Study Says: Lack Of Innovation, Not File Sharing, Real Problem For Record Labels
from the maybe-you-shouldn't-kick-your-biggest-customers-off-the-Internet dept
Nastybutler77 was the first of several to direct our attention to a new Dutch study (pdf, via Ars Technica) by Professor Nico van Eijk of the University of Amsterdam. van Eijk finds, once again, that file sharers aren't just consuming copyrighted material voraciously, they're consuming all media voraciously (especially concerts, films and games). The study also concludes that there "isn't a clear relationship" between the decline in sales and file sharing, while also finding that (shockingly) fear of evolution prevented the recording industry from adequately adapting their business models to the broadband age. While the recording industry is having problems, argues van Eijk, it has less to do with file sharing, and more to do with the fact they've been "abstaining from innovation" -- as the study phrases it:
"Turnover in the recorded music industry is in decline, but only part of this decline can be attributed to file sharing. Conversely, only a small fraction of the content exchanged through file sharing networks comes at the expense of industry turnover. This renders the overall welfare effects of file sharing robustly positive."van Eijk, who does a nice job differentiating between the recording and music industries, goes on to note that despite Sweden's reputation as a piracy hub, total revenues from recorded music, live concerts and collecting societies remained roughly static between 2000 and 2008 (something we've pointed out before). The study also touches on how the content industry has set the price far higher on movies and video games than people say they are willing to pay (though what people say they'll pay and what they'll actually pay obviously can be quite different). While the recording industry was busily suing customers, exploring nastier DRM solutions and trying to desperately hold on to the past -- everything changed around them -- and "reinvention of the business model" is now the only way forward, concludes van Eijk:
"And so the entertainment industry will have to work actively towards innovation on all fronts. New models worth developing, for example, are those that seek to achieve commercial diversification or that match supply and end-user needs more closely. In such a context, criminalizing large parts of the population makes no sense. Enforcement should focus on large scale and/or commercial upload activities. . . Introducing new protective measures does not seem the right way to go..."None of this will surprise Techdirt readers, given that we've made many of these points before, and study after study indicate that file sharers are some of the content industry's biggest potential customers. So, once again, we're facing a future where entertainment companies can either embrace these users and find ways to get them cheap, simple, high-quality product -- or they can demonize them, alienate them, and fight to terminate their connections to the Internet (and by proxy any purchases they might make). Place your bets.