Filesharing

[EasySkankin]

1. File sharing is not to blame for the majority of the losses the large record companies are experiencing.
http://www.unc.edu/~cigar/papers/FileSharing_March2004.pdf (http://www.unc.edu/%7Ecigar/papers/FileSharing_March2004.pdf)
There is tremendous interest in understanding the economic effects of file sharing. As
file sharing becomes easier and faster, a greater variety of information goods, including
movies and software, are likely to be downloaded. The effects of such downloads are
likely to parallel the experience to date with sales of recorded music. According to the
RIAA (2002), the number of CD’s shipped in the U.S. fell from 940 million to 800
million--or 15%--between 2000 and 2002 (though shipments continued to rise during the
first two years of popular file sharing, 1999-2000). The record industry has claimed this
decline is due to file sharing.

Such causality, however, is unclear. While file sharing significantly reduces the financial
cost of obtaining music, it has an ambiguous theoretical effect on record sales.
Participants could substitute downloads for legal purchases, thus reducing sales.
Alternatively, file sharing allows users to learn about music they would not otherwise be
exposed to. In the file sharing community, it is a common practice to browse the files of
other users and to discuss music in file server chat rooms. This learning may promote
new sales. Other mechanisms have ambiguous effects. Individuals may use file sharing
to sample music, which will increase or decrease sales depending on whether they like
what they hear. The availability of file sharing could change the willingness to pay for
music, either decreasing it (due to the ever present option of downloading) or increasing
it because music tracks have gained a new use, sharing with others. Finally, it is possible
there is no effect on sales. File sharing lowers the price of music, which draws in low valuation
individuals who would otherwise not have purchased albums. That is, file
sharing primarily serves to increase total music consumption.

...

We find that file sharing has no statistically significant effect on purchases of the average
album in our sample. Moreover, the estimates are of rather modest size when compared
to the drastic reduction in sales in the music industry. At most, file sharing can explain a
tiny fraction of this decline. This result is plausible given that movies, software, and
video games are actively downloaded, and yet these industries have continued to grow
since the advent of file sharing. While a full explanation for the recent decline in record
sales are beyond the scope of this analysis, several plausible candidates exist. These
alternative factors include poor macroeconomic conditions, a reduction in the number of
album releases, growing competition from other forms of entertainment such as video
games and DVDs (video game graphics have improved and the price of DVD players or
movies have sharply fallen), a reduction in music variety stemming from the large
consolidation in radio along with the rise of independent promoter fees to gain airplay,
and possibly a consumer backlash against record industry tactics.26 It is also important to
note that a similar drop in record sales occurred in the late 1970s and early 1980s, and
that record sales in the 1990s may have been abnormally high as individuals replaced
older formats with CDs (Liebowitz, 2003).


http://www.guardian.co.uk/news/datablog/2009/jun/09/games-dvd-music-downloads-piracy
Why does the music industry persist in saying that every download is a lost sale? If you even think about it, it can't be true. People - even downloaders - only have a finite amount of money. In times gone by, sure, they would have been buying vinyl albums. But if you stopped them downloading, would they troop out to the shops and buy those songs?I don't think so. I suspect they're doing something different. I think they're spending the money on something else.
What else, I mused, might they be buying? Hmm... young.. like the entertainment industry... ah, how about computer games (http://www.guardian.co.uk/technology/games) and DVDs? Thus began a hunt for the figures for UK sales of games and of DVDs and of music to see if there was any consistent relationship between them. And since this was about filesharing, it seemed sensible to analyse it since 1999 - when Napster started and blew up the CD business model.


http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2009/6/9/1244556652985/games-music-dvds.png



2. File Sharing has given opportunities for lesser-known artists
http://www.katallaxi.se/grejer/blackburn/blackburn_fs.pdf
Further inspection, however, reveals that it is unrealistic to believe that the effects of
file sharing are constant across all artists as the costs and benefits of file sharing differ with
the ex ante popularity of the artist. This suggest that ex ante unknown artists are likely to
see more positive overall effects of file sharing than ex ante popular artists are. By adopting
an estimation procedure which allows for the effect to vary according to measures of artist
popularity, I find that file sharing has had strong effects on the sales of music. In particular,
new artists and ex ante relatively unknown artists are seen to benefit from the existence of
their songs on file sharing networks, while ex ante popular artists suffer for it.

...

Furthermore, the differential effect of file sharing on the sales of artists of different
levels of ex ante popularity has led to a dramatic shift in the distribution of sales among
artists, as new and less popular artists are now selling more records while star artists have
seen their sales shrink, compacting the distribution of outcomes. It remains an open ques-
tion, left for future work, what effect this distributional change has had or will have on the
investment in new talent and the distribution of returns to that talent in the recorded music
industry.
http://www.nytimes.com/2005/12/28/arts/28iht-record.html
Even as the recording industry staggers through another year of declining sales overall, there are new signs that a democratization of music made possible by the Internet is shifting the industry's balance of power.
Exploiting online message boards, music blogs and social networks, independent music companies are making big advances at the expense of the four global music conglomerates, whose established business model of blockbuster hits promoted through radio airplay now looks increasingly outdated.
...
[Dozens] of independent labels are faring well with steady-selling releases by, among others, the Miami rapper Pitbull and the indie bands Hawthorne Heights, Bright Eyes, Interpol and the Arcade Fire. Independent labels have accounted for more than 18 percent of album sales this year [today, this figure is estimated as high as 30%]- their biggest share of the market in at least five years, according to Nielsen SoundScan data. (If several big independent companies whose music is marketed by the major music labels distribution units are included, the figure exceeds 27 percent.)


http://www.csmonitor.com/2003/0411/p13s02-almp.html

While executives at those labels wail about the industry's imminent collapse, indie labels and artists are singing a much happier tune. Profits are up - in some cases by 50 to 100 percent. That's in contrast to overall album sales, which dropped about 11 percent in 2002.
...
You won't hear many of these labels' artists on pop radio - and ironically, that's one of the secrets to their success. By avoiding the major expenses associated with getting a tune on the air - which can cost upwards of $400,000 or $500,000 per song - independent labels are able to turn a profit far more quickly, and share more of those profits with their artists. Another secret of their success is that the labels target consumers - namely, adults - who are still willing to pay for their music, rather than download it for free.



