There are many serious and/or academic studies that show that online music piracy is not hurting legal music sales. Such as this one from earlier in 2013:
From TorrentFreak: “New research published by the European Commission’s Joint Research Centre shows that online piracy doesn’t hurt digital music revenues. The researchers examined browsing habits from 16,000 Europeans and found that there’s a positive link between online piracy and visits to legal music stores, irrespective of people’s interest in music. The study concludes that the music industry should not see piracy as a growing concern.”
This study focuses on digital music piracy vs. legal digital sales, and not the reduction of CD sales.
In the last decade, the music industry has faced many changes. In particular, it has seen its revenues decrease drastically, with industry representatives blaming most of it on piracy (IFPI, 2011). Nevertheless, the music industry seems to have embraced digitization and its many business opportunities. Indeed, digital music revenues have increased more than 1000% during the period 2004-2010, and growing 8% globally in 2011 to an estimated US$5.2 billion (IFPI, 2011, 2012). While most empirical studies have indeed confirmed a significant negative impact of piracy on sales of physical music, the growing importance of the digital sector in total music industry revenue calls for a better understanding of the impact of both piracy and other music consumption channels on legal digital sales. In this paper, we revisit the question of music sales displacement in the digital era, and analyze in detail the effect of online music streaming on the legal purchases of digital music. Conducting research on the revenue e?ects of illegal music consumption requires detailed data on the quantities of both legal and illegal music consumed by individuals. Relying on an original dataset, we are able to follow the clickstreams of more than 16,000 Internet users, and in particular their visits to legal and illegal music consumption websites. After using several approaches to deal with the endogeneity of downloading and streaming, our results show no evidence of sales displacement. Overall, our different estimates show relatively stable, positive and low elasticities of legal purchases with respect to both illegal downloading and legal streaming. Across specifications, the estimates suggest elasticities of about 0.02 between clicks on illegal downloading websites and legal purchases websites. If this estimate is given a causal interpretation, it means that clicks on legal purchase websites would have been 2% lower in the absence of illegal downloading websites. Specific country estimate show that for Spain and Italy the elasticity is zero, while it is close to 0.04 for France and the UK. All of these results suggest that the vast majority of the music that is consumed illegally by the individuals in our sample would not have been legally purchased if illegal downloading websites were not available to them. Our results are in line with the findings of recent papers analyzing music piracy (Bastard et al., 2012; Hammond, 2012). Essentially these papers show that illegal music downloads have little or no effect on legal digital sales. These findings complement and do not contradict earlier research that found substantial amounts of sales displacement of legal physical music sales by illegal digital downloads.
Another contribution of our paper is the analysis of the effect of online music streaming on the legal purchases of digital music, a question that has received very little attention in the empirical literature thus far. On this particular question, our elasticity estimates show somewhat larger figures, ranging from 0.024 in our Tobit specification to 0.07 in the OLS case. Controlling for individual fixed effects leads to a 0.05 elasticity, suggesting complementarity between streaming services and purchases of legal digital music. Again, country differences show that this effect is larger for France and the UK (around 0.06) while it is smaller for Spain and Italy (around 0.035). Our results are in line with the results in (DangNguyen et al., 2012), the only study that has, to our knowledge, analyzed the question so far. Taken at face value, our findings indicate that digital music piracy does not displace legal music purchases in digital format. This means that although there is trespassing of private property rights (copyrights), there is unlikely to be much harm done on digital music revenues. This result, however, must be interpreted in the context of a still evolving music industry. It is in particular important to note that music consumption in physical format has until recently accounted for the lion’s share of total music revenues. If piracy leads to substantial sales displacement of music in physical format, then its effect on the overall music industry revenues may well still be negative. We cannot draw policy implications at the industry-wide level, as our analysis is only confined to the digital segment of the music industry. Nonetheless, digital music revenues to record companies are growing substantially, reflecting the increasing importance of digitization in the music industry (IFPI, 2012). From that perspective, our findings suggest that digital music piracy should not be viewed as a growing concern for copyright holders in the digital era. In addition, our results indicate that new music consumption channels such as online streaming positively affect copyrights owners.
How many studies are needed for the music industry to understand that they are chasing ghosts?
This month the second season of the popular TV series Game of Thrones is launched on DVD and BluRay in Norway.
The series is one of the most illegally downloaded TV shows. In spite of that, the sales figures look very good. The first season sold 43000 box sets in Norway, a very good figure for a box set in a small country. The second season had a day-one sale of 22500 box sets.
