IFPI, UK Police, Credit Card Companies Push People To Pirate Music, Rather Than Pay For It

from the did-they-really-do-that? dept

Bizarre move out of the IFPI. It’s gleefully announced a new deal, in conjunction with the London Police and Visa and MasterCard to cut off credit card services to online music stores who the IFPI accuses of selling infringing MP3s. This is really targeting sites like MP3Fiesta, which is sort of a modern version of Allofmp3.com. Of course, what they seem to be missing is that both of these sites were examples of people, who would otherwise likely be downloading totally unauthorized versions, being willing to pay for MP3s at a much more reasonable price. What I never understood was why the music industry never realized that these sites actually showed a business model that worked. Tons of people were happy to pay for the music when the prices seemed much more reasonable. What these services really showed was how much the industry has artificially inflated the price of music.

But, of course, in cutting off credit cards to those sites, two simple things are likely to happen in response: first, those sites will simply find alternative payment means. That may still limit some, but it hardly stops these sites from existing. But, more importantly, if people can’t get music at these prices, it seems a lot more likely that they’ll shift to totally free options, rather than go back to paying $0.99 per song (or more!). So, effectively, all this move really does is drive more people to stop paying for music. Is that what the record labels pay the IFPI to do these days?

Filed Under: , , ,
Companies: ifpi, mastercard, visa

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “IFPI, UK Police, Credit Card Companies Push People To Pirate Music, Rather Than Pay For It”

Subscribe: RSS Leave a comment
Spaceman Spiff (profile) says:

Choose your poison, or pleasure

Personally, I no longer purchase major-label music. I buy CDs directly from artists. At least I know where most of the $$ goes to, and it helps them establish a real relationship to me. And, I know they have no issue with me ripping their CDs to mp3 or other mobile format in order to play their music on the road, or otherwise. Finally, most of these artists don’t mind if I give a couple of these mp3s to friends in order to turn them on to the music the artists are creating. In the long run, this is a benefit to them (free advertising).

Black Campbell (user link) says:

I’ve been of similar opinion, as well, Mike. Several of my favorite bands don’t get US release for their albums. The music and entertainment industries (publishing included) are stuck old thinking and it’s been costing them. Rather that rethink and restructure their business models, they relie — as most big businesses do — on government to curtail competition and new forms of delivery.

Brian Schroth (profile) says:

Isn’t it true that these sites are not paying anything to the actual copyright holders? From the copyright holder’s perspective, these sites are actually worse than customers using a “free” alternative. In both cases, their revenue is 0, but if a free alternative is used, at least the customer won’t be using up their entertainment budget sending their money to AllOfmp3.com.

Anonymous Coward says:

Re: Re: Re:

How does that make it okay for these sites to resell said music without paying for it?

While I do not think that ‘pirating’ music for personal use is ‘stealing’ (or even giving it away to others for that matter). I do think ‘pirating’ music and then selling that music for a profit is wrong. It does highlight that some people are willing to pay at a much lower price but that is no different than itunes showing that some people are willing to pay a high price. However, none of that makes it right for these operations to resell a product that they do not pay for – that really does sound a lot more like ‘stealing’.

Anonymous Coward says:

Re: Re: Re: Re:

I don’t think the point is that these sites are good or even legal. The point I believe is trying to be made is that if the music industry lowered the inflated prices (they’re inflated because they see people spending money at these sites instead of getting it for free). So if they lower the price point (even slightly) and then state “hey the money you spend here actually supports the band” (and hopefully they would pass on more of the money to the bands et al) I believe more people will use their service/buy their product. Those who don’t probably would not buy their product at that price point.

PaulT (profile) says:

Re: Re: Re: Re:

“How does that make it okay for these sites to resell said music without paying for it?”

I fail to see how he’s suggesting that is OK. It’s simply an observation that despite these services being infringing, people are still willing to pay for the music. If nothing else, it suggests that the price alone is not the reason for these people using the services – if that were the case then why pay rather than use P2P to “steal” the music?

Attack these sites if you wish, but there are lessons here for the industry if they choose to heed them. Shutting the sites down and doing nothing else will not service the consumer demand that’s being met by these companies.

Brian Schroth (profile) says:

Re: Re: Re:

So it shows something that is true for every product that exists. Is that supposed to be useful information? If you lower the price on a product, more people will be willing to buy it. This does nothing to show that lowering the price would actually be more profitable, as the seller must consider profit-per-item as well as volume.

Chargone (profile) says:

Re: Re: Re: Re:

when profit per item is 100% (or near enough that the difference may as well be between infinity and infinity+1) then profit per Item is meaningless, and only volume is truly important on any level other than ‘more money in the pockets of shareholders and executives’

of course, given that that is the entire POINT in corporations (as opposed to other styles of business, where it varies) one shouldn’t be surprised.