3. The industry is not dead, it's just changing.

-------Digital vs. Hard Copy
(This is painfully obvious so allow me to save space on this one)

-------Single vs. Album
http://images.fastcompany.com/upload/tom2.jpg
http://www.nytimes.com/2007/03/26/business/media/26music.html?_r=2

“I think the album is going to die,” said Aram Sinnreich, managing partner at Radar Research, a media consulting firm based in Los Angeles. “Consumers are listening to play lists,” or mixes of single songs from an assortment of different artists. “Consumers who have had iPods since they were in the single digits are going to increasingly gravitate toward artists who embrace that.”

...
Many music executives dispute the idea that the album will disappear. In particular, they say, fans of jazz, classical, opera and certain rock (bands like Radiohead and Tool) will demand album-length listening experiences for many years to come. But for other genres — including some strains of pop music, rap, R&B and much of country — where sales success is seen as closely tied to radio air play of singles, the album may be entering its twilight.
...
A decade ago, the music industry had all but stopped selling music in individual units. But now, four years after Apple introduced its iTunes service — selling singles for 99 cents apiece and full albums typically for $9.99 — individual songs account for roughly two-thirds of all music sales volume in the United States. And that does not count purchases of music in other, bite-size forms like ring tones, which have sold more than 54 million units so far this year, according to Nielsen data.

-------Rising profitability of live events
http://mortimer.fas.harvard.edu/concerts_01oct2010.pdf
We find evidence consistent with illegitimate redistribution of digital goods increasing revenue from non-digital complementary products. As with the earlier literature, we find that
sales of recorded music declined precipitously with the entry of Napster and large-scale file-
sharing. While file-sharing may have substantially displaced album sales, it also facilitated a
broader distribution of music, which appears to have expanded awareness of smaller artists
and increased demand for their live concert performances. Concert revenues for large artists,
however, appear to have been largely unaffected by file-sharing. Music for large artists was
likely widely available prior to file-sharing, and as a result it is not surprising that demand
for those artists' concerts would have been largely unaffected by file-sharing. Similarly, the
decline in album sales is much more pronounced for large artists than for small artists. Again,
for small artists, file-sharing may have increased awareness of their music and encouraged
some additional album sales from a larger fan base even as it displaced album sales to others.http://exploremusic.com/wp-content/uploads/2010/12/Album-sales-vs-concerts.jpg

[DanTGD]

Well fuck me.

Interesting read.

[re7ard1337]

Everything I know about the music industry I learned from Thom Yorke.

[spiffa0]

Interesting but pretty outdated. The results would probably be pretty similar though

[joeag1985]

I've believed in those three points for a long time. Always nice to see some academic evidence to back it up.

[EasySkankin]

Interesting but pretty outdated. The results would probably be pretty similar though
Yeah, when it comes to the studies I wish more recent stuff was done, but by 04-05 napster had already rocked the industry. The more recent stats tend to suggest the trend is just continuing, especially with the indie labels and concerts.

[brook183]

excellent stuff here. i wrote a paper on this topic but i didnt have statistical evidence like this. this would have been very helpful, as it perfectly proves my points

[writethefuture]

i'm doing a research-based paper and i had chosen a topic about filesharing being legal, but i couldn't find any information that was useful. then i randomly came across this and...wow. how oddly convenient.

[saysmydoctor]

I hope Jason posts in here.

[armoireofdoom]

DBM2 leaked.

[Jake Gyllenhaal]

I stopped file sharing back in 2006. Nowadays, I rarely purchase music. It's all about free podcasts that occupy my time.

[Sean Rizzo]

I'm definitely glad to hear that the way people buy music is changing rather than illegal file sharing being to blame, although I still don't support illegal file sharing.

[ramomcferno]

Subscribing to read later.

[bandnamexmyname]

This was interesting. So, then, is the sole factor for the downfall of the record industry the worldwide economic fiasco?

[Jake Gyllenhaal]

This was interesting. So, then, is the sole factor for the downfall of the record industry the worldwide economic fiasco?

No, it's the lack of quality musicians (at least those financed by labels with money to promote)

[SoundwaveUproar]

i'm doing a research-based paper and i had chosen a topic about filesharing being legal, but i couldn't find any information that was useful. then i randomly came across this and...wow. how oddly convenient.

I just did a paper on this too. What won my teacher over was what I reported about Radiohead's In Rainbow and this Fleet Foxes interview http://news.bbc.co.uk/2/hi/entertainment/8097324.stm


of course I looked for hours only to find a quarter of what the OP posted -_-

[plyb]

This was interesting. So, then, is the sole factor for the downfall of the record industry the worldwide economic fiasco?

No, it's the lack of quality musicians (at least those financed by labels with money to promote)
I'd say maybe a little of that, but I believe its more of a slow change of taste in this generations media preferences.

With games, movies, tv ect, Music is being drowned out.

[W/O a Parachute]

Subscribing to read later.

same

[Jake Gyllenhaal]

I'd say maybe a little of that, but I believe its more of a slow change of taste in this generations media preferences.

With games, movies, tv ect, Music is being drowned out.

The same could be said for 10 or 20 years ago.

[shawnPLAGUES]

Seems like a very interesting read. Will thoroughly read it soon.

[domotime2]

I buy music from bands that I support. that's all i can do. yay stats!

[plyb]

The same could be said for 10 or 20 years ago.
Not really... First off the game industry is much larger than 20 or even 10 years ago. (10 years ago is around when everything starting going down hill for music anyways). Also, i think you cant ignore the emergence of casual games.

TV & Movies though had a different revolution of sorts though. Both have become more accessible, through first things like On Demand and TiVo and now with things like Netflix and Hulu.

If peoples TV, Movie and game consumption all rise, it stands to reason time spent on other forms of media such as music will drop.

[derekrvr]

God. This was really eye-opening.
I mean, I do exactly what it says. I will listen to an album, and judge whether It's good enough to spend my (very little) money on it. I still buy music, and I listen ot the music on myspace or youtube before buying.

[crackedthesky]

I'm going to play devil's advocate, here. I have a few questions and comments about this. Don't necessarily take what I say here to be my personal opinion on the issue; I'm just responding to this info as it's presented. Most of my qualms lie with the first claim, here, especially the "downloads don't equal lost sales" claim.

