Some folks are obsessed with numbers. Others are obsessed with food. Combine these two tastes that taste great together and you get: Reese's peanut butter cups infographics about food. Here are just a few random sets of data on food consumption in the US.

• Just as you probably already knew: Thin Mints are the most popular Girl Scout cookies, raking in about 25% of Girl Scout cookie sales. Samoas (aka Caramel deLites) come in at #2 with 19% of sales. [url]
• What does the average American consume in a year? Hmm: 110 lbs of red meat vs 415 lbs of vegetables? Do those numbers sound right to you? [url]
• In a survey of 500 "dudes" (ages 18-35), 90% of them had visited a McDonald's in the last 3 months. It's gotta be the fries -- a surprisingly high percentage of guys just get a drink or fries. [url]
• To discover more food-related links, check out what's floating around in StumbleUpon. [url]  

By the way, StumbleUpon can also recommend some good Techdirt articles, too.

We've been pointing out that this isn't true for years now, but the entertainment industry is still so focused on "stopping piracy" rather than "what's the best business model," that they still don't seem to realize that many of their efforts to "stop piracy" actually do nothing to help their bottom line, and often do plenty to hurt their performance. We've already shown (with multiple studies) that people who download unauthorized copies often tend to be the best customers, but there's also the flip side of that equation, which is whether or not preventing unauthorized file sharing increases sales. We've suggested for years that even if the industry could slow down unauthorized copying, it's unlikely that it would directly lead to an increase in sales.

David Pogue has an article in Scientific American saying the same thing, highlighting how his own attempt at copy protecting some ebooks didn't lead to more sales, but that freeing up his ebooks actually did increase sales:

I make most of my income writing computer books. To my great distress, I discovered that they are widely available online as PDF files. But when I griped on my blog, my readers challenged the assumption that I was losing sales.

“First of all,” they said, “you’re counting a lot of people who never would have bought the book in the first place. Those don’t represent lost sales. And you’re not counting the people who like the PDF so much, they go buy the print edition or discover from the PDF sample that they like your writing.” One reader challenged me to a test: make one book available both on paper and as an unprotected PDF file. Report the effect of sales after one year.

I did that. The results were clear: Piracy was rampant. The book was everywhere online. But weirdly, my readers were also proved right. Sales of the printed edition did not suffer; in fact, they rose slightly year over year.

Now, there are two things worth pointing out. This particular story isn't entirely new. We wrote a similar story a year and a half ago when Pogue wrote nearly the same story for the NY Times. Also we tend to disagree with a straight "give it away and pray" sort of setup that Pogue went with here. However, that doesn't mean the point doesn't stand.

No matter what you think, morally or legally, about file sharing, if there are ways to embrace what your fans/consumers want in this manner and then make more money at the same time, does it really matter that you dislike the infringement? To put it another way: would you prefer making more with infringement, or less without infringement? Too many people assume that by cutting out infringement that leads to them making more, but there's more and more evidence that says that's simply not true.

Earlier this year, we noted how copyright maximalists were celebrating the fact that according to one (historically untrustworthy) analytics firm, file sharing had taken a massive drop following the shuttering of LimeWire. Of course, I pointed out at the time that those celebrating this were (yet again) focused on the wrong question. So often we hear copyright maximalists talk about how "piracy" must be stopped, but they never seem to want to discuss whether or not that will make people buy again. So, we looked at some of the data provided by some who did believe LimeWire's shutdown had increased sales, but it came up a bit wanting. Still, I'm all about data, and if there really is data supporting the claims that LimeWire's shutdown resulted in increased sales, it might make me reconsider my position on the wisdom of taking legal action against operations like LimeWire.

So, with the recent settlement in hand, it seemed like as good a time as any to look into the data. Of course, it also helped that Capitalist Lion Tamer sent over the latest stats from Nielsen, noting that music sales are up in 2011.

