Study Suggests Shutting Down Filesharing Sites Would Hurt Music Industry, New Artists

from the you-don't-say dept

The evolution of the music industry’s response to the fact that copyright infringement exists on the internet has been both plodding and frustrating. The industry, which has gone through stages including a focus on high-profile and punitive lawsuits against individual “pirates”, its own flavors of copyright trolling, and misguided attempts to “educate” the masses as to why their natural inclinations are the worst behavior ever, have since settled into a mantra that site-blocking censorship of the internet is the only real way to keep the music industry profitable. All of this stems from a myopic view on piracy held by the industry that it is always bad for every artist any time a music file is downloaded for free as opposed to purchased off of iTunes or wherever. We have argued for years that this view is plainly wrong and far too simplistic, and that there is actually plenty of evidence that, for a large portion of the music industry, piracy may actually be a good thing.

Well, there has been an update to a study first publicized as a work in progress several years ago run by the Information Economics and Policy Journal out of Queen’s University. Based on that study, it looks like attempts to shut down filesharing sites would not just be ineffectual, but disastrous for both the music industry as a whole and especially new and smaller-ticket artists. The most popular artists, on the other hand, tend to be more hurt by piracy than helped. That isn’t to be ignored, but we must keep in mind that the purpose of copyright law is to get more art created for the benefit of the public and it seems obvious that the public most benefits from a larger successful music ecosystem as opposed to simply getting more albums from the largest audiences.

The methodology in the study isn’t small peanuts, either. It considered 250,000 albums across five million downloads and looked to match up the pirating of those works and what effect that piracy had in the market for that music.

“I now find that top artists are harmed and mid-tier artists may be helped in both markets, but that these effects are larger for digital sales,” Lee tells TorrentFreak. “This is consistent with the idea that people are more willing to switch between digital piracy and digital sales than between digital piracy and physical CDs.”

The findings lead to the conclusion that there is no ideal ‘one-size-fits-all’ response to piracy. In fact, some unauthorized sharing may be a good thing.

This is in line with observations from musicians themselves over the past years. Several top artists have admitted the positive effects of piracy, including Ed Sheeran, who recently said that he owes his career to it.

None of this is to argue that piracy is always a net benefit, obviously. Such an argument would be the counterargument to the music industry’s description of piracy as always bad, all the time, for everyone. And it would be equally fallacious. What this study chiefly points out is exactly what the conclusion above states: there is no one-size fits all truth on the effect of piracy for artists. It helps some, it hurts others.

While we shouldn’t take the negative impact on artists it may hurt lightly, remember that this is all framed by a music industry regularly calling for the blocking of filesharing sites. That really is a one size fits all “solution” to piracy and, based on this study, it would hurt many, many musical acts.

According to the researcher, the music industry should realize that shutting down pirate sites may not always be the best option. On the contrary, file-sharing sites may be useful as promotional platforms in some cases.

“Following above, a policy of total shutdown of private file sharing networks seems excessively costly (compared with their relatively small impact on sales) and unwise (as a one-size-fits-all policy). It would be better to make legal consumption more convenient, reducing the demand for piracy as an alternative to purchasing,” Lee tells us. “It would also be smart to experiment with releasing music onto piracy networks themselves, especially for up-and-coming artists, similar to the free promotion afforded by commercial radio.”

The pain here is in how obvious it all is. We’ve been saying exactly this for years, except the proposed solutions from the music industry have only grown more drastic in that same time. Flat censorship is something of a nuclear option and it’s being used against sites that actually help some percentage of artists.

How in the world is that the best plan for a thriving music ecosystem?

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Comments on “Study Suggests Shutting Down Filesharing Sites Would Hurt Music Industry, New Artists”

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23 Comments
Stephen T. Stone (profile) says:

Re: Re: So what is "he best plan for a thriving music ecosystem?"

I have no specific suggestions, though I cling to the broader notion that we need a music ecosystem that helps artists at all levels thrive instead of one that helps artists with multi-million-dollar recording contracts and shuts out artists without such contracts. If filesharing can help those smaller artists, they should have every right to exploit filesharing for their benefit.

Anonymous Coward says:

Re: Re: So what is "he best plan for a thriving music ecosystem?"

Hmm, the Grateful dead figured it out several decades ago, before the Internet existed, that recording of their music increased their ticket sales for concerts, and as those ticket sales were much more profitable for them than record sales. they enabled people to record straight off of their mixing desk at concerts.

It is quite possible to make a living as a musician while giving away recordings, by performing in concerts, or using patronage to fund the creation of new works. That is actually work for your living.

The people who make the most noise about piracy and file sharing are the old gatekeepers, and they need to be able to control the artists and recording so as to maximize their profits, while paying the artists the minimum they can get away and keep the productive.

Anonymous Coward says:

It's not even an "update", it's a re-hash, using extreme "statistics".