1. File sharing is not to blame for the majority of the losses the large record companies are experiencing.
http://www.unc.edu/~cigar/papers/FileSharing_March2004.pdf

http://www.guardian.co.uk/news/datablog/2009/jun/09/games-dvd-music-downloads-piracy



I find this particular part of that article interesting:


We find that file sharing has no statistically significant effect on purchases of the average
album in our sample. Moreover, the estimates are of rather modest size when compared
to the drastic reduction in sales in the music industry.

This quite literally says "downloading has no effect on sales" and then immediately after says "The record industry is suffering a drastic decline in sales." That seems a bit odd, to me. Why is the record industry suffering that decline? Could it be because of downloads? They basically say that the music industry is hemorrhaging money, but not because of downloads, it's because of some source they don't care to mention. Hm. It even says that all other entertainment mediums are booming. The difference would be that not many people pirate video games, but almost everybody pirates music.
The one flaw I've found with my theory is that the movie industry is booming, and movie piracy is almost as big as music piracy. Still, seems a bit interesting, and the "candidates" they give for the music industry taking a hit are, frankly, stupid. Less people are making music? Please.


As for the graph, it's entirely irrelevant. Their point is basically "look, entertainment sales are actually up!" But if you actually look at the chart, the music portion is way down. The record industry doesn't make money off of movie sales, video game sales, or movie rentals, so saying the record industry is doing better because the film industry is doing better is just incorrect. The graph shows the music industry consistently shrinking in the years since Napster, but they're claiming this graph somehow shows that there's no connection between downloads and sales based on other mediums doing better? That's nonsense. Of course music piracy doesn't hurt DVD rentals. I don't even know what they were thinking when they put that graph together. In fact, the constant growth shown by that chart owes almost entirely to video games and, to a lesser extent, dvd sales. While people might have more money to spend on games because they aren't spending it on music, that is in no way not "lost sales" for the music industry. They aren't making the money spent on those video games.




2. File Sharing has given opportunities for lesser-known artists
http://www.katallaxi.se/grejer/blackburn/blackburn_fs.pdf

http://www.nytimes.com/2005/12/28/arts/28iht-record.html


http://www.csmonitor.com/2003/0411/p13s02-almp.html


I have no complaints with this part. Seems logical, perhaps obvious when you think about it.



3. The industry is not dead, it's just changing.

-------Digital vs. Hard Copy
(This is painfully obvious so allow me to save space on this one)

-------Single vs. Album
http://images.fastcompany.com/upload/tom2.jpg
http://www.nytimes.com/2007/03/26/business/media/26music.html?_r=2



I definitely see what this is saying. I don't like it for personal reasons, but it's true. It'll also probably increase, now that companies are charging $1.29 for singles. I can see that price going up. Meanwhile, the price of full albums is more or less staying the same (most albums are still $9.99). This seems like it'll further the divide between singles and albums, but only to a certain point. At some point, if the price of singles continues to rise, it'll become more efficient to buy the whole record than just one or two singles. That is, until the price of records also starts going up.



-------Rising profitability of live events
http://mortimer.fas.harvard.edu/concerts_01oct2010.pdf



Whole-heartedly agree with this one.

[kyle is hk]

While executives at those labels wail about the industry's imminent collapse, indie labels and artists are singing a much happier tune. Profits are up - in some cases by 50 to 100 percent. That's in contrast to overall album sales, which dropped about 11 percent in 2002.

The most important part in all of this. Even if you want to blame file sharing for the demise of major labels, its HELPING indie labels. The "overall" decline in the music industry is only because the major labels make up a much larger share than indie ones, thus a net loss.

Im very comfortable with the likes of Atlantic failing and the likes of Merge or 4AD thriving.

[cshadows2887]

All the talk about it helping smaller artists is really one-sided. It does increase the exposure, but it also makes it harder for a lot of these bands to be financially solvent.

And almost all of those things you quoted say that there's been a colossal drop in album sales since the rise of illegal downloading but then say they can't prove downloading is the reason. If it walks like a duck...

[kyle is hk]

And almost all of those things you quoted say that there's been a colossal drop in album sales since the rise of illegal downloading but then say they can't prove downloading is the reason. If it walks like a duck...


I'd likely agree with you that the illegal downloading has to be the cause of declined sales overall, but what about the fact that Independent labels are doing better? I think the advent illegal downloading cripples the type of music major labels put out. The audience that listens to major labels' music (for the most part) is doesn't listen to music in the same way people like us do. They're not interested in getting a whole album. They just want individual pop songs to populate a nice playlist.

[cshadows2887]

I'd likely agree with you that the illegal downloading has to be the cause of declined sales overall, but what about the fact that Independent labels are doing better? I think the advent illegal downloading cripples the type of music major labels put out. The audience that listens to major labels' music (for the most part) is doesn't listen to music in the same way people like us do. They're not interested in getting a whole album. They just want individual pop songs to populate a nice playlist.

Except that pop stars still do pretty well. I guarantee you 80% of what went gold and platinum last year was major label, and primarily pop, R&B, and country.

And indie labels are doing better, but they don't mention that they'd probably be significantly more successful if people paid for music.

[crackedthesky]

I'd likely agree with you that the illegal downloading has to be the cause of declined sales overall, but what about the fact that Independent labels are doing better? I think the advent illegal downloading cripples the type of music major labels put out. The audience that listens to major labels' music (for the most part) is doesn't listen to music in the same way people like us do. They're not interested in getting a whole album. They just want individual pop songs to populate a nice playlist.

This almost sounds like you're making it an argument of quality, rather than quantity. In any case, even if independent labels are doing better, the market overall is suffering. The boost the independent labels are getting is much smaller than the decline seen by the market overall. Not to mention, there's really no way to prove that downloading is the cause for the independent boost. It might just be that fans know their independent bands need the money more than, say, Green Day does, so they're more willing to buy it whether they've downloaded it first or not.

[jawstheme]

All the talk about it helping smaller artists is really one-sided. It does increase the exposure, but it also makes it harder for a lot of these bands to be financially solvent.

And almost all of those things you quoted say that there's been a colossal drop in album sales since the rise of illegal downloading but then say they can't prove downloading is the reason. If it walks like a duck...

Do small bands really make money from record sales? If a band tours and people go to see the shows then they should do fine. If a band tours and people aren't paying to see them, they probably wouldn't have bought their music anyway.