Boom! Case closed. LimeWire's shutdown saved the music industry. Right? Well, actually, no. Doesn't look like that at all. In fact, Nielsen doesn't even mention LimeWire's shutdown in its note about this, attributing much of the increase to the Beatles finally coming to iTunes. And, actually, if you look at the same Nielsen reports going all the way back to 2006, they show music sales going up each year. It's just that more of it is single tracks, rather than full overpriced albums. It looks like the same is true of the latest data as well. If anything, the data suggests a noticeable slowdown in the growth rate. That is, sales are only up 1.6%, this year, which seems significantly down from the growth rate in past years. In 2006, the growth rate was 19%. In 2007 it was 14%. In 2008 it was 10%. In 2009 it was 2.1%.

Perhaps there's some other data to be found, but it's hard to see how there's much of an argument that the shutdown of LimeWire, even if it really did cause file sharing to drop massively, then resulted in an increase in music sales. Kinda makes you wonder about those claims from the RIAA about just how much LimeWire had to do with their problems.... It also explains why the labels were happy to settle for $105 million after claiming trillions in damages from LimeWire. Even the industry seems to know that it's not file sharing that's the real issue.

With the Supreme Court rejecting the appeal of Universal Music concerning how much it owes Eminem for iTunes sales, we expected a bunch of lawsuits to be filed, and that's starting. The estate of Rick James has filed a class action lawsuit on behalf of other artists who also believe that Universal incorrectly paid them for similar digital sales.

If you don't recall, the key question is whether or not digital "sales" are really "sales" or "licenses." That's because old record label contracts (the newer ones, not surprisingly, have been changed) gave artists a very small percentage of royalties on "sales," which was supposed to be about CDs, vinyl and tape, and a much higher percentage on "licenses," since there's not much involved in a license. Eminem and some other musicians have been suing the record labels pointing out that iTunes and ringtones appears to be a lot more like a license than a sale, and thus they should get the (much) higher royalty rates, and the appeals court agreed with Eminem. I'm not sure the status of some of the other lawsuits in this space, but with this new class action, I'm sure we'll be hearing about plenty of these lawsuits soon.

While Universal Music keeps insisting that the Eminiem contract was "unique" and had special language that makes the ruling only applicable to Eminem, clearly these other musicians do not agree. David Kusek has done some (ha ha) back of the iPad calculations to estimate the potential liability for the record labels at close to $2.15 billion. Even if the estimates are a bit off, the record labels should be pretty worried about all of this. Of course, I can't wait until the next time they want to insist that they've really only "licensed" the music you have rather than "sold" it to you, since they were arguing exactly the opposite of that in court...

Last week, we had a post following the report from NPD suggesting that file sharing in the US had dropped off significantly due to the Limewire shutdown. While there are some serious questions about NPD's methodology, we assumed that it was at least mostly accurate, and then asked if there had been a corresponding increase in music sales. After all, despite what you hear from the RIAA/MPAA, the end game should be about business being stronger, not about "reducing piracy." And if "reducing piracy" doesn't end up with more sales, then what good does it do, really?

In the comments to that article, commenter artistrights pointed to a report from Soundscan that music sales had been up for five straight weeks, and separately to another report claiming that Taylor Swift's album sold well after Limewire shut down, selling a million albums in its first week of availability.

I think this is worth exploring, because I've been asking for some actual empirical evidence and we have some. If it's really true that reducing piracy leads to greater sales, that would surprise me, but it would be good to know. If it turns out that reducing piracy leads to more revenue than could have been made otherwise (such as by embracing file sharing) then that would likely cause me to change my opinion on the best strategy for the RIAA to take in this fight. As for the Taylor Swift example, I don't think that proves much of anything, frankly. Throughout the file sharing era, there have been a bunch of releases that sold over a million copies in their first week. In fact, prior to Napster, there had been only two such releases. The rest all came post-Napster. So I'm not sure we can really learn too much about that. Big hit albums still sell. I'm not sure that's got anything to do with Limewire.

