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Businesses Math Music Piracy The Almighty Buck The Courts

The Numbers Behind the Copyright Math 311

Posted by Soulskill
from the each-song-is-worth-all-the-songs dept.
TheUnknownCoder writes "The MPAA claims $58 billion in actual U.S. economic losses and 373,000 lost jobs due to piracy. Where are these numbers coming from? Rob Reid puts these numbers into perspective in this TED Talk, leaving us even more puzzled about the math behind copyright laws. 'Ignoring improbabilities like pirated steaks and daffodils, I looked at actual employment and headcount in actual content industries, and found nothing approaching the claimed losses. There are definitely concrete and quantifiable piracy-related losses in the American music industry. The Recording Industry Association’s website has a robust and credible database that details industry sales going back to 1973, which any researcher can access for a few bucks (and annoying as I’ve found the RIAA to be on certain occasions, I applaud them for making this data available). I used it to compare the industry’s revenues in 1999 (when Napster debuted) to 2010 (the most recent available data). Sales plunged from $14.6 billion down to $6.8 billion — a drop that I rounded to $8 billion in my talk. This number is broadly supported by other sources, and I find it to be entirely credible. But this pattern just isn’t echoed in other major content industries.'"
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The Numbers Behind the Copyright Math

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  • by mpoulton (689851) on Wednesday March 21, 2012 @02:23AM (#39423879)
    I haven't pirated music in about 5 years. I also haven't bought any CD's in that time, either. I have moved almost entirely to using Spotify, Pandora, and other subscription services for my music. Music I do buy, I buy electronically. I estimate I spent about 25% as much on recorded musical entertainment now than I did in the late 90's, during the heyday of the CD. This probably results in less revenue for the content owners, but that is not attributable to piracy. An industry's decline due to changing market factors is not necessarily a problem - it's just the natural way of things.
    • by TheLordPhantom (2527654) on Wednesday March 21, 2012 @02:33AM (#39423925)
      I have noticed the exact same thing with myself. I don't pirate, and haven't in years. Yet, I almost never buy music anymore. I do own a decent collection of music, but really, I find Pandora, Spotify, etc. to be a far more interesting sources of music, even at times more practical (as in I don't need to copy files from one piece of hardware to another). I honestly don't think that MPAA really can blame even the majority of the decline in sales on piracy. In my own anecdotal experiences, that is simply not the case. People's methods of listening to music are changing. Ultimately, the media companies will have to change the way the approach the gathering of revenue.
      • Re: (Score:3, Interesting)

        by Anonymous Coward

        Look at the gaming industry. They have modified their business models to battle piracy. However, not everyone likes it and especially on Slashdot you can see many people complaining about free2play games and everything moving online. That is the only choice companies have tho. So, if everyone continues pirating games (the actual piracy rate is about 90%, even with indie games), every game will soon be something like Zynga's facebook games, mmo's or some other multiplayer games. Personally I have no problem

        • by Lyrata (1900038) on Wednesday March 21, 2012 @03:08AM (#39424071)
          I think one of the main issues with F2P games and other new business models is the realities that come with it that gamers aren't used to. Take Heroes of Newerth (HoN), for example. That game used to cost $30, with additional content for sale after that. League of Legends (LoL), free from the beginning (supported by paid content), became wildly successful and easily eclipsed HoN in terms of revenue and player base. The interesting part is when HoN changed to a F2P model in response. The floodgates were open, if you will, to a much larger - and much different - player base. A huge influx of foreign players (in this case, foreign being non-US) quickly and fundamentally changed the community. There is now a great deal of acrimony between players based on their nationality and style of play (they are linked, by the way, Starcraft 2 being a prime example). The game and metagame underwent changes that weren't nearly as significant in the older paid model. TF2, as you mention, is another example. Open to anyone, the average skill level has declined (my opinion) and the focus of the players is strongly leaning towards collection and customization instead of the original, fundamental concept of the game. Whether or not this is a good thing is up for debate, of course. I feel that it's an effective business model and definitely has potential, but you can tell how I feel about some of what I perceive as downsides.
        • by TheLink (130905)
          Speaking of the game industry. Some people get better quality sound/music from games (e.g. Guitar Hero) than from the CDs the labels try to sell them .

          FWIW I think nowadays people have more different things to spend their money on. So unless incomes increase, there should be no surprise if they spend less on CDs or music.

          Especially if CDs are expensive for what you get compared to the other options.
      • by Skapare (16644) on Wednesday March 21, 2012 @03:51AM (#39424251) Homepage

        Actually, I have never pirated. But I have downloaded. What I did was use the downloads to preview the music. Then I discarded them. The only downloads I still have are ones from a few artists sites that were intentionally giving them away. I used the preview downloads to make decisions on which CDs to buy, and actually did buy CDs based on the previews. The rate was about 8%. That is, if I had bought a CD corresponding to every downloaded tune, that would be 100%. But most of it I didn't like, such as Electronica that had vocals injected somewhere (I much prefer instrumental music, but I do have some vocal music I like, too). The downloads helped me to actually buy CDs. Had the downloads NOT been available, these are CDs I would likely never have.

        That said, CDs are today very impractical. It's physically too large. No one carries a player anywhere near that size. The RIAA needs to get that clue bashed into their stupid heads and figure out better marketing. Still, I have bought a couple CDs in the past few years ... and "ripped" them so they could be a part of my collection. If I can't "rip" them I can't play them. If I can't play them, what's the point in buying them.

        Today, most of my music collection comes from Magnatune [magnatune.com], a site I do believe the RIAA has tried to shut down by means of illegal tricks, because it's a business model (not be evil) that they don't like. One of the great things with downloads from Magnatune is that I can modify and remix them. A lot of the music has a faster beat than I want, and I can actually slow it down in mplayer (I have my own wrapper program to do it). I can't do that with music played by some proprietary player program. And I doubt it hurts the feelings of the artists if I play their music in a different way or even remix it for my own playing as they get their bits either way and they can't hear how I might have corrupted their art.

