First, Pollara has not been engaged by CRIA since 2006. Whoever is doing their market research now, if anyone, it’s not Pollara. I would suggest that any use of old research in 2009 and 2010 is dubious at best – market research, as it is reflective of public opinion, hasn’t got that long a shelf life in general – attitudes shift.

Second, having done research into the downloading issue for other clients in the past, I can tell you that downloading in of itself is not the issue.

Technology is an enabler, not an end in itself. What the downloading phenomena represented at it’s roots was a great disconnect between the industry’s customers and the record companies.

Simply put, consumers wanted choice and a service relationship – but the industry was determined to hang on to the CPG model. The public wanted choice in the sense of being able to pick what they buy, rather than being forced to take the whole package being thrust on them. They wanted a service relationship, in the sense of being able to buy what they wanted, where they want to buy it, delivered in the form they desire. In other words, they wanted to be able to not only buy tracks at home delivered to their computer, they wanted to be able to buy tracks at the cinema to their phone or iPod, or in a clothing store, or at a music kiosk in the mall. The industry ignored their customers – never a good business plan – and tried to hang on to the model of music as a consumer packaged good.

When your customers needs aren’t being met, yet technology enables them to meet those needs otherwise, the results are inevitable.

Ignore your customers needs long enough, and downloading will and did start to take out big revenue chunks. Again, it was adherence to the CPG model that caused this – downloading was simply a symptom and consequence of unmet consumer needs.

There is a significant body of market research from around the time downloading became a significant issue suggesting not only that downloaders were perfectly willing to pay, but also that dowloading to some extent promoted actual purchase of the tangible product. Again, all along, it was choice and service that drove downloading – not really being able to get tunes for free.

That the industry then chose to fight with it’s customers rather than address their needs merely exacerbated the problem. Perhaps they didn’t know any better, and in their desperation to hang on to that CPG model of selling music, they took the wrong route. Fighting with one’s customers has never been a successful strategy, in my experience.

What all this has to do with your topic of copyright laws, I admit, I’m not sure. Certainly, illegal downloading of copyright material is wrong. Certainly, notb all those doing so are criminals in any logical sense of the word. The industry is very much to blame here, because they ignored their customers needs knowing full well that a technological revolution was at hand that would enable their customers to satisfy their needs, with or without them.

There are a number of other factors that come into the decline of the music industry that I won’t go into in depth here – lack of iconic artists, the decline in the importance of music to the Playstation generation, the product itself declining in technical quality, the commoditization iof radio and prevalence of safe, computer generated playlists, the abandonment of and by the retail channel and others.

But what it all comes down to is an industry that ignored it’s customers and then started to fight with them, trying to hold on to a model that customers were saying no longer met their needs. Trying to force hamburgers on a group of vegetarians might work in a famine, but long term, just cannot be a successful marketing approach.

Robert Hutton
Executive Vice-President
Pollara Strategic Insights
Toronto, Ontario