Anonymous Coward says:

Re: Re: Re:2 Re:

Yes, they offered a generous split that would basically cut the music label income by 90%. It isn’t up to the merchants to determine the supplier’s sale price. The supplier sets the wholesale price, the retailer sets the retail price. If they cannot make money at it, they stop.

The tail does not wag the dog.

PaulT (profile) says:

Re: Re:

The difference here is that these sites prove the “people just want something for nothing” argument used against P2P sites completely wrong. People are quite willing to pay, it’s just that these sites offer services that customers want.

An intelligent industry would heed these trends and adjust accordingly. Remember, it’s not just cheap prices that these sites offer over and above iTunes et al., they also offer full catalogues (e.g. AC/DC and Pink Floyd, who are not available through legal digital channels) and a choice of quality (IIRC, since I never use them, but I think most offer FLAC and other formats), and so on.

While these sites should be shut down if they’re breaking trade laws or are illegal in their home country (both of which are questionable), the industry would get more sympathy if they accepted the fact that these sites are often offering a better service to their customers than they are.

Steph says:

Re: Re: Re: Re:

What I mean by this, is the term “copyright monopolies” is fairly accurate. They can charge however much they want and treat the public/consumers in whatever way they deem appropriate. They behave as they do and charge what they charge because they CAN. Competitors are squashed and the work remains overpriced. I’m willing to listen to a breakdown though. Does anyone have any idea how much it costs to put out ONE song compared to the typical $1.29 price tag? What goes where and who gets what?

Brian Schroth (profile) says:

Re: Re: Re:

That seems like a fairly insignificant distinction. These sites seem like clear copyright infringement. You can’t expect them to agree to take the offer, and thus legitimize the services. If I offer you money for something and you refuse, that doesn’t mean I can just take that thing anyway, and it’s now your fault because you refused my offer. Obviously the music is not a tangible item, but the point still holds. The actual artists, or the leeches that represent them, are not paid by these websites, so it’s not going to matter if this action causes some people to switch from a source of music where they pay someone else to a source of music where they don’t pay anyone. In both cases, the artists/leeches who represent them are not getting paid.

Anonymous Coward says:

Re: Re: Re:

Except of course Mike, you know that allofmp3 was selling outside of Russia, which violated copyright and made it all meaningless. You also know of course that what they offered the labels was a meaningless amount of money, compared to the lost market.

It was the usual snarky Russian way of acting like they are playing ball, while at the same time stealing the ball, the hoop, and your shoes.

Brendan (profile) says:

Re: Re: Re: Re:

What “lost market” are you talking about?

You seem to be missing the point.

The label prices are too high. The buyers at AllofMP3 weren’t willing to pay those prices, but they were willing to pay the lower AllOfMP3 price.

This flies directly in the face of “people just want stuff for free,” and indicates rather that people want things at a price they deem reasonable. This is up to the market (consumers) to decide, not labels. Except silly mechanisms like copyright monopolies prevent this kind of market balancing.

AllOfMP3 was doing the labels a favour by figuring out the real price people would be willing to purchase more content at.

25% of thousands of album sales at $2 is more than any percentage of ZERO sales at $10-$15.

Listen to consumers. Learn math. Make money.

Anonymous Coward says:

Re: Re: Re: Re:

“Except of course Mike, you know that allofmp3 was selling outside of Russia, which violated copyright and made it all meaningless.”

I think they were located entirely within Russia. People had to connect to servers located in Russia to buy stuff, so they weren’t operating outside of Russia or violating copyright.

Anonymous Coward says:

HOLY CRAP and an ounce of weed taped on the back

Suppose these sites switch to another payment service that can’t be blocked. What if they start asking governments to go after the consumers of these sites just as they’ve requested for them to go after online advertising networks? The MAFIAAs already have a history of shooting themselves in the foot like that. The war on piracy is truly on it’s way to becoming the next war on drugs.

Anonymous Coward says:

Credit Card Wars

So, the credit card companies can now be paid-off to block payments to your competitors? I wonder how much it costs? For example, I wonder how much it would cost Pizza Hut to have the credit card companies cut off the little pizza shop down the street? Apparently, it would be completely legal. Of course, it’s a free market, so the little shop could make the CCCs a counteroffer (but I doubt they could outbid Pizza Hut).

sam sin says:

none of this has ever been about money. it always has been and always will be about control! on top of which, we are the ones to blame. if we as customers had not thought to ourselves, ‘sorry you are getting done for file sharing but i ain’t, so hard luck’ and made a stand in the beginning, maybe, just maybe, things would not have gotten so far out of hand as they have. since day 1, the copyright industries have been after controlling the internet. if they get control of that, they control everything! and what makes it worse is that governments, politicians, law makers and law enforcers are falling over themselves to help that happen. they dont realise the can of worms they have opened or the consequences for the future. once they do, gonna be too late!

Add Your Comment

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...