[LINK] 'Music Piracy Collapse Fails to Boost Revenues'

[Roger Clarke]

[I haven't checked the article below against other sources.  But, if true, we can use it as support for the arguments many of us have pursued in the Internet context since at least the late 1990s.

[Notes at the end.]


Unprecedented Music Piracy Collapse Fails to Boost Revenues
Andy
26 January 2015
https://torrentfreak.com/unprecedented-music-piracy-collapse-fails-to-boost-revenues-150126/

A survey carried out by music industry group IFPI has revealed that just
4% of Norwegians under 30 are now using illegal file-sharing platforms to
obtain music, down from 70% in 2009. But while that achievement is
unprecedented, overall music industry revenues have remained static.

piracydownAfter years of effort and expenditure, in 2013 Norway introduced
new legislation to crack down on Internet piracy. It gave rightsholders
new powers to track down file-sharers and have sites blocked at the ISP
level.

To date and despite various threats not a single file-sharer has been
prosecuted. No sites - not even the Pirate Bay - have been blocked.
However, news coming out of Norway suggests that at least as far as the
music industry goes, those legislative weapons are now obsolete.

During December 2014 music industry group IFPI conducted a nationwide
survey among under 30-year-olds and discovered some amazing things about
the piracy landscape in Norway.

According to the survey results, just 4% of respondents are now using
illegal file-sharing platforms to obtain music. While that figure is
certainly impressive, MBW compares that finding with the results of a
similar 2009 IFPI survey which found that a huge 70% of the population
under 30 used those platforms to obtain music.

mbw-stats

The drop is certainly dramatic, especially when coupled with the fact that
less than 1% of respondents now cite file-sharing networks as their main
source of obtaining music. What is telling, however, is that IFPI Norway
chief Marte Thorsby did not connect the drop with anti-piracy measures.

"We are now offering services that are both better and more user-friendly
than illegal platforms. In [the past] five years, we have virtually
eliminated illegal file sharing in the music industry," Thorsby said.

The December survey also found that 80% of under 30-year-olds now use
streaming services as their main source of music.

"Younger audiences are using streaming services to the greatest extent.
When older audiences [start] embracing these services we will probably see
a somewhat different distribution of revenues," Thorsby told MBW.
"Hopefully this will also involve a better economy for several Norwegian
artists and record companies."

But while the drop in piracy will certainly be welcomed by the industry,
it appears young people fleeing file-sharing networks has done nothing to
boost revenues.

In 2009 revenues were NOK 592 million ($75.94m) yet by 2014 there had only
been a modest increase to NOK 601 million ($77.1m). That's just a 1.5%
uplift in five years, not accounting for inflation. Place that into the
equation and in real terms revenues are down.

That being said, that particular period witnessed a dramatic change in the
supply model, with physical giving way massively to digital purchases. In
2009 just 15% of content was supplied in digital format but by 2014 that
had reached 86%.

For IFPI to claim the virtual elimination of music piracy is certainly an
important if not unprecedented event but the take-home is simple. Provide
people with effective and engaging legal alternatives and piracy becomes
irrelevant.


[The analysis appears to overlook the vastly lower cost-profiles faced by publishers.  That's arisen from digital technology penetrating every aspect of recorded music production and reticulation, progressively from the 1980s onwards.

[The implications of this are that the revenue of the industry *should* have declined, because costs have dropped so much, and hence sale-prices have dropped as well, and growth in unit-consumption is limited by the annoying human incapacity to only listen to one source of music at a time.


[I was surprised to find that I've never expressed the argument in a paper.  I guess it was too obvious and banal to be worth putting into a journal or even a refereed conference.  One slide I found said:

        A More Constructive Approach

-   Identify customers' price resistance-point
    (by finding out 'what the market will bear')
-   Set prices accordingly
    (and thereby sustain payment morality)
-   Discourage and prosecute breaches
    where the purpose is commercial
-   Take no action over breaches by consumers
    (time-shifting, format-change, even sharing?)


-- 
Roger Clarke                                 http://www.rogerclarke.com/
			            
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Visiting Professor in the Faculty of Law            University of N.S.W.
Visiting Professor in Computer Science    Australian National University