IFPI: Piracy Bad!!! Government Must Fix Because We Don't Want To Adapt!

from the wake-up-folks dept

It’s that time of the year when the IFPI comes out with its annual fear-mongering report, and this year’s has really gone overboard into the ridiculous. The basics are pretty much what you’d expect (“piracy bad! industry dying! governments must break everything to protect us!”). However, the details are just downright laughable. The entire report seems premised on the idea that direct music sales is the only thing that really matters (a blatant confusion about the difference between the recording industry (which the IFPI represents) and the music industry (which the IFPI pretends to represent). You can read the entire report below, but we’ll go through some of the lowlights:

In the intro, after bemoaning the losses in sales (but totally ignoring the massive increases in every other aspect of the music business), it claims that the tide is turning on the public’s perception of unauthorized access to content. Proof? Rupert Murdoch’s attack on Google and Microsoft’s ridiculous decision to kick people off Xbox live if they made use of a glitch.

You hear it around the world: this is no longer just a problem for music, it is a problem for the creative industries: affecting film, TV, books and games. In this arena, the music industry is the pathfinder of the creative industries, pioneering with new offerings for the consumer. In 2009, Rupert Murdoch said that the content kleptomaniacs should not triumph and Microsoft spoke out against piracy, ready to ban players from Xbox live if they had modified their consoles to play pirated discs — no three strikes procedure needed!

Of course, both are incredibly poor example choices. Murdoch wasn’t actually complaining about “thieves.” He was complaining about Google sending him traffic without paying. That’s hardly the sort of issue the recording industry faces. And Microsoft was banning people not just for modifying their legally purchased hardware, but for using glitches made by software programmers. Again, an exceptionally different situation. You would think that IFPI could come up with something more compelling.

Then, amusingly, the IFPI mentions the Lily Allen saga with an amazing rewrite of history:

It was, until recently, rare for artists to engage in a public debate about piracy or admit it damages them. In September 2009, the mood changed. Lily Allen spoke out about the impact of illegal file-sharing on young artists’ careers. When she was attacked by an abusive online mob, others came to her support.

First, that’s not even close to true. Artists have spoken out about those issues for years (Lars Ulrich, anyone?). And Allen wasn’t “attacked by an abusive online mob.” Lots of people who actually understand these issues pointed out that while she was complaining about file sharing, she and her label (EMI) were distributing dozens of songs on her website in a totally unauthorized manner.

Throughout the report, the IFPI makes the false claim that it’s representing “the music industry” and falsely describes “the music industry’s revenue” as being limited to sales of music. As an example:

In 2009, for the first time ever, more than a quarter of the recorded music industry’s global revenues (27%) came from digital channels — a market worth an estimated US$4.2 billion in trade value, up 12 per cent on 2008.

But, of course, that’s wrong. It is not the music industry’s revenue. It’s the recording industry. Similarly, the report only focuses on new ways to sell music when it discusses “new business models” and only briefly mentions efforts to connect with fans, suggesting (laughably) that Warner Music has been the leader here, rather than a distant follower. As such, it should be no surprise that the report continually ignores the fact that the music industry has actually been growing (and that’s based on a study from the music industry itself). This report is like the makers of horse carriages insisting that the transportation market is dying, because they’re selling fewer horse carraiges as automobile sales ramp up.

The report particularly singles out Spain — which is no surprise, given that the Spanish courts have recognized that personal copying isn’t a crime and taking away broadband access for copyright infringement makes no sense. The report moans and complains about how the Spanish music market is dying — but again, only focuses on albums sales (as an aside, amusingly enough, I purchased a bunch of albums from Spain this year).

From there, the report goes on and on at length about how file sharing is killing music (despite the evidence to the contrary) and how the only solution is for governments to force ISPs to play copyright cop. It conveniently brushes off all the evidence to the contrary, and ignores the statistics showing a massive increase in new music hitting the market.

The report also tries to rope in other industries to show the “harm” caused by unauthorized file sharing:

Case studies around blockbuster movies show how top films now suffer from the same digital piracy problems as popular albums. Pre-release copies of Wolverine were downloaded 100,000 times in 24 hours after a leak in April 2009. In 2008, seven million copies of Batman: Dark Knight were downloaded on BitTorrent. This has a ripple effect across the industry, on investment and jobs. In the US alone, the film and television industries are estimated to employ 2.5 million people, according to MPA.

Unfortunately, neither “case study” supports the claim by the IFPI of “harm”. Dark Knight was the highest earning movie of 2008 despite widespread file sharing, and a study comparing the box office results of Wolverine with other similar movies suggests that the pre-release downloads may have actually helped it at the box office. The only other “proof” is a quote from a filmmaker insisting that file sharing is taking away revenue. Bold claims in a year when Hollywood had its biggest box office take ever.

Of course, it goes on to say that Hollywood is losing jobs due to this, even though Hollywood’s own studies show that job growth is expected over the next decade, as alternative models come into play.

The section on kicking people offline after accusations (not convictions) of file sharing is particularly amusing. Of course, the IFPI tries to redefine it as “graduated response.” It cites numerous surveys that say people would stop file sharing under such a program, but reality seems to trump what people say they would do. And, nowhere has anyone explained why the threat of kicking people offline will actually cause anyone to buy. We already know it won’t — because today’s threat of millions of dollars in fines hasn’t slowed down file sharing in the slightest, despite being a much more significant punishment than losing your internet connection.

From there, it talks about the various successes the industry has had in ramming through legislation to kick people off the internet, ignoring the questions about the constitutionality of those programs in places like France where the law has been delayed over concerns it violates EU data privacy rules, or the massive protests against such backroom deals in places like New Zealand. Instead, the report falsely suggests there’s widespread support for these programs. The report also falsely claims that ISPs in the US have agreed to private deals to kick people offline. While there was a brief claim yesterday that Verizon had made such a deal, the company quickly denied that and admitted that it had not kicked anyone offline. Oh, and not surprisingly, the report fails to note that the French agency put in place to administer its law, Hadopi, was caught infringing on copyrights in its own logo — showing just how ridiculous a blanket policy is for dealing with these issues.

The report then has a whole section on the “success” story of South Korea, which is a joke. South Korea had a thriving music industry entirely without these kinds of laws, because smart music industry execs, like JY Park, have embraced new business models and basically admitted that selling CDs or downloads was a dead-end business. And while new laws in South Korea may have temporarily boosted music sales, the IFPI totally ignores the massive downsides to the laws that have resulted in various service providers blocking any music uploads or video uploads, seriously damaging the ability to create useful online services for users.

In the end, the report is really more of the same. It’s the buggy makers pretending they represent the transportation business and demanding laws that block the development of automobiles in order to keep selling more buggies. But, of course, progress can only be blocked for so long, and it’s about time that the IFPI entered the 21st century.

Filed Under: business models, ifpi, music, three strikes
Companies: ifpi