        Sales of CDs has gone down for reasons very similar to the reasons that vinyl has gone done ... there's something better out there. Unfortunately for most big corporations, they didn't figure it out soon enough ... to actually give people what they want. The vinyl format was industry produced. The CD format was industry produced. Music files that can be downloaded was not, and they just can't stand that they didn't invent it.

        • by Bert64 (520050) <bertNO@SPAMslashdot.firenzee.com> on Wednesday March 21, 2012 @05:52AM (#39424741) Homepage

          I used the preview downloads to make decisions on which CDs to buy, and actually did buy CDs based on the previews.

          And this is exactly what the RIAA don't want, they would much prefer you to buy CDs, and then find out that you don't like them... If people can try before they buy, then they have to actually make an effort to produce decent music that people will like.

          • by arth1 (260657) on Wednesday March 21, 2012 @07:15AM (#39425159) Homepage Journal

            And this is exactly what the RIAA don't want, they would much prefer you to buy CDs, and then find out that you don't like them... If people can try before they buy, then they have to actually make an effort to produce decent music that people will like.

            Of course you can try before you buy. Record stores have headsets (or similar) and will let you listen before you make a decision. While you examine at the nice 12.4" cover.
            And if you only like one or a few songs, why, you can buy a single or a maxi instead.

            • by MickyTheIdiot (1032226) on Wednesday March 21, 2012 @07:37AM (#39425307) Homepage Journal

              However, with the fact that the RIAA has just a broad definition of "piracy" (a word that has been misused to the point it is now meaningless for any precise usage) this becomes the classic slippery slope problem. The *AAs can just as easily start to call *in store* usage piracy as well. It would been shooting their own foot, but they have essentially already shot their own foot with demonizing music lovers with piracy witch hunts.

              Copyright isn't about "intellectual property." It's about telling people what they can or can not do with property the legally bought or otherwise aquired. It's about controlling something that has made it out to the world.

        • by dwywit (1109409)

          I'd mod you up, but I've already commented.

        • by tao (10867)
          [RIAA] Of course it's still piracy if you delete if afterwards and buy it. If you downloaded it hundred times then RIAA^W The Artists will lose 100x the record cost.
        • by tlhIngan (30335)

          That said, CDs are today very impractical. It's physically too large. No one carries a player anywhere near that size. The RIAA needs to get that clue bashed into their stupid heads and figure out better marketing. Still, I have bought a couple CDs in the past few years ... and "ripped" them so they could be a part of my collection. If I can't "rip" them I can't play them. If I can't play them, what's the point in buying them.

          Yes. Even Steve Jobs had trouble. In the end, he had to use the pathetic Mac marke

        • by swillden (191260)
          You should check out murfie.com. You can buy a CD, but they keep the CD in their warehouse and you just download rips in the format of your choice. And you can often buy used CDs from other murfie.com users for far less than the normal price, and less than you'd pay for the same album on Google Music, Amazon or iTunes.
      • by justforgetme (1814588) on Wednesday March 21, 2012 @04:57AM (#39424505) Homepage

        Yep, I'm giving a monthly amount to somafm.com and get some great music from
        their channels. Another upside to this particular radio is that they use a lot of indie
        bands that operate disjointed from big distributors, so when you buy an album
        from those bands or an LP, you know your money actually goes towards the
        music.

        • by dwywit (1109409)

          Ha! - I was >>- this far from donating/subscribing to somafm when I heard some rap/hip-hop on their Indian/desi channel. Pity.

      • by dwywit (1109409)

        About 75% of my music listening time comes from live365.com (I subscribe) - the remainder comes from looking up old favourites (that I don't already have) on youtube, and the small amount of music that's played on radio - honestly, I'd rather plug in my daughter's ipod while in the car - she has my well-developed sense of taste :-) as well as an appreciation of modern pop.....

      • by Ihmhi (1206036) <i_have_mental_health_issues@yahoo.com> on Wednesday March 21, 2012 @06:57AM (#39425035)

        Yet, I almost never buy music anymore.

        I buy loads of it, both MP3s and CDs.

        And the RIAA doesn't get a cent, because all of the local bands I support are smart enough to realize that a) they don't need to get involved with the RIAA anymore to sell albums (if they don't give away the music outright) and b) they're going to make the vast majority of their money off of touring (which you can't really "pirate" anyway, scalping and counterfeit tickets notwithstanding).

      • by swillden (191260)

        I don't need to copy files from one piece of hardware to another

        Semi-OT, but I've found Google Music to be another nice solution (though one that does involve buying music). If you listen to music on PCs and Android devices it's really slick: Just upload all of your music (CDs, MP3s, AACs, etc.), up to 20K songs, and then it's all available on all your Android devices and any PC. For listening when you don't have a network connection you can have the Android app sync stuff to local storage ("make available offline"). When you do have a network, what's local vs what'

    • by Anonymous Coward on Wednesday March 21, 2012 @02:52AM (#39423999)

      I'd venture a guess that piracy is hurting them (slow down there, read the rest before you foam at the mouth and post a vitriolic reply), and that what they're doing to combat it is making it much, much worse, turning what would be an inconvenience into a death spiral.

      I don't recall the major labels being quite so vilified in my youth. Possibly there's an element there of the internet giving voice to malcontents who waste no time in airing the recording industry's dirty laundry, but I suspect the big issue people have with them in their anti-pirate tactics. Suing grandmothers is never good PR. Nobody likes DRM. Laws that shore up antipiracy measures are widely loathed by anyone who knows much about them - see SOPA/PIPA or the DMCA.

      What does this have to do with piracy? People like free shit, and dislike feeling guilt. People can pirate music for free (we'll stick to just music, since TFA is about the RIAA), but feel guilty about the artist. They assuage their guilt by familiarizing themselves with the evils of the recording industry and "stick it to the man". And by reminding everyone who'll listen that the artist hardly sees a dime from album sales anyway, unless they're already a big name. Guilt gone, music free.

      My evidence for this statement is that when the artist is separated from the industry, when the pirate CANNOT pretend to be Robin Hood, then the musician actually can make a living selling their music online, DRM free. See Jonathan Coulton (who'd never make it in the industry) and Nine Inch Nails "Ghosts" album (which were actually made available for free, with a "please pay us if you like our music" option that made Reznor more money than he gets from his regular album sales).

