ 10:42pm

    Entertainment Industry AGAIN???

    Totally agree, but there is too much focus on that industry. Your insights are very good, and the investigation you do is obviously very thorough, but too much of it is on this industry - there are other areas where the insights would be more useful.

     

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  12.  
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    Weird Harold, Mar 1st, 2009 @ 7:27am

    Re: I boycott them

    Trying to kill internet radio? I don't think so. They are only asking internet radio to pay the same performance fees that other media have always paid to use copyright works to generate income or garner an audience. Perhaps you don't realize, but every time a song is played on the radio, every time it is performed in public, every time it is played at your local bar / night club a performance fee is paid to do so. Why would the internet be any different?

    The internet didn't suddenly give everyone the right to ignore the real world.

     

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  13.  
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    MadJo, Mar 1st, 2009 @ 11:05am

    Re: Re: I boycott them

    The same? Try more.

    They were asking the internet radio stations to pay more for the 'right to play music' than what they were asking terrestrial radio. Terrestrial radio has a blanket license, internet radio has to pay per listener.

    You seem to think that internet radio was getting 'a free ride', which couldn't be further from the truth.
    Most of the internet radio stations (soma.fm, DI, etc) have always paid their dues to SoundExchange, or equivalents (even if they only ever played indy/non-RIAA music), which was a certain percentage of the revenue of the radio station.

    But the RIAA/SoundExchange wanted MORE money, and asked that through the copyright board, which ok'ed it, and now some internet radio have to pay a number of times more money than they ever make in a year. Instead of the percentage of revenue, they had to pay a certain amount per listener. And in some cases that meant that the more listeners you have, the less likely it is you are going to succeed, because of the tremendously high levy they have to pay for the 'right to play music'.

    SoundExchange on their side, is known for not paying artists because 'they couldn't find them'. Which was BS, because the list of untraceable artists contained people who were still performing and were easily traced.

     

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  14.  
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    Weird Harold, Mar 1st, 2009 @ 11:54am

    Re: Re: Re: I boycott them

    Perhaps you would want to understand the broadcast royalty system a little better: http://entertainment.howstuffworks.com/music-royalties7.htm

    The webcaster problem is actually a very simple one: The businesses for the most part don't make enough money (income) to support their businesses WITHOUT any fees, so few of them wanted any fees at all. They hemmed and hawed and tried very hard to avoid any fee system. It isn't the music industry's fault that internet radio isn't economically viable, why should they be forced to swallow lower fees to make someone else money?

    I have friends who still get royalty checks for music they made 10 years ago that gets occassional use / play. Without a royalty system in place, there is no way to support the artists that write the songs we all enjoy.

     

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  15.  
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    Mike (profile), Mar 1st, 2009 @ 10:58pm

    Re: Re: Re: Re: I boycott them

    I have friends who still get royalty checks for music they made 10 years ago that gets occassional use / play. Without a royalty system in place, there is no way to support the artists that write the songs we all enjoy.

    It stuns me that you repeat this crap. You can't actually believe it? We've been highlighting artists making tons of money from means other than royalties for years.

    Are you telling me they don't exist?

     

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  16.  
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    Steve, Mar 2nd, 2009 @ 10:57am

    Re: Hehehe

    Hence people not wanting to buy whole albums. 18 years ago they killed the CD single because they were outselling some albums 3 to 1. Arrogance got them to where they are, let them suffer.

     

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  17.  
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    nzgeek, Mar 2nd, 2009 @ 8:27pm

    Re: Re: Re: Re: I boycott them

    It isn't the music industry's fault that internet radio isn't economically viable, why should they be forced to swallow lower fees to make someone else money?

    Your thinking on this matter seems completely backward to me. Isn't some revenue better than no revenue?

    Assume that we have an internet radio station that's making $5000 profit per month. If they pay 40% of that in fees, that's $2000 per month that goes to SoundExchange. If the fees are set at a price that the station can't afford, that's $2000 that isn't going to artists.

    Let's not forget the promotional aspect of these radio stations. How will new artists get heard if their songs aren't being played? Sure, higher fees make for more profit in the short term, but it's not something that will help the music industry in the long term.

     

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