Are Music Piracy Numbers Overblown?

It's always so difficult to determine what to make out of any statistic regarding content piracy, since it's all such a big guess. Think about it for a second - if it's as difficult as it is to get precise numbers on real sales that aren't being reported (anything outside of SoundScan, like direct downloads or CD sales off an artist's website, usually isn't taken into consideration), what makes anyone think that the piracy numbers are anything more than a number pulled out of thin air?

I've heard from usually reliable sources that for every 1 legal digital download there are 20 that are pirated, yet others have told me it's only 1 in 10. Last week the IFPI reported that sales from digital albums dropped 12%, and in their minds it was mostly due of pirated music (you can read more about the report here). Don't you think it could be because the number of cash cow CD sales are down, or maybe because there hasn't been as many really big hits lately, or that music in general is soft because there hasn't been a new trend that pushes sales for a while?

Former EMI president Rupert Perry once told me in an interview for my Music 3.0 book that even back in the 60's they always thought that they were losing at least 20% of their sales to piracy, so this isn't something new to the industry at all. But it certainly makes for a convenient excuse when sales decline year after year the way they have.

Now a study conducted at Carlos III University of Madrid in Spain, in collaboration with scientists at the IMDEA Networks Institute, the University of Oregon (USA) and the Technical University of Darmstadt (Germany), seems to give us a better picture of exactly what's happening in piracy land.

According to an article on Smarplanet, the researchers found that illegal file sharers tended to be either  organizations (like record labels) that put up fake or malware-infected files to discourage piracy (called “fake publishers”), or "top publishers" who earn a profit from advertising and subscription using pirated content as bait.

In the end, the study concluded that "since BitTorrent’s popularity is tied to a small group of users who engage in illegal file-sharing for 'economic benefits,' if the same users lost interest or simply disappeared, BitTorrent’s traffic would be 'drastically reduced.'”

This suggests that piracy, while still a problem, isn't as bad a problem as we've been lead to believe, and certainly no worse than it's ever been. The problems of the music industry must lie somewhere else, which is something that we'll cover in another post.

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