[crackedthesky]

Do small bands really make money from record sales? If a band tours and people go to see the shows then they should do fine. If a band tours and people aren't paying to see them, they probably wouldn't have bought their music anyway.

There are too many "reallys", "shoulds", and "probablys" here for me to justify downloading the music.

[jawstheme]

There are too many "reallys", "shoulds", and "probablys" here for me to justify downloading the music.

There's 1 of each and you have them all quoted plural...

But I get your point.

[kyle is hk]

Except that pop stars still do pretty well. I guarantee you 80% of what went gold and platinum last year was major label, and primarily pop, R&B, and country.

It definitely was. But thats not the point. The point is that those "80%" did much worse than the "80%" from 7 years ago.

And indie labels are doing better, but they don't mention that they'd probably be significantly more successful if people paid for music.
No because if people had to pay for the music they would never check it out. Music on big labels benefits from exposure on the radio. I remember being 10 and hearing a cool song on the radio and going out and buying the whole album because that was the only way to do it. But the artists on indie labels arent on the radio, and dont have that exposure. File sharing provides them with that. Plus you can easily argue major labels did themselves in by allowing songs to be purchased one at a time. Now if 10 year old Kyle heard a song on the radio and loved it, he'd go and buy that single song, not the whole album. Thats a huge loss in revenue for the label.



This almost sounds like you're making it an argument of quality, rather than quantity. In any case, even if independent labels are doing better, the market overall is suffering.The boost the independent labels are getting is much smaller than the decline seen by the market overall.

But like I said before, the only reason it appears the market "overall" is suffering is because major labels are a much larger % of the business than indie ones. Its math.

Not to mention, there's really no way to prove that downloading is the cause for the independent boost. It might just be that fans know their independent bands need the money more than, say, Green Day does, so they're more willing to buy it whether they've downloaded it first or not.
Lets look at it this way. We've had this conversation a lot so I know you're someone who never pirates music, only buys it. Im someone who pirates stuff alllll the time. I would guarantee that I've spent more money on music in the last few years than you have, just from having so many more bands in my repertoire. This comes from a variety of things, buying merch, vinyl, seeing shows. Im likely to spend more money on music if a listen to 100 bands than if I did the 10 I could afford.

If I were an artist and had to chose between 20 people buying my album and only 5 people buying it with 100 people pirating it, I'd chose the latter because although its a less beneficial in the short term, in the long term itll be better because Ive gained more fans

[cshadows2887]

Do small bands really make money from record sales? If a band tours and people go to see the shows then they should do fine. If a band tours and people aren't paying to see them, they probably wouldn't have bought their music anyway.

In theory, it's a decent idea. But I say this all the time: do you go see EVERY band you like EVERY time they come through town. Do you "buy a shirt" at every single show they play? If you already have their CD and their shirt, do you buy it again so you can support them at that show? Odds are the answer is no. Plenty of people download a shit ton of music and have no intention of "paying the bands back" by going to see them live. They just feel entitled to it.

It definitely was. But thats not the point. The point is that those "80%" did much worse than the "80%" from 7 years ago.

No because if people had to pay for the music they would never check it out. Music on big labels benefits from exposure on the radio. I remember being 10 and hearing a cool song on the radio and going out and buying the whole album because that was the only way to do it. But the artists on indie labels arent on the radio, and dont have that exposure. File sharing provides them with that. Plus you can easily argue major labels did themselves in by allowing songs to be purchased one at a time. Now if 10 year old Kyle heard a song on the radio and loved it, he'd go and buy that single song, not the whole album. Thats a huge loss in revenue for the label.

With so many inexpensive (often free) streaming sources, there's no excuse for that. Or even if you d/l it to check it out. You should still BUY it once you've decided if you like it. You can build up a fanbase through downloading, sure. But if that doesn't turn into financial support, you won't have much of a career.

[kyle is hk]

I honestly believe the advent of not having to buy the whole album to get that one song you liked it was killed the "music industry" and that fee easy file sharing is the greatest thing to happen to music since that invention of the recording device.

[kyle is hk]

With so many inexpensive (often free) streaming sources, there's no excuse for that. Or even if you d/l it to check it out. You should still BUY it once you've decided if you like it. You can build up a fanbase through downloading, sure.

Yeah but streaming means you still have to buy it once you decide you like it, unless you're only going to listen to music on the computer

But if that doesn't turn into financial support, you won't have much of a career.

This ignores my previous point i made to david. In the long run it does, if the music is good.

[kyle is hk]

In theory, it's a decent idea. But I say this all the time: do you go see EVERY band you like EVERY time they come through town. Do you "buy a shirt" at every single show they play? If you already have their CD and their shirt, do you buy it again so you can support them at that show? Odds are the answer is no. Plenty of people download a shit ton of music and have no intention of "paying the bands back" by going to see them live. They just feel entitled to it.


You're completely right in this. But, you cant dismiss that fact that many do. In this case its a statistics game. Say you can only purchase yuor music, and only 100 people spend the money on it. Then say you introduce file sharing as an option and lets say 1000 people download it for free. Even if 80% of people are selfish like you say, that still leaves 20% of the people who in teh future spend money on your band. Thats works out to more than you would have made had you only sold those 100. Obviously these numbers are many up, but its the point that matters

[cshadows2887]

I honestly believe the advent of not having to buy the whole album to get that one song you liked it was killed the "music industry" and that fee easy file sharing is the greatest thing to happen to music since that invention of the recording device.

Singles have been around since the 50's.

Yeah but streaming means you still have to buy it once you decide you like it, unless you're only going to listen to music on the computer

This ignores my previous point i made to david. In the long run it does, if the music is good.

Exactly. But don't give me the excuse of "you're just buying things blind." It's very easy to find out if you like something before purchasing.

And that's horseshit. "If the music is good" is the biggest cop-out I've ever heard. Plenty of "good" bands are breaking up every year because all the people downloading and loving their music aren't supporting them sufficiently for them to not have to quit and get day jobs.

[crackedthesky]

There's 1 of each and you have them all quoted plural...

But I get your point.

Yeah, it was grammatically incorrect otherwise and it bugged me, haha.


But like I said before, the only reason it appears the market "overall" is suffering is because major labels are a much larger % of the business than indie ones. Its math.