I read this several days ago. Tortured beyond belief. — You have NOT read it, because it’s full of squiggles that pass for math and pretend to be relevant to facts, and you can only think that with all that, must be authoritative.

Right in the first few paragraphs undermines itself:

First, it’s re-hashed data from 2008, and entirely different era.

2nd, it’s not so strong as you claim, just more “indicates” and “tends to show” academic vagueness.

3rd, you re-write it only because supports your bias.

Stephen T. Stone (profile) says:

Re: It's not even an "update", it's a re-hash, using extreme "statistics".

Rehashed data can still be useful, even ten years later. Our current era of filesharing has not evolved that much since the days of 2008; if anything, the legal music streaming market has changed much more.

Phrases such as “indicates” and “tends to show” may sound like academic puffery, but they point to real trends and patterns that emerge from the data. Try to counter the actual conclusions drawn from the data, not the language used to describe them.

Even if ideological bias is the basis for writing this article, you should have known by now that Techdirt leans in a specific direction on issues like this. Complaining about bias here is as pointless as complaining about the right-wing editorial slant at Breitbart—and equally as ignorant.

ThaumaTechnician (profile) says:

Re: Re: It's not even an "update", it's a re-hash, using extreme "statistics".

Rather than arguing with an AC about the study’s methods, read it yourself:

http://qed.econ.queensu.ca/working_papers/papers/qed_wp_1354.pdf

I’ve just finished reading the Conclusion, it doesn’t make bold/outlandish claims AFAICT, just moderate(d) ones. Now to plow through the paper to see when the Conclusions are justified.

Anonymous Coward says:

Re: It's not even an "update", it's a re-hash, using extreme "statistics".

“2nd, it’s not so strong as you claim, just more “indicates” and “tends to show” academic vagueness.”

If you want statistics presented as unabashed certainty and bullshit, go to a sales report meeting. If you want honesty, you’ll have to be content with “academic vagueness.” That you don’t want honesty is telling.

Anonymous Coward says:

Re: It's not even an "update", it's a re-hash, using extreme "statistics".

First, it’s re-hashed data from 2008, and entirely different era.
2nd, it’s not so strong as you claim, just more "indicates" and "tends to show" academic vagueness.
3rd, you re-write it only because supports your bias.

Congratulations, blue, you just described every RIAA/MPAA-supported study. Genius!

Rekrul says:

That isn’t to be ignored, but we must keep in mind that the purpose of copyright law is to get more art created for the benefit…

Preposterous! Everyone knows that the true purpose of copyright is to protect the profits of corporations!!!

…of the public and it seems obvious that the public most benefits from a larger successful music ecosystem as opposed to simply getting more albums from the largest audiences.

Doubly preposterous! The public benefits most from multi-billion dollar corporations being profitable!!!

any moose cow word says:

“On the contrary, file-sharing sites may be useful as promotional platforms in some cases.”

The recording industry only sees that as another negative, as they want control over promotional platforms as well. They’ve figured out a long time ago that promotions was the linchpin of their profit machine. By restricting the promotional outlets available to artists, the labels not only strong-arm artists into paying for the “benefit” of their own promotional services, they can pick the “winners” by controlling which artists get access to audiences. Labels see all third party platforms not only as “competition” for their own services, but as a threat to their entire enterprise. It’s not just filesharing, it’s social media and media streaming sites as well–anything outside the labels’ control that offers artists access to audiences. Without that control, they would they’d lose a huge revenue stream for their own Hollywood style accounting and be relegated to being mere publishers.

Anonymous Coward says:

“The evolution of the music industry’s response to the fact that copyright infringement exists on the internet has been both plodding and frustrating.”

What about all the copyright infringement inside of the industry itself? Maybe we should be telling them to clean up their own house before they come over here and try to clean ours. If they come over here they are just going to bring their corruption with them… o shit… already happened… no wonder people want to pirate shit from pirates that pirated it all first!

The industry is more corrupt and evil than any IP thief, and when you are that evil, the only people that give a shit about you are the ones that get paid to… which is the government because they collect taxes on stuff that gets sold, not stuff that is given away or stolen by non-government agents.

David says:

Re: Re: Re:

Where does the music industry think their next batch of stars is going to come from?

Seriously? The meat rack. You sign them on first, then you curate them. Makes for much better conditions. When the contract runs out and they think they can do better once they are famous, you drop them for the next act. New sells better.

Home recording does not actually cut into your profits if people don’t cherish the old artists.

That’s what the million dollar shows are good for: drop an artist and he has to survive under conditions he and most importantly the audience are not used to.

PaulT (profile) says:

Re: Re:

It’s always been that. The only things that the internet gave people were the opportunity to buy the individual tracks they wanted without dropping $20 on an album full of filler, and easier access to artists that weren’t what the major labels were trying to sell at that particular moment.

Whatever they want to pretend, unbundling and discovery (along with silly lawsuits and a refusal to adapt) did far more real damage to them than the piracy they were so afraid of ever could.

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