The TV business said that illegal downloading ruined the commercial possibilities of TV shows. But as was the case with the popular Lost series, box sets and single DVDs and BluRays are selling very well, at least in Norway, where I live.
Maybe it even is BECAUSE of illegal downloading? People are tired of waiting, tired of advert breaks, and tired of watching only one episode per week. But I think they are also tired of the relatively low quality of the downloaded files, so when the box sets come out, they buy them.
Both Lost and Game of Thrones have proved that illegal downloads do not kill the business, but can add to it, since new customers (viewers) are reached, and stronger bonds are tied.
Hi everyone. I was browsing some music reviews and found that I wanted an album by electronica producer Mental Overdrive, who is Per Martinsen in real life. This album, simply called “083″, was released in 2004 and after 15 minutes of googling I could not find it on any torrent site or in the free music blogs.Maybe it simply was too old?
So what to do? Sorry, can’t afford to pay for a CD (it would cost around 200 NOK, 25 euros) and don’t want to take the risk of money wasted.
Well, I simply signed up for Emusic, a music download service that offers 25 tracks for free when you sign up. The trial period can be cancelled any time within 7 days, and the music ends up to be yours to keep, and for zero money.
I was actually a paying member of Emusic back in the early 00s, when their pricing plan was around 10 dollars a month for unlimited downloads. Their plan change was not as beneficial, but it does show that consumers are willing to pay if the price is good/right/low.
The Finnish anti-piracy group CIAPC has copied the source code and design of The Pirate Bay, the most notorious media piracy site on the net. The Pirate Bay is outraged and plans to sue CIPAC for breaking their policies. “People must understand what is right and wrong”, The Pirate Bay says.
CIAPC copied The Pirate Bay’s design for their anti-piracy campaign, but the site does not contain any torrents. Instead, links point to a pagethat talks about legal alternatives to Pirate Bay.
A spokesman for Pirate Bay said: “We are outraged by this behavior. People must understand what is right and wrong. Stealing material like this on the internet is a threat to economies worldwide. We feel that we must make a statement and therefore we will sue them for copyright infringement. If not even IFPI and their friends can respect copyright, perhaps it’s time to move on?”
CIAPC is assisted by the music lobby group IFPI, who sued Pirate Bay’s admins in Finland two years ago.
“Our site (and all of its contents) is free of charge for anyone for personal usage. Organizations (for instance, but not limited to, non-profit or companies) may use the system if they clear this with the system operators first,” Pirate Bay’s policy reads, and continues: “We reserve the rights to charge for usage of the site in case this policy is violated. The charge will consist of a basic fee of EUR 5,000 plus bandwidth and other costs that may arise due to the violation”.
The Pirate Bay now believes it is forced to take CIAPC to court and demand compensation. The irony of this matter is just an added bonus.
CIAPC copied the Pirate Bay site despite the fact that Finnish ISPs have been ordered to block the website for public access.
A new study released by researchers from Boston’s Northeastern University shows that censoring “pirate” sites by blocking or seizing their domains is ineffective. The researchers looked at the availability of various pirated media on file-hosting sites and found that uploaders post more new content than copyright holders can take down. A better solution, according to the researchers, is to block the money streams that flow to these sites.
The file-sharing landscape has often been described as a hydra. Take one site down, and several new ones will take its place. Blocking or censoring sites and files may have a short-lived effect, but it does very little to decrease the availability of pirated content on the Internet.
Researchers from Boston’s Northeastern University carried out a study to see how effective various anti-piracy measures are. They monitored thousands of files across several popular file-hosting services and found, among other things, that DMCA notices are a drop in the ocean. The researchers show that file-hosting services such as Uploaded, Wupload, RapidShare and Netload disable access to many files after receiving DMCA takedown notices, but that this does little to decrease the availability of pirated content.
Similarly, the researchers find evidence that the Megaupload shutdown did little to hinder pirates. On the contrary, the file-hosting landscape became more diverse with uploaders spreading content over hundreds of services.
“There is a cat-and-mouse game between uploaders and copyright owners, where pirated content is being uploaded by the former and deleted by the latter, and where new One-Click Hosters and direct download sites are appearing while others are being shut down,” the researchers write. “Currently, this game seems to be in favour of the many pirates who provide far more content than what the copyright owners are taking down,” they conclude.
The study also looked at the number of sites where copyrighted content is available. The researchers scraped the popular file-hosting search engine FilesTube and found that there were nearly 10,000 distinct domain names and 5,000 IP-addresses where alleged pirate content was hosted.
For example, a search for “dvdrip” returned results on 1,019 different domains using 702 distinct IP-addresses.