Right. But the market is still doing poorly overall, either way. So again, it becomes an issue of quality, basically, "Who would you rather have making money, big labels or small ones?", but in a perfect world, that's a false dilemma. If everybody paid for music, both would be making the money. Obviously the world isn't perfect, but then it becomes a question of "do I give in and download, or do I do my part and pay for music?" Which then leads to this:


Lets look at it this way. We've had this conversation a lot so I know you're someone who never pirates music, only buys it. Im someone who pirates stuff alllll the time. I would guarantee that I've spent more money on music in the last few years than you have, just from having so many more bands in my repertoire. This comes from a variety of things, buying merch, vinyl, seeing shows. Im likely to spend more money on music if a listen to 100 bands than if I did the 10 I could afford.


This is a good point, and definitely true right now. However, a large part of that is because I'm unemployed, my books aren't making me money (YET, hopefully, haha) but if I had money, I'd be buying more music.
Your second point is also an interestig variable in the equation. It doesn't really apply to me personally (because there's very little that I listen to these days, and I've never really gone to shows) but for the average person, it holds true. However, it could also be another false dilemma; downloading music might make them listen to 100 bands rather than 10, but does that make it morally right? Imagine how much more they'd be making if you did pay for those 100 albums? You can make the argument that you can't afford it, might even be correct about it (I don't think I could ever afford all of the music I'd ever want, in my entire life) but that doesn't change the fact that you're taking something without paying for it, so, in my eyes, doesn't make it morally right. Basically, it's a justification. "I could buy those albums, but if I don't, I'll have more bands to go see live." Well, seeing a show runs between $20 and $60, give or take. So I doubt you're actually seeing those 100 bands live, and if you are, you should be able to afford to buy their albums. You might be listening to 100 bands rather than 10, but there's no way you're seeing them all live. Basically, you're putting more money into the overall market, but that doesn't mean the bands you're actually listening to will all see a profit, and the ones who don't are losing money on the downloads.

In essence, the argument is that by downloading, you're more likely to spend more money on them. But you're definitely not paying for their music. So you're trading a definite negative for a possible positive. In my opinion, that doesn't equal out, so it isn't a good justification.


If I were an artist and had to chose between 20 people buying my album and only 5 people buying it with 100 people pirating it, I'd chose the latter because although its a less beneficial in the short term, in the long term itll be better because Ive gained more fans

This would be true, if those fans were definitely buying merch or going to shows, which, like I said, isn't the case. There are bands who would rather have the fans even if they never see money off of it, but that's a hard variable to gauge. And in that situation, it still comes down to morality; I still have moral issues downloading. It's still stealing. Not only that, but the band might be fine with you downloading the music, but that doesn't mean everybody else involved in the production of that record is. The label is distributing the record, and they're getting no money for it. Somebody is producing the record, someone is making the artwork, someone is engineering it, someone is putting up the gear to record it. By downloading the music, you aren't just taking money from the artist, you're taking it from all of these people. The artist might be fine with people downloading, especially since they make so little money off the record sales, but the reason they make so little is because they aren't the only ones getting the record out there. We could have a different argument about how the record sale is distributed, but it doesn't change the fact that people are doing work and by downloading, you're making sure they don't get paid for it. Even if you go see the band live, the people behind the scenes putting that record together won't see that money, they're taking a hit with no means of recuperating from it, even if you go to shows or buy the merch.

[cshadows2887]

You're completely right in this. But, you cant dismiss that fact that many do. In this case its a statistics game. Say you can only purchase yuor music, and only 100 people spend the money on it. Then say you introduce file sharing as an option and lets say 1000 people download it for free. Even if 80% of people are selfish like you say, that still leaves 20% of the people who in teh future spend money on your band. Thats works out to more than you would have made had you only sold those 100. Obviously these numbers are many up, but its the point that matters

And I'd say look at the results. Have you been watching the new posts? Notice how many bands are breaking up? Notice how there are fewer small-and-medium sized tours coming around? Because this model isn't financially sound for these bands.

[kyle is hk]

Singles have been around since the 50's.

http://images.fastcompany.com/upload/tom2.jpg



Exactly. But don't give me the excuse of "you're just buying things blind." It's very easy to find out if you like something before purchasing.

And that's horseshit. "If the music is good" is the biggest cop-out I've ever heard. Plenty of "good" bands are breaking up every year because all the people downloading and loving their music aren't supporting them sufficiently for them to not have to quit and get day jobs.


We've had this convo at least once before, so I think we both know we're not going to change each others minds. Butyoure a musician, if you had the option between A) Selling 50 records or B) Selling 15 records and giving away 300 for free, youre telling me you'd really chose A?

[crackedthesky]

I honestly believe the advent of not having to buy the whole album to get that one song you liked it was killed the "music industry" and that fee easy file sharing is the greatest thing to happen to music since that invention of the recording device.

Except that now albums very very rarely reach even platinum status, and the industry has been on a steady decline since Napster came around.

[kyle is hk]

And I'd say look at the results. Have you been watching the new posts? Notice how many bands are breaking up? Notice how there are fewer small-and-medium sized tours coming around? Because this model isn't financially sound for these bands.

But then I could easily say they would have never even gotten to that pointof being a notable, known band in the first place without illegal downloading.

[cshadows2887]

We've had this convo at least once before, so I think we both know we're not going to change each others minds. Butyoure a musician, if you had the option between A) Selling 50 records or B) Selling 15 records and giving away 300 for free, youre telling me you'd really chose A?

I'm telling you I shouldn't have to choose.

[crackedthesky]

But then I could easily say they would have never even gotten to that pointof being a notable, known band in the first place without illegal downloading.

You could, but with most bands, you have no way of knowing that or of accurately measuring it. There are bands like Defiance, Ohio and Bomb the Music Industry! who give their records away for free, legally, but they aren't exploding into popularity, are they? Downloading might make a band more successful, or it might not. The only constant is that either way, someone is losing money. Again, you're trading a possible positive for a definite negative.

[kyle is hk]

Except that now albums very very rarely reach even platinum status, and the industry has been on a steady decline since Napster came around.


Againnn, you looking at album sales as a whole. "Overall" album sales include two completely different entities. Major Label sales, and indie sales. Two almost separate consumer bases with, most importantly consume music entirely differently. One failing, one succeeding. but when you lump them together under the umbrella of "music industry", because the former is bigger than the latter, you have "overall" decline.