      Watch now, as the entire thread below this comment devolves into exactly the same guilt deflecting "but they're evil" roundabout justification from absolutely every retard who didn't make it as far as this last paragraph. Or maybe slashdot will pleasantly surprise me (hahahhahaha).

      • by bzipitidoo (647217) <bzipitidoo@yahoo.com> on Wednesday March 21, 2012 @03:35AM (#39424189) Journal

        People like free shit

        Your cynical view of humanity is not accurate. There is such a thing as altruism. Charities somehow manage to persuade people to donate. There are actually many people who do NOT like free shit, because we don't believe it really is free, we're suspicious there's some catch.

        You also attribute piracy to the desire to "stick it to the man". Yes, but that's not the whole story either. I am offended that these psychopathic dinosaurs insist on wasting all kinds of resources and then insist on PASSING THE COST OF THAT WASTE ONTO THE CUSTOMERS. We should pay all this extra money to cover the costs of producing millions of plastic disks and delivering them to thousands of bricks and mortar retail locations, just so those miserable bastards can feel more comfortable that all this extra and needless friction makes piracy more difficult? When we can have the same music delivered via the Internet for a fraction of the cost and time? Why should anyone choose to pay for someone else's gross stupidity? Because if we refuse to do it their way, they try to force and browbeat us into it, that's why. They trash us all as evil pirates, threaten to sue us all, keep cooking up extremely offensively stupid legislation and laughably pathetic DRM schemes, lie through their teeth about the amount of piracy and damages allegedly suffered, cheat artists, manipulate the public with things like Payola, and seriously think they have the moral high ground and the justification to do all this and almost any other reprehensible act to preserve their very dead business model. They should have been ashamed that Sony tried to rootkit PCs, instead they defended it! They pay lawyers to go after the very most vulnerable and helpless citizens. If they had no power, we could just ignore them. But they're old and established, and still have enough power to hurt a lot of people. The revolution is ongoing, and they're throwing themselves against the wall. They're acting like Capt Bligh-- "it's mutiny I tell you, mutiny", only they say piracy in place of mutiny. Don't point the finger at us for rebelling, point the finger at them for causing the whole thing, for calling us all thieves and rebels whether or not we really are.

        • Re: (Score:2, Insightful)

          by Anonymous Coward

          People like free shit

          Your cynical view of humanity is not accurate.

          Yes, it is accurate, and there's nothing cynical in his statement.

          There is such a thing as altruism. Charities somehow manage to persuade people to donate.

          People donate for a few different reasons. Yes, some people are actually just nice and like giving back when they can. But most people who donate do it to deflect guilt, to look good to other, to get a tax break, or other reasons which are more selfish when you really look at it.
          But that has absolutely nothing to do with people liking free shit.

          There are actually many people who do NOT like free shit, because we don't believe it really is free, we're suspicious there's some catch.

          Right, you're suspicious because you don't think it's free, and you want free shit not shit with hi

        • by AmiMoJo (196126)

          Your cynical view of humanity is not accurate. There is such a thing as altruism. Charities somehow manage to persuade people to donate.

          This is diving off into philosophy and psychology now but there are many reasons people donate other than altruism. When we see starving kids on TV it makes us unhappy and creates feelings of guilt which donation alleviates. There is also the fact that giving money to a good cause validates a person's life to some extent.

          In my case there is some self interest too because both my parents had cancer, so I figure if I give money to cancer research it might help me one day. I give money to cat charities too bec

        • by tibit (1762298)

          People like free shit

          Your cynical view of humanity is not accurate. There is such a thing as altruism. Charities somehow manage to persuade people to donate. There are actually many people who do NOT like free shit, because we don't believe it really is free, we're suspicious there's some catch.

          Sorry but liking free shit is orthogonal to being altruistic. I think myself of reasonably altruistic but I like some free (or cheap) stuff nevertheless. I don't see where's the problem, except that you made it up.

      • by WillKemp (1338605)

        I don't recall the major labels being quite so vilified in my youth.

        I dunno how old you are, but they weren't exactly popular in my youth! The Sex Pistols song "EMI" kinda embodied the way people felt about them in the 70s.

        • by Black Parrot (19622) on Wednesday March 21, 2012 @04:14AM (#39424317)

          I don't recall the major labels being quite so vilified in my youth.

          I dunno how old you are, but they weren't exactly popular in my youth! The Sex Pistols song "EMI" kinda embodied the way people felt about them in the 70s.

          And Pink Floyd, "By the way, which one's Pink?" And others.

          However, I think they became much more reviled when the technology for production and distribution made them utterly useless middle-men (compared to the LP era), who insisted on maintaining their stranglehold on the market and their profits despite changing times.

      • by pxc (938367)

        There's a problem with your post in that you assume that music pirates only use the irrelevance of music sales to revenue for most artists as a dishonest rationalization. All of the behavior/psychology described in your post could be restated simply as ‘people are more interested in seeing through the success of the artist than they are in supporting the success of some salesman’. They may not necessarily feel any guilt about piracy to begin with. The younger generations certainly don't. The RIA

      • by Bert64 (520050) <bertNO@SPAMslashdot.firenzee.com> on Wednesday March 21, 2012 @05:59AM (#39424763) Homepage

        Approach it from another point of view...

        As you point out, people hate DRM and the various laws being pushed by these groups...

        Any money you spend on buying music from RIAA affiliated labels will be used to push the above... How can you justify purchasing music, knowing that your money will be used against you in this way?

    • by Znork (31774)

      I buy more music than ever by using emusic, I just don't buy anything associated with the RIAA corps. On average I spend about four times as much per month these days.

      Either way, even if the lies were true, disposable income spent on copyrighted entertainment means more spent on other activities as well as the converse - money spent on copyright cost jobs in other industries.

    • by Serpents (1831432)

      An industry's decline due to changing market factors is not necessarily a problem - it's just the natural way of things.

