Piracy Horrors and The Music Industry’s Twisted Reality

[Guest bigdady]

Once again the music industry has published a report featuring the desperate times record labels are facing, all because of file-sharing horrors. Each year the industry’s press releases and annual reports are ever more depressive, with their lobbyists citing horribly inaccurate research and utilizing twisted arguments to beg governments for help. Brace yourself.

The majority of the reports and press releases put out by the music industry in the past several years can be summarized in a few words: “Piracy is evil and we lose a lot of money because of it.”

Unfortunately it’s gotten to a point where we choose to ignore most updates. Not because we don’t want to voice the concerns of the music industry, but simply because there’s rarely anything new to report. We’re hearing the same tired set of complaints year after year and every bit of progress is framed as being insignificant compared to the rampant piracy underway.

In this year’s Digital Music Report published by IFPI, the position is no different.

“The overall impact of digital piracy has been to contribute substantially to the dramatic erosion in industry revenues in recent years. Despite the surge by more than 1000 per cent in the digital music market from 2004 to 2010 to an estimated value of US$4.6 billion, global recorded music revenues declined by 31 per cent over the same period,” we read.

“The two figures powerfully illustrate how, in the face of piracy, even the most progressive strategy of licensing hundreds of digital music services has been unable to prevent the steady decline in the overall legitimate music market and that decline will continue unless action is taken,” IFPI adds.

The industry representatives conveniently ignore the massive format shift that’s happening, and simply blame piracy for the fact that overall revenue is down. We’ve pointed out before that this scapegoating is unjust, but the music labels stick to their mantra and even ‘dare’ to quote one of the worst pieces of BitTorrent research ever to make their case.

Hoping to convince governments to implement harsh anti-piracy laws, the report lists several studies that show how ‘illegal’ file-sharing services are killing the music business. Among the studies cited is the one one conducted by the University of Ballarat’s Internet Commerce Security Laboratory.

Yes, these are the researchers that managed to make extremely inaccurate claims about the BitTorrent landscape, not once, but twice. The part that’s quoted by IFPI claims that 89% of all torrents “from a sample” link to copyrighted material, but as we pointed out before this sample is not really representative of the content that’s available on BitTorrent.

Of course we’re not going to argue here what the accurate percentage should be, it may be much lower, or even higher. But the sad part is that IFPI is once again cherry-picking studies in an effort to influence the opinions of politicians while ignoring all studies and statistics that show opposite effects.

Those who take the time to read it will notice that the entire Digital Music Report is one big rant against piracy, and a twisted one at that. For example, aside from citing doubtful studies, IFPI claims that album sales of starting artists fell 77% between 2003 and 2010 due to piracy. That’s pretty bad, right?

What they leave out is that all album sales fell dramatically, and that the sale of singles increased by more than 1000% in the same time. The latter is a quite spectacular figure, but also one that’s totally ignored in the report. Perhaps there’s an alternative explanation?

The sad part is that even with stricter anti-piracy laws there’s probably not going to be much change. We’ve seen this in France where Hadopi was introduced last year and we’ll probably see this in other countries as well. Piracy will always exist, the trick is to make it obsolete.

And this can be done to a certain extent.

Take the European music streaming application Spotify for example. They’ve signed up 750,000 users in the first year and have already become the second largest source of digital revenue for the record labels in Europe. Also, note that these people don’t have to pirate anything, but they don’t have to buy any albums or singles either.

Indeed, why doesn’t the report mention Spotify as a reason that album sales are down?

The only way the music industry can save itself is when it acknowledges that music consumption is drastically changing, and that it has to seize opportunities instead of focusing on a threat that exists mostly in their imagination.