[kyle is hk]

I'm telling you I shouldn't have to choose.


Hahaha good answer. And as much as people wish it could be that way, it cant. Its not that way anymore and never will. So its useless and outdated to think in those I guess that means when forced to chose, youre choosing the give away method?

[crackedthesky]

Againnn, you looking at album sales as a whole. "Overall" album sales include two completely different entities. Major Label sales, and indie sales. Two almost separate consumer bases with, most importantly consume music entirely differently. One failing, one succeeding. but when you lump them together under the umbrella of "music industry", because the former is bigger than the latter, you have "overall" decline.

This is the equivalent of saying "It's okay to steal as long as you steal from the people who have the most." It doesn't matter that indie sales are higher, especially since there's nothing to suggest that indie sales are higher because of downloading. It doesn't make downloading right, and wouldn't even if that was the case.

[cshadows2887]

Hahaha good answer. And as much as people wish it could be that way, it cant. Its not that way anymore and never will. So its useless and outdated to think in those I guess that means when forced to chose, youre choosing the give away method?

It's outdated because people are lazy, cheap and entitled. I don't have to accept that passively.

[crackedthesky]

Hahaha good answer. And as much as people wish it could be that way, it cant. Its not that way anymore and never will. So its useless and outdated to think in those I guess that means when forced to chose, youre choosing the give away method?

It can. At least on a personal level. You might not be able to change everybody else's means of obtaining music, but you can always change your own, so saying "everybody else does it and I can't do anything about that" isn't a good reason to start doing it yourself.

[kyle is hk]

This is the equivalent of saying "It's okay to steal as long as you steal from the people who have the most." It doesn't matter that indie sales are higher, especially since there's nothing to suggest that indie sales are higher because of downloading. It doesn't make downloading right, and wouldn't even if that was the case.


Not at alll what I'm saying. Not in the slightest bit. You completely missed my point about the two different types of consumers these two insutries have. See: Singles sales argument.

[kyle is hk]

It can. At least on a personal level. You might not be able to change everybody else's means of obtaining music, but you can always change your own, so saying "everybody else does it and I can't do anything about that" isn't a good reason to start doing it yourself.


So then what about the argument that I likely spend more money on music related things than you do?

[Colinmac36]

I still buy CDs and i always will, as long as they are available.

[crackedthesky]

Not at alll what I'm saying. Not in the slightest bit. You completely missed my point about the two different types of consumers these two insutries have. See: Singles sales argument.

Then how exactly does one market doing better and one doing worse justify downloading music, especially when that can't be linked as being the cause for the one doing well, but is almost definitely the cause of the one doing worse?

Also, the sales argument falls apart pretty easily. Single sales jump in 2003. Guess what happened in 2003? The iTunes store opened. Singles didn't kill the industry, the ability to buy them without getting off of your couch did.

So then what about the argument that I likely spend more money on music related things than you do?

I answered this in great detail. You likely spend more overall, but you likely don't spend at the same ratio. I might only listen to ten bands, but I'm paying for all ten. You might listen to 100, but you're probably not financially supporting more than ten or twenty. You'll be giving those ten or twenty more money than I am, but the others are basically left in the dust.

[kyle is hk]

T
Also, the sales argument falls apart pretty easily. Single sales jump in 2003. Guess what happened in 2003? The iTunes store opened. Singles didn't kill the industry, the ability to buy them without getting off of your couch did.

Yeah, thats exactly my point. Being able to BUY singles so eaily via online stores. Has nothing to do with illegal downloading. instead of kidies spending 10 dollars to hear that hit song they only need to spend 1. (or 1.29)


I answered this in great detail. You likely spend more overall, but you likely don't spend at the same ratio. I might only listen to ten bands, but I'm paying for all ten. You might listen to 100, but you're probably not financially supporting more than ten or twenty. You'll be giving those ten or twenty more money than I am, but the others are basically left in the dust.

Okay, so we're both paying and supporting 10 bands equally. But Im also promoting 90 other bands, which helps those bands out, even if its not via my money. Marketing basically. Thus, I am more beneficial to the music industry.

[crackedthesky]

Yeah, thats exactly my point. Being able to BUY singles so eaily via online stores. Has nothing to do with illegal downloading. instead of kidies spending 10 dollars to hear that hit song they only need to spend 1. (or 1.29)




Okay, so we're both paying and supporting 10 bands equally. But Im also promoting 90 other bands, which helps those bands out, even if its not via my money. Marketing basically. Thus, I am more beneficial to the music industry.

The ability to more easily buy music hasn't hurt the music industry. It made sales of full albums drop, but the money being brought in by singles is way higher than full albums were at their starting point. I really don't know what you're trying to say, there; none of that has anything at all to do with downloading illegally.

Also, your second statement proves my point. You might be promoting other bands, but I can do that just as easily, and without downloading their music. I haven't had the chance to buy an Iron & Wine record yet (it's on my list, and pretty high) but I promote that band every chance I can, without downloading their records.

[claw38]

I actually just did a report on how to help bands make the most money..one of the more interesting things I found was that the average band usually only gets about $1 from each record sale...most of it goes to the store that sells it or the record label..there's a lot of sides to this argument so I'll sit back for now =D

[veganboy-]

damn the man. free information!

[Love As Arson]

I like how the record industry has managed to turn bands on their fans, when it is their practices that have robbed them time and again. I actually see the advent of downloading as providing a basis for bands and their fans to cut out the middle man, with the former directly providing music to their fans.

[caveBEAR]

I like how the record industry has managed to turn bands on their fans, when it is their practices that have robbed them time and again. I actually see the advent of downloading as providing a basis for bands and their fans to cut out the middle man, with the former directly providing music to their fans.

Exactly. Labels are the one's who have stalled this, not fans or bands.

[Jake Gyllenhaal]

I actually just did a report on how to help bands make the most money..one of the more interesting things I found was that the average band usually only gets about $1 from each record sale...most of it goes to the store that sells it or the record label..there's a lot of sides to this argument so I'll sit back for now =D

Also note that each dollar has to be divided amongst the band members. The more band members, the less each individual makes. Which is why you cannot make a living in a ska band.

