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Thursday, August 23, 2007

Record Industy Spin (or the Download Load)

posted by on August 23 at 8:51 AM

A new study about the at-large impact of music file sharing from the conservative Institute for Policy Innovation found that illegal downloads cost the U.S. economy $12.6 billion overall, kill 71,000 jobs, siphon $2.7 billion in workers’ earnings, and cost the government $422 million in tax revenue.

The study makes some basic mistakes, though.

1) It assumes that most downloads = a lost sale. I’d say most free downloads = somebody grabbing a song they wouldn’t have even considered adding to their music library if it hadn’t been free in the first place.

2) The study also misses the flip side: Illegal downloads lead to subsequent purchases. A recent recording industry study found that three out of four regular downloaders purchased music after tasting a sample.

3) The study also failed to adequately factor in the growing evidence that the music industry is stumbling in its own right—independently of file sharing.

The technology free love folks at ars technica are on the story.

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In other record industry news: Pink Floyd blows.

Posted by Mr. Poe | August 23, 2007 9:07 AM

Absolutely right... the free downloads I take from MP3 blogs like Stereogum are bands I am trying out and never intended to spend money on. Sites like that just encourage users to purchase. The internet has led to me spending more money on CDs than before.

Posted by Laurel | August 23, 2007 9:09 AM

Remember back in the 1940s, when the musicians went on strike because they were playing records "for free" on the radio? Yeah. Remember how that stopped music from ever appearing on the radio ever again?

Posted by Fnarf | August 23, 2007 9:11 AM

@2 - to be fair, I don't think most of those blogs are illegal downloads; this is more about bittorent full album downloads and such. Still, I think the point still stands, and they should quit their cryin' and try and figure out how to survive without suing their customers.

Posted by Levislade | August 23, 2007 9:13 AM

as long as our fave indie bands are paying rent w/ live show money people dont care about stealing record company $. i guess it's kind of an apathetic f*** you to record execs and stadium bands for charging us $17/cd and $100/ticket, respectively, for many a yr until p2p services came along.

Posted by mongo like slog | August 23, 2007 9:36 AM

In either the September Harper's (I think) there's a report on an actual study of pirate downloading vs. sales (involving German kids being in school and on vacation, for complicated reasons), and that study showed no significant real-world correlation between rates of downloading and music sales. One earth-shaking conclusion is that people without a lot of money to spend on music tend to take advantage of downloading.

Now I suppose for a conservative that's still morally theft, and if there's theft (here's the logical hitchstep), there must be loss of value.

Posted by MvB | August 23, 2007 9:39 AM

Poor Britney Spears, with illegal downloading she's had to settle for the Gulfstream II private jet instead of the much better Gulfstream III...

Posted by monkey | August 23, 2007 9:51 AM

I download free songs mostly from bands in the UK which are usually not out in the US, 99% of the time I buy the whole album because I got to listen to a few songs before the release date. I think it makes good promotion sense.

Posted by Nick | August 23, 2007 10:49 AM

I also think that artist know the advantages of leaking a track for promotion. ie: Yesterday a new Madonna song leaked and it was on almost every music site or blog I visited yesterday. I am sure her "peeps" did it.

Posted by Nick | August 23, 2007 10:53 AM

All of the serious downloaders I know never buy music. Perhaps they would never buy CDs even if downloading weren't available, but I doubt it.

Posted by keshmeshi | August 23, 2007 10:56 AM

Downloading has a number of perks. For instance, my cup of tea = movie scores. 70% of my collection consists of promotional copies. They aren't sold online, and if they are, there is a larger promo out there that has every sound clip from the motion picture. iTunes does not carry half of these, and finding a promotional copy of the score for We Don't Live Here Anymore is damn near impossible. So, I go to soulseek, type it in, and bam. I have it.

Same goes with GBV. Half of their stuff, the good stuff, is out of print. eBay offers nothing for me when it comes to odd copies of Demons and Painkillers, and even if it did, the money wouldn't be going to the record industry. Or the band.

I can't really say anything about downloading that hasn't already been said a million times before. So whatevs.

Posted by Mr. Poe | August 23, 2007 10:59 AM

I think one of the major issues is that most bands only seem to have 1 or 2 good songs on an album. You pay $17 for 2 songs? Yeesh. With iTunes, I download only the songs I want, and only pay a fraction of the cost. I suppose the record industry could count that as lost revenue, too, since I'm not also buying their "album filler" along with what I really wanted... but I stopped buying CDs because of this years ago. They wouldn't even be getting money from me for the one or two songs I like if not for iTunes.

Posted by Toby | August 23, 2007 11:15 AM

If the middle men at RIAA weren't trying to push music we don't want to buy at prices we won't pay, there wouldn't be a problem.

Posted by Will in Seattle | August 23, 2007 12:04 PM

Interesting study but i think you really hit the nail on the head with your 3 factors. But still, pretty tough to factor something like that into the equation.

Posted by rob | August 23, 2007 12:05 PM

Who ever promised the record industry that they would be in charge for eternity? Everytime I hear about them bitching about losing money I think about how I work my ass off to pay rent and keep my family fed. Their complaints hold no sway over me. Their time is over, and it has been since napster first came on the scene years and years ago.

Posted by move_it_by_bike | August 23, 2007 1:03 PM

"One earth-shaking conclusion is that people without a lot of money to spend on music tend to take advantage of downloading."

That's really pretty true there. Definitely goes in to be a sub-factor of the original point #1.

I don't particularly want to hear the moral argument about theft, or about how music isn't necessary, blah blah blah blah, if you're so poor, buy bread, yadda yadda, I do buy bread, hence why I can't afford CDs, etc. I'm just throwing this out here, not as defense, but as fact, but it's poor being an independant student. No parents/full time job to cover costs = downloaded music.

Posted by Me | August 23, 2007 9:54 PM

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