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Wednesday, January 23, 2013

Music Pirates Buy More Songs

Music Piracy image from Bobby Owsinski's Music 3.0 blog
The music industry has been blaming piracy on decreasing sales forever, but it just might be that they were more off-base than anyone thought. A new study from Columbia University called Copy Culture In The US And Germany has determined that frequent users of P2P "piracy" networks in the US actually legitimately buy 30 percent more music than their non-stealing counterparts.

Of course this hasn't been the first study that points this out, but each one is immediately shot down by the RIAA as flawed. The problem is that we all know somebody that's such a music freak that they have to either have the latest release or something that no one else is hip to yet, even if that means they have to download it illegally. Of course, kids with no money tend to steal music, but they wouldn't have bought it in the first place anyway.

Some other points from the study include:
  • Nearly half the population in the US and Germany (46% US; 45% DE) has copied, shared, or “downloaded for free” music, movies, and TV shows. 
  • Much of this activity is casual and small scale. In both countries only 14% of adults have acquired most or all of a digital music or video collection this way. Only 2%–3% got most or all of a large collection this way (>1000 songs or >100 movies / TV shows).
  • Copy culture tracks strongly with youth. Among adults under 30 in both countries, around 70% copy, share, or download media for free (70% US; 71% DE). In the US 27% in this age group acquired most or all of their digital music/video collections this way, and 10% acquired most or all of a large collection this way. In Germany the corresponding numbers are 33% and 7%.
  • In both countries offline “private copying”—copying for personal use or sharing with family and friends—is comparable in scale to online file sharing. In the US, private copying and online file sharing contribute roughly equal shares to the average digital music collection: 22%–23% among those under 30. In Germany, online file sharing contributes more to average collection size (34%, versus 18% for private copying among those under 30) but less when controlling for collection size (17% for downloading; 25% for private copying). Put differently, most Germans copy more than they download.
  • Copying and online file sharing are mostly complementary to legal acquisition, not strong substitutes for it. There is no significant difference in buying habits between those who copy or file share and those who do not. 
  • P2P file sharers, in particular, are heavy legal media consumers. They buy as many legal DVDs, CDs, and subscription media services as their non-file-sharing, Internet-using counterparts.  In the US, they buy roughly 30% more  digital music. They also display marginally higher willingness to pay.
  • In Germany much of this copying is legal under the “private copy” provisions of copyright law, which carve out a space for noncommercial personal uses, including passing copies to family and friends. This exemption does not extend to downloading or to copies made from “evidently unlawful public sources.”
  • In the US little to none of this private copying is presumed legal, and much of it is now subject—in law if rarely in practice—to high criminal penalties.
Here's one last piece from the study that may be the most important; pirating and copying is declining as streaming music use climbs. Why steal it when it's always at your fingertips?

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4 comments:

Puiu said...

If only artists could break free from the shackles that those money hungry labels put on them.
Most people know that if they buy something the artists get such a small portion of the money that it's not even worth it. Nobody lives off sales, except those who sell millions.
The fact that piracy is the best marketing tool has been known for a very long time. The labels dismiss it because it cuts into their profits, not the artists profits.

Anonymous said...

"The problem is that we all know somebody that's such a music freak that they have to either have the latest release or something that no one else is hip to yet, even if that means they have to download it illegally. Of course, kids with no money tend to steal music, but they wouldn't have bought it in the first place anyway."
-Very presumptuous and of poor taste Mr. Owsinski. I am an avid reader of your books. I found this blog reading Music 3.0,I own all the handbooks (2nd editions). I don't want to assume you intentionally chose to differentiate between two identical moral flaws using class as the variant. Very unpleasant find on my hunt for the great Bobby Owsinski.

Bobby Owsinski said...

The last thing I wanted to do is make a statement based on class, and I don't feel that I did. I never would have thought about class (and I don't ever think about it) unless you brought it up.

The point is that kids generally don't have a lot of money, but they love music and want to possess it any way they can. It's no different now than it was 50 years ago. I know we all did it when I was growing up, and it's no different today.

That said, it will all be a moot point soon as the music world changes to subscription streaming.

Anonymous said...

So true... Thanks for clearing that because I really dig your writing, and as of now, I only truely follow you, Bob Katz, and Glen Ballou regularly; I definitely don't want to lose one of the only three I cling to because I'm mentally irritated by doubts of their judgement. I totally agree with whay you said, and your alright with me. (better then alright since you didn't act like I never wrote anything..) By the way Music 3.0 has to be the most well rounded and insightful book on the music industry of today out at the time. Its the Irving Azoff/Live Nation of the new music business "all under one roof".

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