      I think this particular industry is not declining due to changing market conditions - after all they change in all the industries all the time. The difference is most other industries adapt to market, while the entertainment industry tried to force the market to adapt to its model. With rise of digital media (lossless copies) and fast internet (instant worldwide distribution) they lost control of their distribution channels. Now they're trying to change the situation by lobbying for crap like SOPA/ACTA et a

    • by Moraelin (679338) on Wednesday March 21, 2012 @06:22AM (#39424827) Journal

      Actually, here's another idea for where at least a part of those 8 billion are coming from. Now probably none of them accounts for 8 billion by itself, but I do believe it adds up.

      1. Just the economy and more importantly how it impacted culture. In 1999 it was in the middle of a bubble, and everyone who got some of that money was flaunting it somehow. Buying stuff to show you can was expected.

      Nowadays we're still on the tail curve of a depression, where a bunch of people lost their homes, unemployment is still very high, a bunch of people ARE having less disposable income (the median family income didn't follow the GDP per capita, so pretty much everyone south of the median is getting shafted) and most importantly this creates uncertainty for the future. It's looking like a lot less of a good idea to blow all your money on entertainment and luxuries when you're not sure if next year you'll be able to afford the essentials (medical care included) and/or keep your home.

      A bunch of other industries are feeling the same pinch, so I fail to see why the RIAA would think they're exempt from it and should see the same income as at the apex of a bubble and of economic optimism, if it weren't for those pesky pirates.

      2. Less free time for that entertainment. We just had a front page article yesterday about how overtime demanded is steadily climbing.

      3. Competing with other forms of entertainment. You can see the movie industry and TV having the same problem. Less people are going to the movies when they can play WoW or TOR or whatever for a month instead. And it's not just games. Social networks for example also sink a heck of a lot of the time left after that overtime.

      It's stuff that was still regarded as (borderline) stuff for socially dysfunctional nerds in 1999. The idea that if you play Ultima as an adult you're probably one of those 40 year old virgins living in mom's basement was flung around by many a lot more seriously than nowadays.

      Internet access also was spotty and slow, and frankly there wasn't all that much to do on the Internet, compared to nowadays.

      The whole culture was more favourable to sitting and listening to a record as a way to pass the time, while nowadays it's at best something you use as background music while doing something else. And not just while you sit at home but also...

      3. Share of the MOBILE entertainment. Frankly there was not much more you could do in 1999 on the road than listen to some music on your walkman or CD player or, if you were really high tech, MP3 player. Sure, you could use a gameboy, but see again, a lot saw that as stuff just for kids, and it also didn't help that most of those mobile games WERE made for kids.

      There was a lot of music bought just to have something to listen to while you're on the bus or train or plane.

      Nowadays even kids have phones capable of doing much more than that, including again Internet stuff. That's got to mean less albums you need to buy just to keep from being bored out of your skull on the road.

      Which in turn sets the stage for the next point...

      4. A different culture among the youth. Which, honestly, was always a big target demographic there.

      It used to be that music was a major topic in high school, and buying the same records that the rest of the lemmings were persuaded by marketing hype to buy, was the way to fit in. There were a lot of Britney Spears albums (chosen as an example because she had her first album in 1999) and whatnot bought just to fit in with the cool kids who were listening to Britney Spears.

      And don't kid yourself if you were all counter-culture, the same applied there. There were a lot of The Cure and Sex Pistols albums sold to kids who wanted to fit in with the goth and respectively punk gang. We were so independent and defying convention and totally unlike the rest of the sheeple, and whatnot... that we bought the exact same clothes, music, etc, as a group we were trying to fit in. Yeah, different and independent my ass.

      Nowa

  • Pun intended btw.

    Pirating music maybe part of the drop but there are many other factors. The world has changed, people play youtube music at parties now.

    • by wierdling (609715)
      Ah, but don't you know, all YouTube music is pirated. Even the butterflies.
      • Ah, but don't you know, all YouTube music is pirated. Even the butterflies.

        I've been wondering why YouTube apparently isn't being hammered with take-down notices. You find a published song or bootleg recording, watch it, and it's still there several years later.

        Maybe the labels tacitly acknowledge that it's good advertising.

  • by ATMAvatar (648864) on Wednesday March 21, 2012 @02:27AM (#39423897) Journal
    Clearly, it's coming from all the economic losses suffered at the hands of DRM and additional copyright enforcement.
  • Taxes (Score:4, Insightful)

    by Anonymous Coward on Wednesday March 21, 2012 @02:27AM (#39423899)

    I'd like to see these losses reported to the IRS.

  • the quality dropped (Score:4, Interesting)

    by Anonymous Coward on Wednesday March 21, 2012 @02:28AM (#39423907)

    While I have _a lot_ of vinyl from the 60's and 70's I slowed down buying at later years. Now the CD recordings are unpleasant to listen because of loss of dynamic range (loud mastering) I don't buy them. One reason for the growing sales of vinyl. I don't download either. If the music industry can come up with artists and quality of the past I will not buy anything (new). I believe I am not alone on this.

    • Re: (Score:3, Funny)

      by Anonymous Coward

      No, no. You just have to buy the latest audio equipment with golden cables and this stuff. This brings back the full dynamic range of your audio experience.

  • It's not piracy (Score:5, Interesting)

    by Hackysack (21649) on Wednesday March 21, 2012 @02:41AM (#39423955)

    There is a fundamental shift in the underlying business models. (Thank goodness)

    a) No longer is the only source of getting a song, buying an album. Now, if you like a song, you buy the song for 1.29, rather than the album for $20 from HMV or wherever.
    b) Social media and word of mouth trumps advertising and corporate presentation. It's much harder to convince your audience to spend the $20 for the album with 1 mediocre song, and it's much easier for your audience to talk amongst them selves and realize that the album isn't worth it.

    c) Thanks to the digital age, the industry is shrinking. Same for newspapers.

    A large portion of the size of the industry was the overhead necessary to distribute physical media. I'm not sure what %, but I'm certain it was significant. This business value is gone and/or going now. What you're left with is the value of the purely creative side, some marketing, some overhead.

    If the value of a newspaper in 1990 was $100M, and $60M of that could be attributed to the capital & overhead required to actually produce and deliver the newspaper; now it's 2012, and after inflation the same company finds itself worth $40M because they've lost the need to maintain the infrastructure to do the physical delivery. The same is true for Music (tho not yet for movies, although coming) A very large portion of the value of a music distribution company was the distribution part. That's gone now, thank goodness.

