Lean Left

P2P Like Radio?

by Kevin

March 18th, 2006

A Canadian music industry study has confirmed what most people have known anecdotally for some time: music filer sharing is both not a large source of lost income and can be a source for generating income:

• Consistent with many other studies, people who download music from P2P services frequently buy that same music. The study found that only 25% of respondents said they never bought music after listening to it as a P2P downloaded track. That obviously leaves nearly 75% as future purchasers, including 21% who have bought music ten times or more. Note that demographically, the lowest percentage of non-buyers actually belonged to the 13 to 17 year old demographic (page 70).
• The 13 to 17 year old demographic also happens to be the largest purchasing group of music, buying an average of 11.6 music CDs or DVDs in the past six months. Close behind are the 18 to 24 age group at 10.9 music CDs or DVDs. By comparison, the older demographics may not download much music but they don’t buy much either. The 55 - 64 age group bought 4.2 music CDs or DVDs, while the 65 and up age group bought 2.8 music CDs or DVDs (page 92).

Put aside the legal issues for a few moments and think about this entirely in business terms. If this report is true — and it does support years of anecdotal evidence — then music file sharing is most often used as a form of radio. And that means that it is a good means of driving people into stores. It gives father customers a way to sample new music that they otherwise would not have heard and thus not have purchased. It is the best kind of advertising: free. As such, the record industry would be foolish to attempt to shut it down. Even worse, from the RIAA’s standpoint, is that people who use file sharing networks in a radio-like fashion don’t think they are doing anything wrong. Radio is free to them, after all, and they listen to and record from it just like they do from their file sharing applications. Cracks downs by the music industry seem unfair to these people, alienating the people most likely to purchase after they have sampled. Ignoring file sharing, whatever the legal issues, seems to be good business.

But the RIAA has attacked file sharing with all the intensity of a celebrity stalker. They have gone after children and poor people and grandparents. They are unrelenting in their contention that file sharing is destroying the music industry. It is their answer to all every question about revenue declines. Which is probably the reason they continue to attack it so fervently. The music industry does have problems. Some of them are out of their control: we live in a society with many more entertainment options than in the recent past and the economy has not been good in terms of purchasing power for the majority of Americans for half a decade now. Many of their problems, however, are entirely of their own making.

The industry is much more consolidated now that at perhaps anytime in its history. As a result, they all seem to be searching for mega-hits to justify their debt or their expenditures. that has lead to a reliance on copycat acts, a refusal to nurture talent, and middle of the road play list that is as bland, boring, and uninspiring as anytime in my life. A large reason that sales are down is that there is precious little worth buying. But admitting that would be admitting that people inside the music industry were to blame and that the industry would have to change the way it does things. That is not something that goes down well n large corporations.

And so the RIAA will continue to attack a powerful tool for advertising its products, will continue to alienate the people most likely to purchase new music, will continue to watch their sales decline, and will continue to blame anyone and anything other than their own behavior.

Categories: Legal Issues, Media |