As for the other link to sales being up for a five week period, that's definitely worth noting, though, it does not correspond to the same quarter that the NPD study covered. NPD looked at Q4 of 2010. The link above is talking about February and March of 2011. Now, it's entirely possible there's a lag, and people who stopped using Limewire did nothing for 3 months and then suddenly started buying. Perhaps that's the case. If anyone has more info on what was actually selling during these past five weeks, that would help us dig a bit deeper into this information. Some might also point out that SoundScan is not the most trustworthy source of data on music sales -- but it wouldn't surprise me if it were accurate "enough" for the type of music that people used Limewire for, so I wouldn't write it off just because it's Soundscan.

I'm not yet convinced that these two data points are necessarily connected, but it is certainly worth noting the recent bump, and it would be great if folks here were able to dig in a bit deeper and see if we can unpack the reasons for the bump in music sales over the past few weeks.

We've been covering how more indie authors are discovering that just releasing their works as incredibly cheap ebooks can be amazingly profitable. But just how cheap? Kevin Kelly highlights how JA Konrath, who is the leading experimenter in this arena, has just discovered that $2.99 might have been too high. As an experiment, he dropped the price on one book that was $2.99 down to $0.99... and saw sales leap from 40 per day to 620 per day. As Kelly notes (his original math was wrong, but now there's updated math and more, including Amazon's cut:

Do the math:

2.99 x 40 = 11.96

.99 x 620 = 613.8

Amazon pays out 35% for ebooks priced below $1.99, and 70% for ebooks that are $1.99 and up. So the math is:

2.99 x 40 = 119.60; x .70 = $83.72


.99 x 620 = 613.80; x .35 = $214.83

I don't think publishers are ready for how low book prices will go. It seems insane, dangerous, life threatening, but inevitable.

It's not even that publishers aren't ready for how low book prices will go... it's that they still don't even realize that the prices are going to go down at all. Instead, many of them are still looking to make the prices go up, not realizing the umbrella they're creating for disruptors.

Just as a whole bunch of folks have been sued in one of these mass copyright infringement shakedown lawsuits over sharing of Funimation anime, it seems worth pointing out that a new Japanese government study on the impact of unauthorized file sharing of anime has concluded that unauthorized copies of anime often appear to increase DVD sales. The study looked at both videos showing up on YouTube as well as those that appeared on Winny, the super popular file sharing platform in Japan. The study found a very strong impact from YouTube -- even saying that it appears many people learn about potential anime DVDs by watching the videos on YouTube first. With Winny, the impact wasn't as strong, and could decrease rental income, but did not decrease DVD sales. Of course, the study only looks at the correlation of videos appearing online and sales, rather than proving any causal link, so it's possible that other variables are involved. At the very least, though, this study (which is similar to other studies we've seen) certainly suggests that having the video widely available doesn't kill off sales, as many industry folks insist.

As pretty much everyone knows, focus and perspective make all the difference in how you view anything from politics to family, and in business too. Many times in discussions on the true impact of piracy, the comments are flooded with what seems to be two firmly entrenched sides. You have those that suggest that the focus should be on whether or not infringement is wrong. On the other side, you have those that want to look at the overall impact of what is occurring.

Now, I won't stake out a position on the validity of either argument, but one of the things I hear quite often from those making the moral argument is that it's important to consider the wishes of the creator when thinking about this stuff. I happen to agree. But I also happen to think that an important change that is occurring is that creators are beginning to push away from the easy reaction of getting upset at piracy and beginning to look at the vastly more important bottom line of their business.

Take, for example, a recent blog post by Daniel Amitay on the recent relative success of his Punch 'Em -- Fight People Through Your Camera iPhone app. He had noticed that his sales had increased around the end of December and he had the same thought when preparing to write about that you're all having right now:

"This post was going to be about Christmas and how it was responsible for the (relatively) long term increase in my app sales."

But then he noticed something strange.  He found that the timing with folks receiving new phones or devices for Christmas didn't really match up with the sales.  Also, even after what you would expect to be the Christmas rush, the increase in sales maintained.  He supplied the graph below:

Note that, whatever the timing, as piracy of his app increased, so did sales, although certainly not to correlating scale. But who cares? He got more sales! As Daniel himself notes:

"It's pretty obvious why developers get upset about piracy: uh, it's stealing. Aside from that, I'm pretty straightforward about the fact that decisions should be profit-driven. Throughout Punch 'Em!'s paid lifetime, I couldn't raise its sales count in the long term. So if thousands of users end up pirating my app, but hundreds buy it as a result of hearing about it from their pirate buddies, why should I cry?"