    We just need the industry to adapt to the new mode where creation is harder than delivery, because right now I feel like we're not being served well by record company A&R.

    But that's just me

    • by AdamWill (604569)

      "a) No longer is the only source of getting a song, buying an album"

      I'm always vaguely bemused at this canard, which is constantly cited over and over by both sides of whatever argument you happen to be having at the time.

      'The only source of getting a song' has _never_ been buying an album. At least in by far the most common case, which is 'wanting to buy that popular song that you keep hearing on the radio'. All those songs on the radio are called 'singles'. And you've _always_ been able to buy them...as s

      • by mojotooth (53330)

        Who said we're only allowed to like the songs that the record companies release as singles?

      • Ok, what if you wanted a song that wasn't released as a single? What if you wanted the album version instead of the single version because it was edited to fit within 3 minutes and you really liked the long guitar solo?
      • Until recently, when digital distribution changed everything, singles massively outsold albums. I'm just not sure where this phantom image of millions of sad people buying entire albums just to get single tracks comes from, because it's never actually been the case.

        Possibly the Slashdot demographic isn't the run-out-and-buy-the-latest-top-40-hit crowd. I probably bought one single for every 10-20 LPs I bought.

        And never a Super-Dooper-Deluxe-Remaster of a single, though I'm embarrassed to admit that they suckered me into buying a lot of SDDR albums.

        • Re:It's not piracy (Score:4, Interesting)

          by amck (34780) on Wednesday March 21, 2012 @05:27AM (#39424651) Homepage


          Possibly the Slashdot demographic isn't the run-out-and-buy-the-latest-top-40-hit crowd. I probably bought one single for every 10-20 LPs I bought.

          Is there still a Top40? I mean, that people can name musicians on, rather than a manipulated sales list up on a website somewhere?
          Once upon a time, "Top of the Pops", giving the top40, was one of the biggest programs on BBC TV. Ok, it lost its market to MTV,
          but really it died when the labels dropped their midlists in the late 1990s -early 2000s. They dropped over 80% of their _profitable_ artists, concentrating on the few big earners. Now, there aren't enough new songs out there to stage a Top40 show every week, least one that people want to watch (rather than fill the hours on MTV).

          If RIAA gave me vouchers for 4 new albums from 2011 or 2012 for free, I couldn't name any music I would want.

          So, I go to gigs and buy CDs there if the band is any good. RIAA should be ashamed of themselves for how bad a job they are doing at promoting and selling music. Their top-5 only model collapsed on them, and they should stop blaming piracy.

          Now, I may not like X-factor, etc. but there would have been _something_ out there. I used to cringe at some of the "oldie" material that made the Top40 in Ireland etc when I was growing up, but it was bought by people. The equivalent music isn't there for someone who doesn't want the top 3 songs that make RIAA the most profit.

      • Re:It's not piracy (Score:5, Insightful)

        by thegarbz (1787294) on Wednesday March 21, 2012 @04:23AM (#39424371)

        Except singles weren't released for $0.99. No you couldn't just buy the song. You had to buy the Single, which had 5 different versions of the same song for about half the price of the entire album if the single was still in the charts, and still about $5 if it was not.

        There's nothing good to be said about the overpriced distribution methods the industry is trying to hold on to. The fundamental problem is that these like many things were priced as high as the market would bare, however the market changed, as did consumer expectations and the price did not.

        • by gl4ss (559668)

          yea 10-15 euros for a single or 15-15 for an album...

          very few singles sold in 2 euros range. mostly punk.

      • Re: (Score:2, Informative)

        by Anonymous Coward

        Until recently, when digital distribution changed everything, singles massively outsold albums. I'm just not sure where this phantom image of millions of sad people buying entire albums just to get single tracks comes from, because it's never actually been the case.

        Yes, actually that's been the case for quite a while. I worked at a major music retail store in the 90's so I have a little bit of an "insider" view of this. First, keep in mind that none of what I'm saying is 100% universally true, there are always exceptions.

        Most of the time, a song will be chosen for "placement" on the Top 100 charts. This is done by adding the song to the mandated radio playlists, which pushes consumer interest in the song. At the same time, a "single" of the song would be released ahea

      • Not all songs are released as singles. You must be a 12 year old Justin Bieber fan to not know that.

  • Perhaps the people who stopped buying music because it was available free through Napster started spending more money on other entertainment industries, since cable tv, movie sales, box office sales and pretty much everything except music grew much quicker than historic figures would have predicted.

    So maybe RIAA lost a few billion. MPAA looks like they have gained more than what was lost.
    • by Zocalo (252965) on Wednesday March 21, 2012 @03:46AM (#39424237) Homepage
      The movie studios (the MPAA & RIAA are just lobbying bodies, they don't actually make any money off media sales) have almost certainly eaten into the profits of the music studios with the advent of the market for home movies to buy/rent. The same can also be said of the video gaming industry, which didn't exist until the early 1980s and only really started making serious money by perhaps 1985 or so. OK, the video and game industries have probably also grown at the expense of other entertainment businesses - cinemas, arcades, bars, bowling alleys, etc. - but I wouldn't be at all surprised to find a correlation between the growth of movie and game sales and the music industries post-1973 decline. They are all competing for the same disposable income, after all.
  • I hate seeing compression artifacts in so-called high def video - it causes me to think about the display rather than the story. The same thing happens to music when processed with Autotune. To my ear, it sounds like a machine - not a human. The same thing happens with poorly remastered CDs. I've pretty much given up buying new CDs or any modern digital music from big companies because the sound grates my ears.

    • Don't take this personally but I wonder if this is similar to what happens in Autistic people. An autisic brain interprets it sensory input at face value whereas a "normal" brain interprets it alongside what "should be" and tosses more of the noise away, making it literally non-existant to the owner of the "normal" brain. As the owner of a "normal" brain my comprehension of the written word is pretty good but my proof-reading sucks because my brain regularly auto-corrects mistakes and fails to inform me. As
  • Jobs and Profits (Score:2, Interesting)

    by Anonymous Coward

    The argument that piracy results in job losses is bunk on its face.

