UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

June 11, 2009

WHY THE MUSIC INDUSTRY MAY BE GROSSLY OVERSTATING THE COST OF ILLEGAL DOWNLOADS

Charles Arthur, Guardian Data Blog - The music industry does like to insist that filesharing - aka illegal downloading - is killing the industry: that every one of the millions of music files downloaded each day counts as a "lost" sale, which if only it could somehow have been prevented would put stunning amounts of money into impoverished artists' hands. . .

At least 7 million people in Britain use illegal downloads, costing the economy billions of pounds and thousands of jobs, according to a report. . .

But it left me wondering. Why does the music industry persist in saying that every download is a lost sale? If you even think about it, it can't be true. People - even downloaders - only have a finite amount of money. In times gone by, sure, they would have been buying vinyl albums. But if you stopped them downloading, would they troop out to the shops and buy those songs?

I don't think so. I suspect they're doing something different. I think they're spending the money on something else. . .

Thus began a hunt for the figures for UK sales of games and of DVDs and of music to see if there was any consistent relationship between them. . .

The first clue of where all those downloaders are really spending their money came in searching for games statistics: year after year ELSPA had hailed "a record year". In fact if you look at the graph above, you'll see that games spend has risen dramatically - from L1.18bn in 1999 to L4.03bn in 2008.

Meanwhile music spending has gone from L1.94bn to L1.31bn.

DVD sales and rentals, meanwhile, have nearly doubled, from a total of L1.286bn in 1999 to L2.56bn in 2008.

If we assume that there's roughly the same amount of discretionary spending available. . . then it's clear who the culprit is: the games industry. By 2009, the amount spent in games and music is almost exactly the same as 1999.

Yes, downloaders aren't spending money on the music industry, and in that way they are hurting it. . .

But the reality is that nowadays, one can choose between a game costing L40 that will last weeks, or a L10 CD with two great tracks and eight dud ones. I think a lot of people are choosing the game - and downloading the two tracks. That's real discretion in spending. It's hurting the music industry, sure. But let's not cloud the argument with false claims about downloads.

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