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IFPI: P2P Does Not Increase Music Sales

IFPI: P2P Does Not Increase Music Sales

Responds to recent poll that found file-sharers spend an average of £75 ($123 USD) annually on music purchases versus £44 ($72 USD) for non-file-sharers.

The International Federation of the Phonographic Industry (IFPI) has responded to the recent Digital Music survey conducted for Demos, a UK-based think tank, and as usual it claims the net effect of illegal file-sharing has been to reduce legitimate music sales.

It says that all the survey showed is that there is an “overlap between those people who download music illegally and those who purchase music,” that music fans typically acquire music from a variety of sources, some legal and some not.

“The net effect of illegal file-sharing in the UK and elsewhere has been to reduce legitimate sales,” it adds. “This is why spending on recorded music has fallen every year since illegal file-sharing began to become widespread.”

This is true, consumer spending on recorded music is down 6% since 2007 alone, but it belies the fact that Will Page, the Chief Economist for PRS for Music, a UK-based royalty collecting group for music writers, composers, and publishers, published a study back in July concluding that total music industry revenues are up 4.7% over the same time period.

The money’s there for artists to earn a living it’s just taking different forms as the industry evolves from analog to digital.

I’d suggest that the biggest reason why recorded music sales are down is the fact that consumers can cherry pick their selections. A formerly $20 dollar physical album has been reduced to a single 99 cents digital track. That has to be frustrating for the music industry and really has no solution unless you want to raise prices and push people back into illegal file-sharing.

The IFPI cites numerous academic studies proving its point, though the most suspect is the 2007 British Phonographic Industry (BPI)-funded study that concluded online music piracy will cost the UK music industry £1.6 billion ($2.7 billion USD) between 2001 and 2012.

What the IFPI fails to mention is the numerous other independent studies that have concluded that file-sharing actually increases legal music consumption.

The first is the “The Impact of Music Downloads and P2P File-Sharing on the Purchase of Music: A Study For Industry Canada.” Commissioned by Industry Canada, a ministry of the Canadian federal government, back in 2007, it includes some of the most extensive surveying ever done on the music purchasing habits of the Canadian population.

Among the key findings:

  • For every 12 P2P downloaded songs, music purchases increase by 0.44 CDs.
  • About 50% of all P2P downloads were to preview before purchase or to avoid having to buy an entire CD.
  • Roughly 25% were downloaded because they weren’t available for purchase.

The most recent is the Consumer Culture in Times of Crisis,” conducted by the the BI Norwegian School of Management, the largest business school in Norway and the second largest in all of Europe, which found that illegal file-sharers purchase the most number of legal digital downloads, and that in fact actually buy 10 times as much music as they download for free

The study looked at almost 2,000 online music users over the age of 15, and asked file-sharers to prove their legal music purchases rather then simply rely on their honesty so it can’t be argued it was bogus.

But all of this won’t matter to the IFPI. It still thinks there are 7 million file-sharers in the UK despite reports that it could be as low as 3.9 million, hardly a problem in a country of 61 million people.

The IFPI has to toe the line and I wouldn’t expect anything less.

Stay tuned.

[email protected]

Jared Moya
I've been interested in P2P since the early, high-flying days of Napster and KaZaA. I believe that analog copyright laws are ill-suited to the digital age, and that art and culture shouldn't be subject to the whims of international entertainment industry conglomerates. Twitter | Google Plus
@TheHuxCapacitor
@TheHuxCapacitor

Hmmm, Couple of things for me - There's no causal relationship proven in the study between P2P and decline in sales. Also, the 80's/90's phenomenon of making millions from CD sales is merely a blip. Actually, just have a shufty at this video. [youtube ix4BHHWTdqA http://www.youtube.com/watch?v=ix4BHHWTdqA youtube]

D.AN
D.AN

malgre, we don't care about what you think, so we also don't need your life story in speculative form.

malcolm hume
malcolm hume

The times are getting shorter though, used to be forever before a video release and now it's a couple of months. So maybe someday you'll get what you want. Personally I don't care, becasue there's always something I missed and the only reason I want to see things first is because other people like to tell me what happens before I see it. But in the end I get all the entertainment I want, whether it's now or later, I get it all. maybe you guys could increase comment length? I know that was pretty long winded but jared you seem to be able to still post long responses.