    Imagine that the MPAA is right, and millions or even billions of dollars really are lost due to piracy. Now imagine that piracy doesn't happen and that all that money goes where the MPAA says it should. The companies of the content industry now have extra billions of dollars in revenue and profit.

    Where does this money go?

    Do they give all their workers a raise? No, they're not a charitable organization. As publicly-traded corporations, it wou

    • Re:Jobs and Profits (Score:4, Interesting)

      by Pentium100 (1240090) on Wednesday March 21, 2012 @03:37AM (#39424191)

      A better question is where the money comes from.

      I mean a 160GB MP3 player can hold about 40k songs, so that's $40k if you buy them on itunes. So, the guy with a mp3 player full of pirated music:
      1. Has spare $40k in his drawer (or safe),
      2. Has spare $40k in a bank account,
      3. Bought something else with those $40k.
      (or the money was divided between the three options).
      So, if it's #1 then great - more money in the economy. If he takes te $40k from his bank account, then it's a loss for the bank (not a big one though). If the guy decides to fill his mp3 player with legal music instead of buying something else then it's a loss for the whatever industry that has his money now (when he decided to pirate the music and buy something else instead).

      • by Skapare (16644)

        If the RIAA ran banks, they would be whining that people are withdrawing money to buy stuff.

      • Very good point. Of course, the bank won't just be sitting on the money, they'll be investing it. Some of it in mortgages, but a significant fraction in stocks and shares. This means that option 2 means pulling some fraction of $40K out of investment in another industry, which makes it harder for other companies to grow and reduces the number of people who can afford to spend $40K on music.
  • Not due to piracy (Score:5, Insightful)

    by metacell (523607) on Wednesday March 21, 2012 @02:56AM (#39424021)

    The decline in record sales has nothing to do with piracy. It's roughly outweighed by an increase in sales of downloadable music. The only difference is that the revenues end up with other companies such as Apple (or directly with the artists), instead of with the record companies.

    Really, this is nothing new. Just comparing the raw numbers is likely to mislead you if you don't have knowledge about the music market.

  • by Undead Waffle (1447615) on Wednesday March 21, 2012 @02:59AM (#39424035)

    I buy a decent amount of music. I'm just finding that most of the stuff I listen to is not on an RIAA label and tends to be from other countries. The RIAA stuff I do listen to are bands that have been around a long time (like Judas Priest and Iron Maiden). The internet made it possible to find good music from all over the world rather than buying whatever is on the radio, and it turns out people on the other side of the world aren't as eager to move to Hollywood to get screwed over by a big record label.

  • by Opportunist (166417) on Wednesday March 21, 2012 @03:01AM (#39424041)

    Let's take a look at the record industry's main customers: Teenagers and young adults. I hope it's no secret that the people who buy the most music are in the 14-25 age bracket.

    Now, what did teenagers have to spend their dough on before the 2000s? Well, I was in that precious age bracket just before Napster came into existence, so maybe I may talk about it: Music, fashion and ... umm.... I guess computers counted only if you're a geek. Music and fashion WAS pretty much what teens blew their money on before the millennium rolled over. Throw in a few movie tickets and the odd night out with friends in the local teen bar (yes, such things exist in Europe where you may drink before you may drive, but I digress) and you got what teens wasted money on.

    Fast forwards to the present. Now, I'm not a teenager anymore, but I "fortunately" have to suffer from having contact to them. Sidenote, never volunteer for anyone. But I digress again. So I see what they have to pay today. Cellphone bills, online gaming, gaming in general (mostly console outside of WoW, actually), iPod accessories (ok, they double as fashion, actually), ... you get the idea.

    In other words, the companies that vie for the teens' money multiplied. It's no longer Diesel jeans and Sony music alone. I don't want to claim that this, in turn, doesn't make them copy music instead of buying it ... but then again, so did we when we were young. Ok, it was tape-to-tape copying rather than downloading it, aside of that, well, you cut corners where you can when your money is tight. And there's hardly a teen who isn't short on cash constantly.

  • by future assassin (639396) on Wednesday March 21, 2012 @03:02AM (#39424043) Homepage

    thinking that because they created it everyone should be buying it and because it didn't sell now they have the "internet pirates" to blame. Maybe they should talk to Ford about the Edsel. Every second movie being a remake and every pop song sounding the same has nothing to do with people not wanting to buy the shit and just download it to see how horrible it really is.

    I use to buy tapes and cd\s blindly because I wanted that new album or wanted to discover something new just to find out it was shit work which I just wasted money on. This was improved a bit in the late 90's when some record shops let you listen to the cd's before you bought them. At that time my hit to shit ration improved but by then Napster appeared and I was set to save money and only buy good works. Unfortunately this led to downloading madness which revealed just how bad lots of the music out there was.

  • Boycott (Score:5, Insightful)

    by thestuckmud (955767) on Wednesday March 21, 2012 @03:05AM (#39424049)
    To Whom it may concern,
    Please count the lack of revenue you are receiving from me in the boycott category. I do not pirate music, but I'm sending another dime to companies that gang up to alienate me.
    My grudge goes back a ways - highlights include: Lying to me about CD price hikes in the '80s; taxing my computer media in the '90s, intentionally distributing malware laden CDs in 2000, and now the outrageous legislative attempts.
    Sincerely,
    One bitter ex customer.
    • highlights include: Lying to me about CD price hikes in the '80s

      Don't forget the early period panic-mongering, "there's only going to be one limited run of your favorite album on CD, so you'd better buy it while it's on the shelves".

  • by future assassin (639396) on Wednesday March 21, 2012 @03:07AM (#39424057) Homepage

    consumers just gained a way to even the playing filed with not getting stuck with worthless music and movies. Now that money has shifted to help out other industries and created new jobs in those. Unless that money is taken out of the country by corporations using off shore accounts and tax heavens that money went back into the countries economy so nothing was lost.

  • One word (Score:3, Insightful)

    by vikingpower (768921) <exercitussolusNO@SPAMgmail.com> on Wednesday March 21, 2012 @03:10AM (#39424081) Homepage Journal
    Correlation is not causation.
    • Correlation is not causation.