From the above the researchers conclude that anti-piracy measures aimed at reducing the availability of pirated content are less effective than often suggested. A more fruitful approach, they argue, may be to take away their ability to process payments, through PayPal or credit card processors. This is already happening widely, especially with file-hosting services that offer affiliate programs. However, as the researchers rightfully note there are also many perfectly legitimate file-hosting services that operate within the boundaries of the law and can’t be simply cut off.
The researchers end with the now common mantra that when it comes to online piracy, innovation often trumps legislation.
“Given our findings that highlight the difficulties of reducing the supply of pirated content, it appears to be promising to follow a complementary strategy of reducing the demand for pirated content, e.g., by providing legitimate offers that are more attractive to consumers than pirating content.”
I’d like to run another poll with you guys. Please feel free to vote – it is 100% anonynomous!
Poll question: Do you consider it to be piracy to download MP3 files of a previously bought album? Let’s say you own some music as an LP, bought in the 80s. Now you don’t own a turntable anymore, but you can download MP3 or better files from the net from a site that offers unauthorized files. Since you already paid for the LP, should it legally and technically be “piracy” to download these files?
December was a bad month for downloads, as I worked too much, and prepared for Christmas too much to look for new downloads to grab. But the last month I did some hunting, and found these little DVDRs floating around. Naturally, I cleaned them up from the net:
Bamboo house of dolls
Bridge of dragons
Fire with fire
One in the chamber
Resident Evil 5: Retribution
Robin Hood (Douglas Fairbanks)
Robin Hood (Patrick Bergin)
Tales from the dark side
The Bourne legacy
The Expendables 2
The Tall man
Total Recall (2012)
Out of these I actually watched Six Bullets, a small but nice action film with Jean Claude van Damme. Sorry, JCvD, but you received no money from me this time, but that would be no difference compared to the absence of the internet; had the net not existed and one was forced to buy physical DVDs, I would never have bought this movie, as my budget does not stretch that far.
The music industry is slowly trying to find new ways to make money when CD sales are being reduced every year. The newest trend is streaming, such as Spotify. The problem is that this is not really a “new model” – it is still about charging individual users a sum of money and then try to distribute that money back to record companies and composers.
Here’s the truth about music streaming and what artists and composers earn from it:
According to a number of music executives, Spotify generally pays 0.5 to 0.7 cent a stream for the paid tier, which results in $5,000 to $7,000 per million plays.
Read the whole article here. It shows that even a million plays won’t keep an artist/composer with rent, food and working tools for a month.
Even for an under-the-radar artist like Ms. Keating, who describes her style as “avant cello,” the numbers painted a stark picture of what it is like to be a working musician these days. After her songs had been played more than 1.5 million times on Pandora over six months, she earned $1,652.74. On Spotify, 131,000 plays last year netted just $547.71, or an average of 0.42 cent a play.
The ones that really do make money off of music these days, are ISP who sell broadband services. Why are they not taken on by the music industry?
November 2012 was a pretty good month for downloads. I grabbed the following movie DVDRs:
Abraham Lincoln Vampire Hunter
Black Fox 1
Bring me the head of Alfred Garcia
Johan Falk: Alla råns moder
Johan Falk: Organizatsija Karayan
Liza Marklund 6: En plats i solen
No man’s land: Rise of the reeker
North face (Nordwand)
Outpost 2: Black sun
Starship Troopers Invasion
The Amazing Spider-Man
Werewolf: The best among us
And some music grabs:
Cliff Martinez – A l’origine (soundtrack)
Cliff Martinez – Solaris
Cliff Martinez – Drive
Cliff Martinez – The Lincoln Lawyer
Cliff Martinez – Traffic
Yanni – Truth of Touch
Tangerine Dream: Dream Mixes 4
Don Slepian – Sea Of Bliss
Klaus Schulze – Dosburg Online
Klangwelt – Weltweit
Tangerine Dream – Tyranny Of Beauty
Mark Isham – Vapour Drawings
Edgar Froese – Pinnacles (2005 edition)
Kitaro – Astral Voyage
Being that Christmas is coming up, and I would like to compile another CDR of 50s and 60s holiday songs, I downloaded a bunch of Christmas music too. In fact, more than 11 gigabytes of MP3 files (last year I think I grabbed around 6 gigabytes). My collection of Christmas music is now around 35 gigabytes, although I actually listen to only a fraction of the songs.
This blog is written by a media pirate, Long John Silver, and is published by an independent publisher to protect the identity of the pirate. If the blog is abruptly deleted, it has been killed by the host, the police or the media industry.