Blaming Music Pirates Is The Easy Option

Music piracy is crippling the record industry, according to statistics from trade industry body IFPI, the Guardian reported on Thursday (shared by @sarahlynnd).

The report says:

The rise of new services such as Spotify and legal crackdowns on online pirates failed to stem tumbling music sales last year, according to industry figures that show a dramatic slowdown in digital growth.

Record labels struggling to make up for the sharp fall in CD sales by increasing downloads and other new revenue streams have blamed rampant piracy for a slowdown in the growth of digital revenues to 12% last year, taking total worldwide sales to $4.2bn (£2.6bn).

That was less than half the 25% growth rate in 2008 and left overall music sales down for the 10th year running…

…The IFPI estimates that 95% of music downloads worldwide are illegal

However, a blog post on Views Flow (hat tip to Steve Lawson for finding and sharing) points out that:

Compared to music buyers, music sharers (pirates) are…

* 31% more likely to buy single tracks online.
* 33% more likely to buy music albums online.
* 100% more likely to pay for music subscription services.
* 60% more likely to pay for music on mobile phone.

Now, I like a good case study, and I’ve unwittingly found myself as part of one. After listening to both The Cribs’ and Kasabian’s new records since they came out on Spotify, i’ve gone and bought both. How 20th century.

Views Flow make the point that:

If anything, the music industry should have more respect for file-sharers, as they are their most valuable consumers. They are ahead of the curve and actually leading the way for the future of digital music, buying more digital music than anyone else. It’s the music industry that has to change, not the other way around.

And I wholeheartedly agree. If it wasn’t for file-sharers we’d not be looking to develop better business models, better distribution platforms and innovative ways to make sure the artist gets the right amount of money for their work.

The record companies blow their trumpets when this sort of data is released and rarely look at the quality of the music on offer for people to consume. It’s not great at the moment. Indeed BBC Newsbeat claimed earlier this week that British Indie Guitar Music is Dead, that’s quite a chunk of the industry that will be suffering to make any sort of money isn’t it…

Music goes in cycles – we’ve hit the dead end of the scene that the likes of The Libertines, Franz Ferdinand and Bloc Party helped to create, just like 1997 saw the death of Britpop. What the record companies are panicking about now is that all the good guitar music is hidden and they can’t find it so they’re blaming music piracy as a smokescreen for a shortage in marketable artists.

Public tastes have changed and that means that record companies have got to invest more money in finding artists who will be sellable, opposed to flinging out the same old dross – that risk is not one they’re likely to take without a definite promise of dollar.

Online Streaming Beating Illegal Sharing

An article in the Guardian on Sunday reports on a study by the guys at Music Ally which says that music streaming has paved the way for an increase in sales and a drop in illegal filesharing

The key points:

a) 26% of 14 to 18 year olds admitted filesharing at least once a month this January, against 42% in December 2007

b) 65% of teenagers are streaming music regularly

c) 31% of 14 to 18 year olds listen to streamed music on their computer every day

d) 19% of music fans are buying single track downloads

e) 17% of music fans are illegally using filesharing platforms

According to the BPI, digital singles were up 41.5% in 2008, while physical singles sales plunged 43.5%, a good demonstration that music is alive and well.

This is interesting timing following the news last week that the BPI and Virgin will begin contacting people suspected of filesharing and last month’s Digital Britain report which outlined planjs to give Ofcom an increased role in preventing filesharing.

Indeed, earlier this year, in agreement seemingly with this new report, RIAA and IFPI research showed that only 10% of all illegal downloads are considered to be a loss in sales. This with the admission that the BPI got it wrong over Napster would indicate that there is a U-turn in the offing.

So where do you think the likes of Spotify, Last.FM and We7 will fit into the next BPI report, and how will these services affect music downloads over the next 12 months?

Pirate Bay – A fight for a Right

Jed Hallam has tagged me into a post about Pirate Bay, have a look at his views on his blog, Rock Star PR…

Following the sentencing of the Swedish trio who run Pirate Bay last week, there has been a growing backlash against those who helped to bring about the decision.

Not only has Pirate Bay membership grown, but demonstrations have occurred and the IFPI (International Federation of the Pornographic Industry) website has been attacked by hackers eager for revenge for the industry body’s part in the trial.

Are you surprised? No, neither am I.

The problem here is not Pirate Bay. Nor is it the IFPI or the RIAA. It is not the actors, musicians or games developers who are at fault. And, it’s not the people who download music, films or video games. The problem we face is culture. Or rather, two very different cultures which are completely out of sync and need to be re-aligned before they implode.

First we have the culture of those that want to make money

Record labels, book publishers and film distributors have made money for years out of selling on goods which have not been created by them, at a profit, with little return for the artists. Companies such as EMI and Warner Brothers are worth millions because they have the power to make or break a product which needs their backing to get out to the wider public. Without these channels of distribution, bands would struggle to get airplay and films would fail to be seen on screen. With a free distribution model, who needs these guys? Nobody. Hence their requirement to try and shut off those methods of delivering material.

Secondly, the consumers of Instantaneous free goods

This is you, me, your dad and probably pretty much all of your friends. In the last ten years we’ve seen album leaks turn into free releases all because of the ability to share files for free through peer to peer networks. We want stuff, we want it now, and we want it for free. Why? Well why the hell not? If something we want is there to be taken without the need to pay for it, then what’s to stop us? It’s no different to making a mixtape.

Thirdly, the creators themselves

This is where the first two cultures collide. Many artists embrace the new technology, using it to share their work freely and promote themselves in the process. Many others of course, are not so willing to see all their hard work go for a bag of rocks. This will differ from maker to maker, but they are the people responsible for creating the music, games and films that we so liberally download for free, and they are often the least financially rewarded. That’s got to be unfair, right?

So what can be done to restore the cultural balance in order for everybody to get their fair share?

As a musician , I have released records (scroll down, it’s EP of the month) that I have worked hard to make, and hence, wanted to get something back for making. Without making the CD I would not have had the opportunity to play gigs and meet new people, and had the opportunity to miss out on that all important record deal.

But what about recording the music and then giving it away, for free, at gigs and online? If you are giving something extra to people who like your music, this helps to build a bond with them and encourage them to keep listening to your music and coming to see you live. It’s giving more than you are getting, which is a sure fire way to encourage loyalty.

Distributors need to look at ways of encouraging fans to keep buying CDs, films and games. As Jed said:

Music simply isn’t about singles and albums, it’s about the whole experience, man. Why don’t labels employ similar tactics to fancy advertisers and marketers? Sell albums that come in huge boxes filled with information, stickers, posters, access codes to secret sites, interview videos on USBs, rare tracks, live footage, branded memorabilia, booklets, additional artwork, karaoke versions, stripped down versions, remixes?

And why not go further? Let’s expand it further from music, by encouraging your fanbase to get involved and become a part of what you are offering.

Modding is huge in gaming – it’s the equivalent of remixing music – so why not get your fanbase to create new levels or characters for your games, then release them officially, for free, via your game’s microsite whilst still charging for your game?

Why not give your film alternate scenes and dialogue to let film fans create their own story and then make them available via Youtube?

You could get the your support base to create artwork for posters or even that shiny front cover of a box?

Do a Doritos and get avid fans to make online trailers and offline adverts?

By making a more inclusive package, you are excluding fewer people. Yes, there will of course always be ‘pirates’ who refuse to pay for anything, why not try to involve them rather than fight against them?

Compete and be beaten, or compliment and grow – what would you rather do?