      Are you sure the drop in revenues didn't cause piracy?

    • One word? What kind of math do you use? I count 4 words using traditional math and my fingers, -1.702e^9 words using copyright math and excell, and 11 words (including those in hidden dimentions) using a popular version of string theory.
  • You take (sales in 1999) - (sales in 2010) = $8B, the loss in sales for one year, and compare it to $58B, which is over an unspecified time period. This comparison does not make sense. Maybe it's more clear in the video, but I didn't watch it, because I can't skim it.

    I'm no fan of the recording industry, but come on, don't be disingenuous about this.
  • did you know that, this dude is married to Morgan Webb of Tech TV and G4 fame ? :-)
  • The main problem with music industry figures seems to be that they estimate how much piracy there is and then claim that as a loss. However, that's based on the flawed assumption that if people weren't pirating the music they'd be paying for it - which they wouldn't, they'd just go without it most of the time. Just because someone downloads a song for free doesn't mean they would have bought it if it wasn't available for free. A lot of people who download pirated music also buy music. There's only so much m

  • There are definitely concrete and quantifiable piracy-related losses

    How do we know these losses are piracy related? I tend to think a lot of it is because no-one has to buy an album they don't want just to get two or three songs. Here in Australia that means a $10-$15 song drops to to $1.50. Market correction related losses?.

    I personally am spending more than ever on music but it's all from Beatport etc. I'd be surprised if the RIAA is counting much of that money.

  • Uhm, yes, but... (Score:5, Insightful)

    by Black Parrot (19622) on Wednesday March 21, 2012 @04:08AM (#39424307)

    The Recording Industry Association’s website has a robust and credible database that details industry sales going back to 1973, which any researcher can access for a few bucks (and annoying as I’ve found the RIAA to be on certain occasions, I applaud them for making this data available). I used it to compare the industry’s revenues in 1999 (when Napster debuted) to 2010 (the most recent available data). Sales plunged from $14.6 billion down to $6.8 billion — a drop that I rounded to $8 billion in my talk. This number is broadly supported by other sources, and I find it to be entirely credible.

    OK, you find it credible twice. Any particular reason?

    Also:

    Are you claiming that Napster has something to do with this? If so, how much, and how do you know?

    How do you take the economic melt-down into account?

    How do you account for aging Baby Boomers who are losing the ability to justify shelling out for yet another remastering of LPs they bought 40 years ago?

    Why calculate on revenues rather than profits?

    How much of those revenues are the inherent cost of pressing a CD and putting it in a plastic box, which was *much* more common back then?

    Who's losing jobs? Are musicians giving up because they can't find a gig and a sharecropper contract? Or do executives just need to hire fewer people to count their money?

    These raw numbers are meaningless.

    • No, these raw numbers are not meaningless. If, as the RIAA reports, record sales have only fallen (for whatever reason) $8 million since the advent of Napster (the beginning of digital download piracy), then it is not possible that RIAA members have lost $58 million a year to piracy. Which is the point being made in the summary.
  • It's a mistake to assume that the $8 billion drop in music sales is entirely due to piracy. DVDs appeared in 1998 and by 2004 DVD sales were $14 billion. VHS sales were never that high so much of that money must have been coming out of other entertainment spending. I think a lot of people stopped buy so many CDs when they started buying DVDs.
    • by MadKeithV (102058)
      What didn't help is that a movie DVD on the whole was (and probably still is) cheaper than most CDs to buy. DVDs have more content, the original content is much more expensive to produce, and yet a DVD movie costs less money to buy than a CD. For any economically savvy person that was a clear indication that we were being gouged on CD prices.
  • I believe that since music became digital people only buy it once. I have some albums in Vinyl, 8-track, cassette and CD. Once I went all digital though I only buy music once and then have it forever. I bet I've bought some albums on cassette 3 or 4 times as tapes got lost or deteriorated and the same with Vinyl LP's. I know I"ve bought Led Zeppelin's Physical Graffitti album at least 10 times in various types of media over the years. It's on my server now and I"ll never have to buy it again.

  • by nukenerd (172703) on Wednesday March 21, 2012 @05:48AM (#39424719)
    I believe it is similar in the USA, but in the UK the story went like this :-

    1) First the motorcycle manufacturing industry was in trouble. The Government told them to f#@k off.

    2) Then the electronics industry was in trouble. The Government told them to f#@k off.

    3) Then the shipbuilding industry was in trouble. The Government told them to f#@k off.

    4) Then the mining industry was in trouble. The Government told them to f#@k off.

    5) Then the railway equipment and train building industry was in trouble. The Government told them to f#@k off.

    6) Then the car making industry was in trouble. The Government told them to f#@k off.

    7) Then the steel making industry was in trouble. The Government told them to f#@k off.

    BUT

    8) Then the entertainment industry was in trouble and the Government said "OH MY GOD WE CANNOT ALLOW THE ENTERTAINMENT INDUSTRY TO FAIL! We must give them tax breaks, subsidies, knighthoods and do everything we can to keep this luvvly bunch of luvvies in the manner to which they are accustomed!"

    I put this down to the fact that the vast majority of politicians are "humanities" people. They have degrees in history, English, fine art, psychology, PPE; hardly ever science and technology. They (like most people) see entertainers face-to-face, they are charmed by them. Unlike ships, cars and electricity which are "just there".

    So politicians love the entertainment industry, which is why its pronouncements are so dangerous.

    PS: Some might point out that Mrs T , about the worst offender in this, had a science degree. Very unusual for a politician. There is a different explanation for her. Having changed careers she wanted to justify it by destroying what she left behind, and getting her own back for being the junior in the lab etc.

    Perhaps the lesson is that there can never be intelligent support for technology in government, except in wartime or for fads like wind generators, the workings of which any humanities guy thinks he can understand more than a nuclear power station for example
  • So music sales have gone down, why is piracy automatically to blame?

    Perhaps people consider all the manufactured pop music coming out these days trashy?
    Perhaps the current state of the economy means people have less disposable income to spend on cds?
    Perhaps people simply have something better to spend their money on?