malcolm hume
malcolm hume

The whole release schedule thing is annoying, but it helps them pay for the movies and minimize the risk. Most of the movies I seem to like (I like mainstream movies, not art stuff) seem to cost at least a hundred million dollars to make. That is a shit ton of money. So they stagger the releases so they can make as much at theater as they can, then dvd, then pay per view, and a lot of it has to do with how much of a cut they take home after each thing... a theatrical release gets all kids of promotion and people notice it more, direct to video never makes as much, etc.. So while I agree it's annoying I understand. They also don't want to piss off theater woners who are really important to their business, and video store owners etc, so blame them just as much. It's complicated. cont...

malcolm hume
malcolm hume

They're not trying to stop piracy altogether. They know there's a few people who will go to the trouble to do it no matter what. "The only people who get caught are the millions of lazy people who download and fire up old school DC apps like KaZaA" That's MOST of the music business - the people that only spend fifty or sixty dollars a year. Meanwhile, that money went to do two things - give new acts a chance to make it big by putting them in front of the publc in a big way and it also went to support weird artists that never made much money. Those are the two things that get cut out when the 'lazy people' don't buy music any more. cont...

Alex
Alex

Well, they are right, the survey in question doesn't really prove anything....it just suggests SOME SORT of link between file sharing and music sales. For all we know, that link could be that people who download lots of music are bigger music fans, and therefore are more likely to buy

soulxtc
soulxtc

Of course it's smaller, people don't purchase entire digital albums with as much as frequency as they did entire physical album purchases. The real crux of the data, and I'm not simply referring to the one the IFPI is refuting here, is that despite what the music industry says file-sharers do in fact purchase music, and that according to at least 2 VERY RELIABLE STUDIES (Canadian Govt, Europe's 2nd largest business school), conducted and funded by unbiased entities, they by in large PURCHASE MORE MUSIC than non-file-sharers. Why is the distinction so important? Because the IFPI and others would have people believe that one illegal download equals one lost sale. It's simply not true, and when you're talking about removing entire households from the Internet - the backbone of communication, education, and social interaction in the 21st century - the facts need to be clear. Instead of molding the Internet to meet it's business needs it instead needs to adapt. And the conversation about how to fight is silly from the start. For each technical measure to fight piracy there are at least a dozen ways to circumvent it. The only people who get caught are the millions of lazy people who download and fire up old school DC apps like KaZaA. Meanwhile, the rest of us file-sharers sit back behind VPNs, in darknets, or in Newsgroup obscurity, watching with amusement as copyright cartels bang their heads against the wall and never, ever stop to think that the best approach would be to give consumers what they want. For example, who the hell would watch a measly CAM copy of a new release if there were a direct, secure, pay-per-view option for the home? Say like $30 bucks and you could invite a few people over and watch on your living room TV. I'd definitely be a customer, and think of all the new revenue it produce. But it wont ever happen until the invisible hands of capitalism force it to. Thats why warping the Internet only harms consumers because in the end they never get the goods and services they really want.

soulxtc
soulxtc

Yes, if you read the actual report, it says that digital music sales alone are up 50%. Nobody buys a full album anymore, they buy digital singles. You're comparing a pre-1999 reality to a 2009 reality.

malcolm hume
malcolm hume

"total music industry revenues are up 4.7%" You realize that includes things like concessions sold at concert venues, right? Concert tickets were at an all time high last year, now we're seeing some of the lowest prices in decades. Try again. The correlary between p2p downloads and record sales is that the popular titles are downloaded more. Duh. These days Billboard gets it's panties in a knot when a record sells 30,000 units, record sales are half what they were in 2000. Do the math, in terms of the number of file sharers. If these studies indicated what you believe they do, then that would not be the case.

soulxtc
soulxtc

Actually no. See this > http://i64.photobucket.com/albums/h187/soulxtc/ip... (From http://www.zeropaid.com/news/10021/study_p2p_stil... In fact, in some places, like Eastern Europe for example, BitTorrent accounts for over 80% of overall P2P traffic! DC is only 17.9%. As for artists not getting chances, how about the Harvard study that found the number of albums produced since 2000 has doubled? http://www.zeropaid.com/news/86468/harvard-study-... Artists have the Internet to distribute their work if labels are scared.

D.AN
D.AN

"... it just suggests SOME SORT of link between file sharing and music sales." IFPI and related industries also suggest "SOME SORT of link between file sharing and music sales". So much for your ability to distinguish details. "... that people who download lots of music are bigger music fans, and therefore are more likely to buy" If that were to hold for all users, then there are effectively no losses of sales due to P2P, since those users would spend their money on music anyway, and the hysteria that the industries promote is nonexistent.

malcolm hume
malcolm hume

You should do some research about how little the digital market is compared to the whole pie.



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