New research says that music piracy should not be a “concern for copyright holders”

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/

and for the 'MegaUpload' research the see 

http://arstechnica.com/tech-policy/2013/03/researchers-movie-studios-made-more-after-megaupload-was-shut-down/

Spain rejects 'US influenced' copyright bill

After a narrow vote, a Spanish parliamentary commission has rejected a controversial bill aimed at protecting content owners from internet downloaders. All of the main Spanish parties, except for Prime Minister Jose Luis Rodriguez Zapatero's Socialists rejected the so-called Sinde Bill, named after Culture Minister Angeles Gonzalez-Sinde. The draft legislation would have set up a government commission which would have then provided courts with details of websites offering access to copyright-protected material such as music, movies, video games or software. A judge could then have ordered the closure of offending websites.

The bill sparked furious opposition from internet users who accused the government of violating the freedom of expression but Gonzalez-Sinde said the law only intended to put an end to Spain's position as a 'paradise of piracy.' Techdirt put a different slant on things, firstly praising Spain’s “somewhat more reasonable copyright laws than other parts of the world” highlighting provisions that say that “personal, non-commercial copying is not against the law and also says that third parties should not be liable for copyright infringement done by their users” adding that obviously Hollywood ‘hates’ this and that Spain's recently introduced reform package seemed like a “checklist of the entertainment industry's wishes" and that one of the recent Wikileaks diplomatic cable leaks showed that “US diplomats played a role in pressuring the Spanish government to make these changes, at the behest of movie industry lobbyists”.

http://www.techdirt.com/articles/20101221/15434012367/spanish-legislature-rejects-hollywood-backed-copyright-law-changes.shtml

Musical pirates: can the UK turn down the volume?

Writing for Times Online yesterday ("Government changes tune on music piracy promise"), Media Editor Dan Sabbagh reports that the UK's Culture Secretary Ben Bradshaw has apparently stepped back from a promise, made in July 2008, to reduce the volume of internet music piracy by 70 per cent over the next two years. This was part of a three-way agreement between the Government, internet service providers and media companies. However, according to the contents of a letter which the Minister wrote to Liberal Democrat culture spokesman Don Foster on 22 June, a copy of which has been passed to The Times, he has qualified that commitment, stating that the two- to three-year timescale was “based on the premise” that measures to combat piracy would be “taken from July 2008 onwards”. Those measures were the sending of warning to internet subscribers with a connection through which piracy had been taking place. While leading internet service providers agreed to participate, the results of this modest initiative have yet to be published.

Don Foster is quoted in the article as saying:

"This is another example of the Labour Government’s total inability to meet its own targets. Having wasted years, they now want to move the goalposts and hope we don’t notice".

The Digital Britain White Paper reiterated, at p. 112, the 70 per cent target, without mentioning when it might be achieved. A proposed Digital Economy Bill is expected to require internet service providers to write warning letters to households where piracy is found to have taken place, with ISPs having to hand over personal details of serious repeat infringers so that they can be taken to court. However, this Bill is unlikely to come into law before 2010, some 18 months after the original commitment to reduce piracy by 70 per cent was given.