The Music Piracy Myth
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Tim O'Reilly
Apr. 13, 2003 06:08 PM
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Currently, if you do a google search on RIAA statistics, I'm number one
and two; you are three and four, and your article refers to me, so I
know you know who I am.
The article to which you referred was published in December. Since that time, a lot has happened, as I'm sure you are aware, not the least of which being the RIAA's recent lawsuits against college students.
First of all, I am a musician. The only reason I even started researching what the RIAA has to say is because of the problems I had selling my own work at eBay, which were entirely due to RIAA accusations of copyright infringement (it was my own CD).
After looking at the 2002 RIAA data, I also realized that over the last 5 years, the recording industry has shipped out more than 2 billion physical units of product, adding up to a retail value of more than $20 billion. You'd think that they would embrace a free marketing and promotion opportunity like mp3s. Let's face it, an mp3 is an inferior copy. I consider mp3s to be an ad for my actual recording.
My current consternation comes in the form of a letter from my congressional representative, who states that "In 2001, record sales were down 10 percent because of unauthorized music downloads..."
Yes, sales were down. Other than that obvious fact, there is no empirical data to suggest that downloading is the cause of the problem. I've asked the RIAA. In fact, I would go so far as to say I have relentlessly taunted them in hopes of a reasonable explanation. They offer none.
So think about this. As the original research I conducted indicates (and has been verified by SoundScan via BusinessWeek.com), the record labels began to reduce the number of releases BEFORE the Napster hearings. When they went in front of Congress to complain about downloading, Hilary Rosen could confidently state that sales were going to suffer.
Because it was engineered.
Here's another interesting point. I can go to www.discmakers.com and order CDs for $1.89 each. Not "replicated" but created from a glass master. As I understand it, the current wholesale price for a CD is about $12.
So how can EMI's Cost of Goods Sold (2001 -- at Hoovers Online) be 71% of their income? BMG's 2001 annual report blames industry shortcomings "long obscured by market success" and Vivendi told its stockholders that an "anticipated lighter release schedule" had something to do with it. BMG is the only one that even mentions file sharing -- as a justification in investing in Napster.
Why does "sales are down 10%" overrule any other explanation for declining sales? A bigger question is -- Why won't anyone in the media even discuss this?
Recently I spoke to the FCC at a public hearing in Tempe (Phoenix area). Next month, I'm going to speak at the DMCA hearings at UCLA Law School.
Additionally, I'm hearing from college kids all over (Duke, Auburn, UCSD, Univ. of North Carolina, Yale Law School, Univ. of Wyoming). They're reading my site and they're using it as background for dissertations and reports. They ask questions. They do not accept vague answers.
Why does the government accept the "sales are down" without any consideration of other, equally plausible explanations? And why does the press?
When the majority of the public is guilty by default, then something is terribly wrong. I'm not sure why I'm even writing to you, except that you seem to be about the fifth person in the country that has applied some logic to this issue.
I've written to every member of the Senate Judiciary Committee, Commerce Committee and Small Business Committee. I've written to Jay Berman, Hilary Rosen and the Recording Artists Coalition. With the lone exception of Janis Ian, absolutely everyone has totally ignored me.
What can we do?
That being said, I think that the tide will eventually turn, as long as Congress doesn't act too quickly to completely shut down file sharing. The RIAA members are fighting a delaying action till they can get themselves in gear. Ultimately, they will ride the horse in the direction it's going.
Meanwhile as George points out elsewhere on his site, there are plenty of musicians eager to have their music shared for its promotional value -- much as I argued in Piracy Is Progressive Taxation. He argues that one useful thing you can do in addition to writing to your congressional representatives is to ignore the music put out by the majors, and explore the music that is put up for free redistribution by sites such as DMusic.com and GarageBand.com.
Tim O'Reilly is the founder and CEO of O'Reilly Media, Inc., thought by many to be the best computer book publisher in the world, and an activist for open standards. O'Reilly Media also publishes online through the O'Reilly Network and hosts conferences on technology topics, including the O'Reilly Open Source Convention, the O'Reilly Emerging Technology Conference, and the Web 2.0 Conference. Tim's blog, the O'Reilly Radar "watches the alpha geeks" to determine emerging technology trends, and serves as a platform for advocacy about issues of importance to the technical community. For everything Tim, see tim.oreilly.com.
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Showing messages 1 through 8 of 8.
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Another site...
2007-05-21 09:49:45 creativetype [Reply | View]
Random but I know that http://www.veassociates.com also offers the same as that other disc site.
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Here, here . . .
2003-04-15 19:17:20 anonymous2 [Reply | View]
. . . as a musician myself, I'm intrigued by your arguments (esp. progressive taxation). The only Union I have ever belonged to is the AFM & we still had to "pay" to perform. And as the "sacred trust" of a musician is to perform live, there is no excuse for whining when distribution is part of a "major label" signing. Musicians - don't like the distribution avenues? Confront the powers that be in your industry. They put you in the studio, pampered your butt and exposed you to processes and techniques that heve (hopefully) bettered your craft. Their outrage at revenue shortfalls might be the fallout of too many rap entourages parading to movie careers & rockers lasering etc. on the comeback trail. MP3's are to CD sales what scalping is to an arena show's total attendance - you're inclination is known, the depth of your experience is measured by what you expect from your budget & timing. Spur-of-the-moment "this'll be cool" vs. "I've been marshalling my resources to increase my knowledge". Focus will spawn many things - the killing off of a "major entertainment sector" by dilettantes wouldn't seem to be one of them.
No offense to the folks who can't afford CD's - Abe Lincoln supposedly studied by . . .