[crackedthesky]

I like how the record industry has managed to turn bands on their fans, when it is their practices that have robbed them time and again. I actually see the advent of downloading as providing a basis for bands and their fans to cut out the middle man, with the former directly providing music to their fans.

I hope this eventually becomes the case. I choose not to download music, and the record industry rewards this by asking for more money per download, even though they're paying less (don't have to print or manufacture digital copies).
I may not download illegally, but I have little sympathy for the industry as a whole. Most of the trouble is self-inflicted.

[JoeLovesMO]

I think filesharing is great. It exposes people to a load of bands they wouldn't have been aware of before. And if they like the bands they will buy t-shirts/merch and go to concerts such as me. I get my music from mediafire but if a band impresses me I buy their shirt and go to their concert.

[claw38]

Also note that each dollar has to be divided amongst the band members. The more band members, the less each individual makes. Which is why you cannot make a living in a ska band.

I lol'd and cried at the same time.
I refuse to lose ska to the music industry.

[sjb2k1]

i would listen to 3 bands if file sharing didn't exist.

[Nuns On A Bus]

I wouldn't have bought the vast majority of music that I have bought in the last few years without file-sharing.

[EasySkankin]

I'm going to play devil's advocate, here. I have a few questions and comments about this. Don't necessarily take what I say here to be my personal opinion on the issue; I'm just responding to this info as it's presented. Most of my qualms lie with the first claim, here, especially the "downloads don't equal lost sales" claim.



I find this particular part of that article interesting:



This quite literally says "downloading has no effect on sales" and then immediately after says "The record industry is suffering a drastic decline in sales." That seems a bit odd, to me. Why is the record industry suffering that decline? Could it be because of downloads? They basically say that the music industry is hemorrhaging money, but not because of downloads, it's because of some source they don't care to mention. Hm. It even says that all other entertainment mediums are booming. The difference would be that not many people pirate video games, but almost everybody pirates music.
The one flaw I've found with my theory is that the movie industry is booming, and movie piracy is almost as big as music piracy. Still, seems a bit interesting, and the "candidates" they give for the music industry taking a hit are, frankly, stupid. Less people are making music? Please.


As for the graph, it's entirely irrelevant. Their point is basically "look, entertainment sales are actually up!" But if you actually look at the chart, the music portion is way down. The record industry doesn't make money off of movie sales, video game sales, or movie rentals, so saying the record industry is doing better because the film industry is doing better is just incorrect. The graph shows the music industry consistently shrinking in the years since Napster, but they're claiming this graph somehow shows that there's no connection between downloads and sales based on other mediums doing better? That's nonsense. Of course music piracy doesn't hurt DVD rentals. I don't even know what they were thinking when they put that graph together. In fact, the constant growth shown by that chart owes almost entirely to video games and, to a lesser extent, dvd sales. While people might have more money to spend on games because they aren't spending it on music, that is in no way not "lost sales" for the music industry. They aren't making the money spent on those video games.
The study explains that on a case by case basis, the trend in sales of an album is the same regardless of how many people are downloading it. I personally wouldn't go as far to say there's NO effect on sales, but it represents only a small fraction of losses, which really are only being suffered by large companies like Universal and Warner music group, who are heavily invested in pop music with advertising, licensing, etc. which have been losing interest among listeners.

You interpreted the graph as it's supposed to be. The point is to show how the surviving film industry (which is amazing in itself) and rapidly growing game industry are swallowing up total volume of music sales, but there are many reasons for that. When you're talking about young people who are generally on a strict budget, it makes sense media is very competitive. Take into account the fact new games are still around $60 bucks, new technology is coming out every year (kinect and the ps3 equivalent for example), it's just a booming industry and hordes of young guys are putting cash down for it. Also, it's not impossible to pirate games, plenty of PC gamers do, although admittedly consoles are more popular. And piracy has hit film just as hard, if not harder. Just go to pirate bay and look at their top 100 downloads. It's always been dominated by movies whenever i've looked.

Also, as plenty people predicted, file-sharers actually spend more on music than most. In a pretty comprehensive survey (http://www.ipsos-mori.com/researchpublications/researcharchive/2355/Pirates-are-prime-prospects-for-music-and-video.aspx) done internationally, people who admitted to using unofficial download sites were more likely to legally purchase music online, physical CDs in stores, and pay for streaming services.

I definitely see what this is saying. I don't like it for personal reasons, but it's true. It'll also probably increase, now that companies are charging $1.29 for singles. I can see that price going up. Meanwhile, the price of full albums is more or less staying the same (most albums are still $9.99). This seems like it'll further the divide between singles and albums, but only to a certain point. At some point, if the price of singles continues to rise, it'll become more efficient to buy the whole record than just one or two singles. That is, until the price of records also starts going up. And this trend is very telling of our listening habits. People are more likely to buy a couple songs they know they like rather than spend 10+ on an album that will most likely have those uninteresting filler tracks they don't care about.

In general, I think the changes in the industry reflects a push towards quality vs. quantity, with the increasing success of independent artists and the focus on singles vs. albums. I personally think the iPod and the listening habits people have developed because of them have had more of an impact than file-sharing. They're the reason for this whole shift towards digital, and of compiling playlists of songs you know you'll enjoy rather than say 20% great songs and 80% filler.

To be a bit more dogmatic, this is a backlash from people being spoon-fed cheap, mass-produced music through popular media, which was very much centralized till the advent of file-sharing and social networking sites. I love how that new york times article put it, information and media is becoming democratic. Everything is decentralizing. Just think about the amount of music you would never have heard if it wasn't for this site. People who don't take music as seriously as us are flocking to different things, and leaving the large cash generating acts with a little less money in their pocket. All the while those of us who really love music are supporting artists who deserve recognition. I mean, arcade fire was AT THE GRAMMYS and won AOTY! I think there is a very deep philosophical aspect to this that I could go on about forever, but really the numbers speak for themselves.

All the talk about it helping smaller artists is really one-sided. It does increase the exposure, but it also makes it harder for a lot of these bands to be financially solvent.

And almost all of those things you quoted say that there's been a colossal drop in album sales since the rise of illegal downloading but then say they can't prove downloading is the reason. If it walks like a duck...
I haven't read through all the responses, so excuse me if this has already been said...