Forgive Daniel for conflating infringement with stealing because, as I said, I understand the natural reaction to get upset at piracy. His conclusion is far more important: it's the bottom line that matters. And that brings me back to the premise I posed at the beginning of this piece, that focus and perspective make all the difference. The bottom line is that two things happened at the same time for Daniel's iPhone app. Infringement increased nearly 40x and sales increased by more than 2x. He could easily have focused on the infringers and the fact that clearly his sales should have gone up more than 40x (even if that's not strictly a factual way of looking at it). Instead, he focused on the fact that his sales doubled, and now he's happy. And he even tried to go the DRM route and found out why that path didn't work:

"Interesting thing, I had code in previous versions which did just this. It checked (through various means) if the IPA had been cracked, displayed a message asking that they purchase the app, and exited. My conversion rate was 0%. Beyond the conversion rate issue, my app was pirated very little--after all, my app quit almost immediately, so why share it at all?"

As Nina Paley said recently, sharing increases value. Focus on the value awarded by sharing and you'll find that "piracy" can make you happy (and money!). Isn't that bottom line the most important thing on which a business can focus?

About a year and a half ago, I gave a presentation at a music industry event, where one of the points I tried to make was that those who were betting on digital sales as a savior were making a fool's bet. However, many in the industry have been infatuated with this idea, even if the evidence always suggested that digital sales would only ever make up a small fraction of what CD sales used to bring in. Earlier this year, we warned that the growth rate was slowing, and now as we hit the end of the year, it's confirmed that while there's still some growth, it's slowed down dramatically. Betting on digital sales as the key business model for music is, and is going to remain, a mistake. There are lots of other opportunities to make money, but you have to think beyond just selling music.

Amazon seems to have a way with presenting information about its ebook sales in a way designed to mislead people into thinking it's more significant than it really is. You may remember last year, when Amazon announced that on Christmas day, for the first time ever, ebooks outsold regular books. That got a lot of press coverage. But it was somewhat meaningless. That's because on Christmas, plenty of people who received a Kindle probably decided to buy an ebook or three. And it's also a day when fewer people have reason to go to Amazon and buy a physical book, since they may have just received some books as gifts (though, to be fair, some may have received Amazon gift cards too, but you don't necessarily need to use them that same day).

The latest is Amazon's recent claim that ebooks are outselling hardcover books 180 to 100. Another nice headline that the press picked up, with various stories suggesting that ebook sales are now really significant. This bothered some folks who dug much deeper into the numbers over at the MeAndMyKindle blog:

So what happens if you ask how many "printed books" Amazon sold, instead of using the smaller number of "hardcover books"? Following the same ratio, Amazon would be selling approximately 334 paperbacks for every 100 hardcover books -- or a total of 434 printed books for every 180 ebooks. That would mean over 70% of the books Amazon sells are still printed books -- 180 out of 614 -- with ebooks accounting for just 29.3% of all the books that Amazon sells.

Add to that the twin facts that Amazon covers 90% of ebook sale and that it only represents 19% of the overall book market, and you get an estimate that ebooks represent about 6% of the total market. This is certainly a non-zero number, and there's no doubt that it's growing, so it's a trend to watch out for. But we're a long, long way from ebooks really being a majority of the market. As the blog points out, even Amazon admits that no ebook has sold more than a million copies:

According to Amazon's own figures, no ebook has ever sold more than one million copies. (Though Stieg Larsson's three ebooks, added together, total one million in sales -- an average of just 333,333 per book.) PC World reports Stephenie Meyer is close to selling one million ebooks -- though she's sold over 100 million printed books.

This isn't to say the ebook market isn't important, but Amazon's statements promoting ebook sales seem purposely designed to pump up the significance of ebook sales, which still represent a much smaller proportion of the market than the company would have you believe.