Steve Vander Veer
flydutch@bellsouth.net
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Not all the press buys the RIAA Myth
2003-04-14 11:36:54 Tim O'Reilly [Reply | View]
I just got the following message from Jon Iverson:
Hi Tim - not all of the press buys the RIAA myth about piracy. Here
is a link to a recent editorial I wrote for Stereophile magazine's
April issue. It is the page one editorial and is also now online.
http://www.stereophile.com/showarchives.cgi?812
Every week, we cover news about audio and the music business, and we
always try to keep the RIAA PR in context with consumer interests.
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Labels are afraid of the net because. . . .
2003-04-14 11:20:10 anonymous2 [Reply | View]
. . . we can now all see how crappy most of their releases are BEFORE we buy.
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If MP3s hurt record sales at all, it's primarily for the bad, overrated artists.
2003-04-14 04:15:46 anonymous2 [Reply | View]
Looking at how people generally relate to music and buying albums, I'd say that it's likely that, since high availability of decent copies of music enables you to pick and choose at a greater extent, overhyped artists (i.e. large parts of the the 'pop' world and the derivatives in rock/metal/soul et.c. as well) will probably suffer a loss in sales, while less known musicians might greatly gain from having their work spread.
Those who take an actual interest in what they hear are also likely to buy albums they like when they can, and these people generally don't care for the social bit of listening to the "right" music.
MP3s are likely very bad for markets such as the perpetual feed of thematical songs at every season, and the various collection of recent pop hits.
This is just speculation, of course, but if so, I can see why the industry giants are angry - this gives the smaller labels and the actual artists some leverage in sales - based on content!
/ Ahnìon
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DVD's are hurting music sales
2003-04-14 03:43:46 GerardM [Reply | View]
When you buy music the old fashioned way, in a shop, you find that the last few years the space dedicated to CD's is down. Shops have dedicated the lost space to DVD's who have a bigger margin and are currently more popular.
When you want to buy classical music it is nowadays hard to find shops that have it at all. This is due to the high price and the relatively small turnover.
People have a certain amount of money available for luxury. DVD and CD are similar products and you buy one or the other from said budget.
Thanks,
Gerard
| Showing messages 1 through 8 of 8. |
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The major corporate record companies have been guilty of piracy for decades. In some cases the small ones too. The have made millions (billions?) of dollars on the backs of the working musicians and then handed the musicians a bill and said "You sold 10 million records but you're broke". In other words they stole all the money generated by the musicians intellectual property.
Now before I attack the other pirates in this situation let me say this. There is nothing wrong with individuals sharing music or any other intellectual property. That's why we have public libraries in free countries and you can share music with any of you're friends on the internet. It's called email!
We have shared intellectual property with one another for decades and it has never threatened any ones ability to sell and make a reasonable profit from their art. As long as there is a free market (not free merchandise) and a demand for a product the average guy and the big company can both make a reasonable amount of money.
I couldn't care less about the major corporations loosing money. It's their fault. It's the direct result of unbridled greed and stupidity and it's happening in a lot of other industries for the same reasons.
On the other side of this issue are the other pirates.
They are NOT the individual down loaders.
They ARE the owners and operators of Internet server systems that are doing the same thing as any other greedy profiteer. They steal from one person and sell to another.
The problem is that the owners of these server systems (any of the Peer to Peer, Bit torrent etc.) that provide my intellectual property (without my permission) for free to a mass market are making money off of my work.
If you think they aren't you are a damn fool. What other reason would there be?
Who do you think runs these things? The tooth fairy?
They are making huge amounts of money from corporations who pay them with advertising dollars.
In some cases individuals pay them for the right to unlimited access AND they get paid ad money.
The visitor traffic generated by giving away other peoples property (without their permission) is in the tens of millions per day!
Cut off the money supply. You eliminate the problem or at least a big part of it.
I don't know if it's possible but I wonder if some one could take legal action against (sue) the *%&^! that are feeding the system not some college kid that loves to collect music.
If you are a musician who doesn't care about selling you're records, fine. I don't care. That's you're right to do what you want with you're stuff. I on the other hand want some way of making a buck on my hard work.
I also have the right to sell my intellectual property for a reasonable price and give away some free samples
- AS I CHOOSE! - Free stuff is good for business.
But if it’s all free there is no business = no money = lots of crappy music to listen to.
If it's good and people like it they will buy it but if they can get all of your stuff on a massive scale for free... you're screwed.
This is just a fact of human nature. If I can get all of your stuff I want for free why the hell would I pay you anything for it?
I am NOT a member of the privileged social class who can afford to give away their art for free.
I am NOT some talent less nut who makes a bunch of noise on an instrument, records it and gives it away because it sucks. They invested nothing of themselves in their art.
I don't mean amateurs. I mean people who don't have a clue how bad they are.
They just create a sh_t storm of garbage on the net and make it more difficult for fans to find good music.
That's how I became great at what I do. I had to work at it. I had to spend MY money and My time.
I had to become good enough to get someone else to plunk down their hard earned money to hear it.
I have digressed from the main issue. Please excuse me.
As it stands there isn't 1 problem. There are several. The corporations (pirates) are pushing the politicians (pirates) to do something about this issue (piracy).
I have every confidence that they will totally screw things up
and make things worse. That's what they seem to be experts at.
I hope this all works itself out over a short time without too much political corporate interference.
I’ve read a lot of hype from people on both sides of this issue who take up the extreme positions on it. One side wants everyone to pay too much money for access to digital music or any music.
The other is willing to accept a situation that will (in my opinion) only change who walks off with most if not all of the money.
The losers will still be the fans, the musicians, and the music.
I will say this. I don’t trust extremists in any form on any subject.
They are either ignorant of the facts or looking to exploit the situation.
One thing is certain. We are in the midst of a major change in the way this market functions or dies.
I hope the change is for the better for the majority and not for the few.
TroubleMaker