It's the complete opposite. As an upcoming artist, if you're trying to be financially solvent you need to make good music that has an audience consistently, and if you're really serious you need to tour. I never thought it made much sense for an artist to just put out an album and sit back and pretend that alone has merited them a steady flow of cash (of course there are exceptions, but it's usually because the music is exceptional). You make a great debut album showcasing your style to create some hype. Maybe a bunch of people download it for free, because it's new. If it's good enough people are gonna be interested in what's coming next, and it's with that momentum that the beauty of the internet really comes out and you can make a decent living doing what you love. I saw you casually dismissed the idea of quality music, but that's what this is about.

Also, i'm curious. You're releasing an album, right? Hypothetical: Would you rather A)Make $200 off of a sale, or B) Have 200 more people listen to your music?

[EasySkankin]

I like how the record industry has managed to turn bands on their fans, when it is their practices that have robbed them time and again. I actually see the advent of downloading as providing a basis for bands and their fans to cut out the middle man, with the former directly providing music to their fans.
Precisely. It's comical seeing how people are crying over the losses of companies that have swept so many great groups under the rug. Of the hundreds of thousands of dollars (lol) the industry has made from lawsuits against ordinary pirates, artists haven't seen a penny of it. I think it exposes a lot of artists for who they really are.

Pirate Verbatim (http://pirateverbatim.com/) is a neat site where you can find different artist's opinions on filesharing.

[cshadows2887]

Also, i'm curious. You're releasing an album, right? Hypothetical: Would you rather A)Make $200 off of a sale, or B) Have 200 more people listen to your music?

I've said before, I don't think an artist should have to choose between people hearing it and people supporting them.

[EasySkankin]

I've said before, I don't think an artist should have to choose between people hearing it and people supporting them.
how does less people hearing it = more people supporting it?

[cshadows2887]

how does less people hearing it = more people supporting it?

I'm saying that shouldn't have to be the case. Every person who downloads it has obviously heard of it. It's not like making it free all of a sudden makes everyone in the world know who you are. In most cases they can very easily hear the record to determine if they like it, too. They should also be able to support it.

Which is not to say on a more practical level, we don't put thing up for free download (our first EP is up for free right now), but that in the ideal sense, I don't think it's right that the fans decide whether or not an album is offered for free. That choice should be up to the band.

[Love As Arson]

Part of the problem, as it pertains to exposure, is the consolidation of media entities, thus ensuring only known quantities singles get airplay. The internet has cut into that significantly, however, the fact remains that many mainstream sources of music only provide a limited selection of artists to choose from. Again, this is a fault of the industry and big business in general. There is no investment in talent, only a proven successful formula.

[crackedthesky]

Actually, the article doesn't really "outline" anything. They flat out say they don't know why sales are declining, just that it might not be downloads. And as for taking it on a "case by case" basis, that's sort of a double-standard, when you take into account what I said to Kyle earlier: people who download spend more on music overall, but they aren't spending at the 1:1 ratio people who purchase are. Kyle might listen to 100 bands, but he's only financially supporting a few of them, whereas I might listen to fewer, but I'm supporting every one of them. He might spend more than I do, but he's spending in a more focused sense.

Also, I'm aware that people pirate movies and games. It is, however, nowhere near the level of pirating music. Not even films are. People don't pirate movies as much because a) they miss out on the additional content and b) movies take up a fuck of a lot of space. We have entire devices aimed at putting music on. Movies? Not so much. My iPod might hold 10,000 songs, but that would be roughly 100 movies. Songs are not only easier to pirate, but they don't run the loss of content and they don't take up as much space.

[crackedthesky]

Part of the problem, as it pertains to exposure, is the consolidation of media entities, thus ensuring only known quantities singles get airplay. The internet has cut into that significantly, however, the fact remains that many mainstream sources of music only provide a limited selection of artists to choose from. Again, this is a fault of the industry and big business in general. There is no investment in talent, only a proven successful formula.

As true as this may be, I don't see how it relates to downloading. In order to download a band's music, you first have to have heard of them, so lack of exposure doesn't lead to more downloads. A label not advertising a band won't cause people to go download that band's music.
Unless you were just talking about the gross mismanagement of the industry as a whole, in which case, have at it. My sympathy for the people running these labels has pretty much run dry.

[Love As Arson]

My post was in reference to the fact that many bands do not have the exposure or fanbase to support themselves. It isn't the case that downloading has made this worse, industry practices have exacerbated the situation such that only a few bands can "make it".

[crackedthesky]

Ah. I definitely don't think downloading has a negative effect when it comes to exposure, I think it can be an excellent way to find bands. That said, once found, why not buy the album? Like someone earlier said he downloads the music and if he likes it, he buys a shirt and goes to the show. Why not go the extra mile and buy their album?

And anyway, like I said earlier, if you find 200 bands through downloading, there's no way you're going to concerts by every one of them, so why not buy their CDs?

I've really made it out like I'm against downloading, but that wasn't really my intention. There are certain situations where I think downloading is absolutely fine. However, I think a lot of people go overboard in their justification of it. A lot of things I'm hearing are little more than bad excuses, in almost every case I've seen, there's no detriment in taking that extra step and just buying the record. If you can afford to buy a shirt and go to a show, why can't you afford to buy the record, too? If you sincerely had to choose (which I find is often not the case) then I'd definitely say see the band over buying the record, as they will probably (note the probably) make more money from a show than a record. But in most cases, this is a false dilemma. There's very little physically preventing you from buying an album, and everything short of that is just an excuse or a justification, and even a good excuse is still an excuse.


On the flipside, I think suing people for downloading is just fucking stupid. They sue for way more than they lost. Raising the prices to cover the lost sales is also not the way to go, that's only punishing those of us who still buy and making illegal downloading look that much more appealing.

I think if labels just offered the artists a higher percentage of the sales, it'd create a better scenario for everybody. People would be more motivated to buy their records, bands would be more motivated to promote record sales, and while the label might not be making as much per sale, they'd be making more sales overall. But they won't do that, because maximizing profit overall is their main priority, so at least for now, they're going to keep pretending that raising prices will cover whatever sales they lose to downloading, and by the time they figure out that isn't the case, it'll probably be too late to try something different.

At least I heard they've stopped suing people. Any word on that? I haven't heard anything in a while.

[JJW319]

this makes me love the artists I love even more