Sunday, January 9, 2011

Music Piracy = Less Sales - a myth?


There are multiple ways to obtain digital music online - legally and illegally. Some of the legal means are iTunes and Amazon. I will not tell you how to do it without paying some dollars (but I’m sure you already know how, right? Guilty!)

Some say online music piracy translates into multimillionaire losses to the industry, yet others claim it actually serves as the means to gain some reputation and fame to before-unknown artists and bands. There are studies which also argue that there is actually no direct relationship between piracy and the decline in music sales.

Felix Oberholzer-Gee and Koleman Strumpf performed a statistical study of sales of 680 albums over 17 continuous weeks and found that illegal music sharing actually increases sales – 150 downloads mean one more CD copy (original) sold. I guess that is too much. They also claim that the relationship between loss of sales and music piracy is not direct but that there are other causes. Additionally, they argue that “illegal file sharing would have accounted for only 2 milion fewer compact discs sales in 2002, whereas CD sales declined by 139 million units between 2000 and 2002.”

On a particular history note, Radiohead’s album "Kid A" leaked into Napster three months before it had to be released but yet it sold over 200,000 copies the first week and got onto No. 1 on the Billboard charts. Some say this means illegal downloading helps bands promote their albums. I think this was just pure coincidence, but who knows.

However, we still need to do something to reduce music piracy and get those sales back as profits. So only follow these instructions and you will be "safe". After you read the instructions, you will think “um, but how do I digitally watermark my songs?” Here is one of the multiple companies that do it: The PAN Network.

The RIAA and music companies must work together to develop and continuously improve technology to keep decreasing illegal downloading. I don’t think new legislation will do any good, since it cannot keep in pace with technology.

4 comments:

  1. Great Post Miguel. For every new piece of legislation or online security technology there are many more new innovative ways of getting around them. Such is the world we live in today where many have the tools necessary to develop software or ways of hacking to make music more available to the masses for free. Radiohead actually took advantage of this by making their album "In Rainbows available for download on their website in 2007 for whatever price the customer was willing to pay. This allowed the band to have more control over who downloads their music and also gave them insight into the real losses or profits to be gained by embracing the online music sharing culture.

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  2. Great Post Miguel,

    I think MishaW touched up on a way to combat illegal downloads - by making the music available legally on the artist's website. Although being free is the main strength of piracy, another strong component would have to be its availability. Nowadays everything is done online. The songs we listen to through our ipods or mp3s must first go through our computers. I feel that people do not like taking that extra step of buying a CD and then uploading it to their computer just so they can then upload it to their ipod.

    Straight online downloads may be the best way artist's can minimize illegal downloads while making more cash per song since they are taking out the record store middle man.

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  3. Certainly, it is difficult for legislation to keep up with technology changes. Nowadays, certain level of legislation exists, but enforcement is rather weak. Maybe the best way to deal with the issue is learning how to live with it. All players involved might accept the benefits derived from the online distribution channels and try to develop new ways to compensate for the downsides. After all , if “new legislation will do any good, as it cannot keep up with technology”, as you stated in your article, new technological ways to prevent illegal downloading will do any good in the long term as technology is unlikely to remain static and cannot keep up with itself.

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  4. Like many of us have said, there ir no way that legislation alone is going to combat music and internet piracy, technology goes way too fast for the government to catch up. Miguel I think that your instructions to pretect ourselves are very useful, like I have said in other posts, we have to take action and not wait on other to solve things for us.

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