While the music industry desperately searches for ways to stem the tide of piracy that threatens to engulf it, new data from the BI Norwegian School of Management suggests that music pirates actually buy more music than others. A lot more.
When it comes to P2P, it seems that those who wave the pirate flag are the most click-happy on services like the iTunes Store and Amazon MP3. BI said that those who said they download illegal music for "free" bought 10 times as much legal music as those who never download music illegally.
How can this be explained?
I've written before that piracy is a great way to help the music industry gauge the tastes of its prospective customers and that there are a host of new adoption-based business models lurking in this rampant piracy.
But these perhaps explain solutions to the piracy problem. They don't explain why music thieves may purchase more music than others do.
One way to explain it is simply to acknowledge that piracy may precede purchase. People may be downloading songs in anticipation of buying those worth their 99 cents. In this way, most of the downloaded songs will never be followed by a click-to-purchase.
For me, the frequency of downloading songs off peer-to-peer service LimeWire has trickled to a halt over the years as Apple's iTunes library has expanded. At 99 cents, I can afford to squander money on songs that I may delete a few days later. But I'd prefer to listen to a full song before I buy it, if that were an option.
Yes, I know I can use services like Pandora and Last.fm (operated by CNET News publisher CBS Interactive), and, yes, I know that iTunes and Amazon.com offer brief preview clips, but this latter option is almost never a great way to evaluate music. It's too brief.
I doubt that many people deliberately want to steal music. They simply don't want to buy in inconvenient formats (who wants a physical CD?), or they don't want to pay for casual listening to music that they really don't like enough to buy. So the download becomes the equivalent of listening to music over the radio.
There are ways to monetize this casual interest, as I link to above. But the music industry is going to have to experiment to discover them. Ultimately, it's going to have to grapple with piracy as an opportunity, not a threat.
Follow me on Twitter @mjasay.
Ars Technica has the dirt on an admission from Vivendi CEO Jean-Bernard Levy: digital music downloads might not be evil, after all.
Just in case you don't know, Universal Music Group--one of the Big Four record labels--is a wholly owned subsidiary of Vivendi. So this is a big deal.
As Ars Technica reports, Universal's music business is up 3 percent, halting a long-term slide toward oblivion:
Digital, of course, is the big driver of better economic performance. At Warner, for instance, it made up 20 percent of total revenues in the second quarter and generated 39 percent more income that it had a year before. Universal notes that its growth is fueled, in part, by "the momentum of digital sales growth."
Imagine that. Studies have shown that peer-to-peer downloaders tend to pay more for music, but I think the larger trend is that many of us simply want easy ways to consume digital goods and that forcing us into an offline purchase was a losing strategy.
Apple has made it easy to buy music online and has an 85 percent market share as thanks.
Clay Shirky, a new media professor at New York University, recently noted that the music industry is the "skull on a pikestaff as a warning to others about how not to deal with the Internet." Finally, however, things may be changing.
The music industry now needs to continue its experimentation with digital downloads, making it ever easier to discover and consume online media. That's the future.
Victor Keegan asks a poignant question in The Guardian:
...[I]s there anything we can do to encourage the recent success of our creative industries - which now account for 7.3 percent of GDP [in the United Kingdom]... - or should we just lie back and let luck take its course? Creative industries - embracing Harry Potter, galleries, plays, advertising, publishing, television, computer games and so forth - are becoming vital for the growth of the economy with manufacturing in decline and the financial services industry suffering turbulence from which it may not fully recover.
Unfortunately, he largely comes to the wrong conclusions about how to bolster such creativity. Keegan argues that broadband and increased math and engineering emphasis in schools may well do the trick, but this is misguided.
The fastest road to a more vibrant creative class is to foster laws that protect people's native creativity. What sort of laws? Look at Silicon Valley.
... Read moreIt's ironic how different Europe can be from the United States. While the U.S. continues its mindless rampage against the future of digital distribution with DRM, RIAA, MPAA, and other acronyms designed to stuff the 21st century back into the 20th century's ideas of how to package and sell property, Europe is actually investing in that future. To be exact, it's putting $22 million toward peer-to-peer technology, in a BitTorrent-minded project called P2P-Next.
Surely European broadcasters are against the move, right? After all, research suggests that 50 percent of those using BitTorrent are doing so to steal TV shows. As one TorrentFreak blogger noted, however, European broadcasters believe this situation presents an opportunity rather than a threat:
One of the biggest names taking part is the BBC, who will use the new BitTorrent client to stream TV programs. Other partners in the P2P-Next project are the European Broadcasting Union, Lancaster University, Markenfilm, Pioneer Digital Design Centre Limited and VTT Technical Research Centre of Finland. The main goal is to develop an open source, BitTorrent-compatible client that supports live streaming.
... Read more
At least, that's what a recent study from Digital Music News and BigChampagne suggests. Why? Because 36.4% of the 1.66 million computers survey had LimeWire, a popular peer-to-peer (P2P) program installed. Guilty by association?
I have LimeWire installed on my Mac. This doesn't make me a thief. In fact, I've bought a wide range of music through iTunes over the past year. I think I've downloaded one or two songs and a few goal compilations using LimeWire in the past year when I couldn't find them on iTunes. The songs in question - by Led Zeppelin - I ended up buying (again, as I'd already bought them once or twice on CD and cassette tape) when they became available on iTunes.
So, 99.999% of the music I've listened to in the past year was happily bought through legitimate means. .001% was not. At least, not originally. Am I a thief? I suppose so. But not by any devious plan. I imagine that I'm not alone in how I consume music.
But maybe as a 30-something geezer, I'm atypical. Maybe everyone does want to steal music, as the music industry seems to believe. If this is the case, as Ars Technica writes, charging more per song does not sound like a winning resolution to the problem:
... Read more
Are peer-to-peer music thieves the music industry's best customers? In an ironic twist to the music industry's woes, a new study suggests that P2P downloaders may buy more music than their straight-laced, non-P2P brethren. The results are non-conclusive one way or the other, but the researchers conclude:
However, our analysis of the Canadian P2P file-sharing subpopulation suggests that there is a strong positive relationship between P2P file-sharing and CD purchasing. That is, among Canadians actually engaged in it, P2P file-sharing increases CD purchasing. ... Read more
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