New research by two European Commission
researchers finds that “digital music piracy should not be viewed as a growing
concern for copyright holders in the digital era" and that the results "indicate that new music consumption channels such as online streaming
positively affect copyrights owners.” The results fly in the face of a recent report that said the closure of online platform MegaUpload almost certainly directly led to a decrease in online film piracy and an increase in legal digital sales of movies. Brett Danaher and Michael D. Smith, professors at Wellesley
College and Carnegie Mellon University (CMU) said that “the closing of a major
online piracy site can increase digital media sales, and by extension [we] provide evidence that Internet movie piracy displaces digital film sales.”
The two authors of the new report, Luis Aguiar and Bertin Martens, from
the EU's Information Society Unit, now say "Although there is trespassing of private property
rights (copyrights), there is unlikely to be much harm done on digital music revenues" adding "This result, however, must be interpreted in the
context of a still evolving music industry. It is in particular important to
note that music consumption in physical format has until recently accounted for
the lion’s share of total music revenues. If piracy leads to substantial sales
displacement of music in physical format, then its effect on the overall music
industry revenues may well still be negative."
The authors highlight the differences in the five countries investigated commenting: “The most striking differences appear when looking at the
determinants of download. Compared to Germany, Spain show 230% more
clicks on illegal downloading websites. Italy presents an important difference
of 134% while the UK and France have 43% and 35% more
clicks respectively. France stands out when it comes to streaming, with 150% more clicks than Germany. Spaniards have 20% more clicks than
the Germans, while Italians have 25% less. The UK presents a small
difference with Germany in terms of streaming, with only 9% more
clicks.
The authors also suggest that the lack of a legal alternative for a given piece of content may have a lot
to do with whether or not its pirated. The authors also note that while music revenues
have fallen steadily since 1999, last month the International Federation of the
Phonographic Industry (IFPI) reported its 2012 global recorded music revenue is
up for the first time in 14 years. It rose 0.3% during 2011, to reach $16.5 billion.
The authors conclude: “After using several approaches to deal with the endogeneity
of downloading and streaming, our results show no evidence of sales
displacement (emphasis added) Overall, our different estimates show relatively stable,
positive, and low elasticities of legal purchases with respect to both illegal
downloading and legal streaming" adding "All of these results suggest that
the vast majority of the music that is consumed illegally by the individuals in
our sample would not have been legally purchased if illegal downloading
websites were not available to them.”
On Monday, BPI Chairman and former EMI UK chief Tony
Wadsworth told the Radiodays Europe conference in Berlin that he is very optimistic
about the future of the music business. Predicting that the UK recorded music
industry will pass the 50/50 point in terms of digital versus physical revenues
this year, Wadsworth pointed to the growth of the mobile and in-car internet as
providing even bigger digital opportunities for music services, and their music
right owning partners, and the start of a new sustainable period of growth.
http://arstechnica.com/business/2013/03/new-research-music-piracy-should-not-be-a-concern-for-copyright-holders/
More on Radiodays Berlin here http://www.radiodayseurope.com/
More on Radiodays Berlin here http://www.radiodayseurope.com/
and for the 'MegaUpload' research the see
Unsurprisingly Frances Moore, boss at the IFPI, the record labels trade body said "The study contains significant flaws and is therefore misleading in its conclusions about the impact of piracy. In particular, it uses a methodology that does not accurately measure digital music purchases and, very importantly, it omits from its assessment the impact of piracy on subscription and streaming services. Most research confirms a very different picture, which is that piracy overall has a negative impact on the legitimate music business". Will Page from Spotify added his own criticisms, one of which was that "the unfair competition that legal streaming services face from music piracy is not properly acknowledged by the authors"
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