  • by Sique (173459) on Wednesday March 21, 2012 @06:08AM (#39424795) Homepage

    The underlying problem is, that creating (nearly) perfect copies of a work used to require a high investment first in the copying machinery, be it the printing press or the vinyl press or the polycarbonate press, and then in creating the master copy, be it a proofread typesetted one or the matrix for pressing vinyls or CDs. But the actual copy, once the copying machinery was installed and the master copy created, was cheap.

    Thus there was a business model in investing heavily in copying machinery and then look for works of which a large number of copies could be sold. The only risk was that one created a master copy of a work which didn't sell. Everyone was thus looking for works which were already bestselling and created their own copies of them. Because of that the copying enterprises which first started to copy a work seeked protection from competition, thus the institute of copyright (or imprimatur) was installed already at the end of the 15th century. Before one could start selling copies, one had to get the permission from the authorities to do so. Only in the 18th century, with the Statute of Anne in 1710, it was recognized that not only the people investing in copying equipment and creating master copies should profit from a work, but also the actual creators, which then could either be hired to create the work or license their own works for copying.

    Now the business model was complete. It was founded on the fact that creating a single copy of a work was nearly as difficult as creating hundreds and thousands of them, thus people creating multiple copies could always undercut people creating a single copy in price, making it thus attractive for nearly everyone interested in a copy not to copy themselves, but buy a cheaper copy from a copying enterprise. And it encouraged people creating works which were easily to copy and thus being sold in large numbers. Finally a legal framework was created to fend of competitors by making it unattractive to invest heavily in copying equipment and copying exactly the same works that were already copied by others.

    But this whole business model of being able to create cheaper copies than those interested in actually owning a copy is shaky, because now the investment necessary to create a single copy is less than go out shopping for a copy. Copying equipment is cheap, $100 will be sufficient, and can be used for as many works as one likes. Every copy can be a master copy. The big price advantage of the guys with the copying machines is gone. And thus also the main income stream for creators of copyable works breaks down. They had a quite strong negotational position as long as there were only a few entities able to create affordable copies, because they could sell exclusive copyrights to only one of them and were able to police all the others trying to create unlicensed copies. Now they have to basicly negotiate with each single person interested in a copy, because each person can create the copy for themselves, and policing unlicensed copies is nearly impossible.

    It might be, that the business model of creating an easily copyable work and then selling as many copies as possible is gone forever, because creating copies itself is no longer a business model. There is no compelling reason anymore for the consumer to have the act of copying done by someone else, because everyone can create perfect copies for cheap.

  • So he tries to test the claims of RIAA with data bought from them and we are supposed to believe him that those numbers "can be trusted"?

  • Losing Money? (Score:5, Insightful)

    by whisper_jeff (680366) on Wednesday March 21, 2012 @07:21AM (#39425197)

    So, claims are regularly made suggesting that the music industry is failing, usually followed by claims that tougher laws are needed to protect the hard working people in the music industry.

    Small problem - it's not true.

    The music industry is not in as bad a situation as claims would suggest. Here are some interesting statistics:

    Music publishing revenues are on an upward trend.
    Worldwide Music Publishing Revenues (2006 - 2011)
    http://grabstats.com/statmain.asp?StatID=69 [grabstats.com]
    $8.0 billion (2006)
    $8.3 billion (2007)
    $8.6 billion (2008)
    $8.9 billion (2009)
    $9.1 billion (2010)
    $9.4 billion (2011)

    Live music (concert) revenues are on a upward trend.
    Worldwide Live Music / Concert Revenues (2006 - 2011)
    http://grabstats.com/statmain.asp?StatID=70 [grabstats.com]
    $16.6 billion (2006)
    $18.1 billion (2007)
    $19.4 billion (2008)
    $20.8 billion (2009)
    $22.2 billion (2010)
    $23.5 billion (2011)

    The entire industry's revenues (*) are on an upward trend.
    Worldwide Music Industry Revenues (2006 - 2011)
    http://grabstats.com/statmain.asp?StatID=67 [grabstats.com]
    2006 ($60.7 billion)
    2007 ($61.5 billion)
    2008 ($62.6 billion)
    2009 ($65.0 billion)
    2010 ($66.4 billion)
    2011 ($67.6 billion)

    * The "entire industry" is defined as "Revenues are for record labels, music publishers, recording artists, performing artists, composers, concert venues and merchandise, companies; includes revenues from sales of physical recordings, digital music services (online and mobile), music publishing and live music."

    What is most interesting about these numbers is it supports what I have felt for a long time - the major players in the music industry have realized that CD sales are nice but that's not how to get rich - the big money (almost 2.5 times the money...) is in concerts. That is why acts like 'N Sync and Britney and Beiber and U2 and Lady Gaga and damn near everyone are regularly on tour. They've realized that people are spending more and more on actually going to the concert to experience the music. They realized that the be financially successful means touring a lot. CD sales makes one wealthy but a concert tout makes one rich.

    These numbers show that the music industry isn't failing. It isn't even shrinking. The _industry_ is growing, across the board. Yes, there are individual companies that might be suffering and there are individual bands that are suffering and there are probably specific geographic regions that are suffering but the industry, as a whole, is thriving - it is growing.

    One thing I do agree with the music industry, however, is that the internet is a big reason for this - we just disagree on the direction their profits are headed...

  • Kids have changed (Score:5, Insightful)

    by clickclickdrone (964164) on Wednesday March 21, 2012 @07:33AM (#39425285)
    When I grew up, everyone I knew as music mad, we spent every penny we could on vinyl and later CDs. It was the soundtrack to our lives and it meant something to us. We bought the best HiFi we could afford to play it and would just sit in each others bedrooms playing our new stuff and reading lyrics etc.

    Fast Forward to 2012. All my nephews, nieces and they friends barely care about music. It's just something they dance to in clubs or listen to on a tinny mobile phone speaker. None of them have a HiFi, none buy any music, none care. As someone said, in the rare case they want to hear a track, they'll fire it up on YouTube.

    Most older people have all they want, having bought the same albums on LP, CD and maybe SACD. They rarely buy anything new.

    IMO, the reason music sales are down is because the world has changed and NOT because of piracy. Music habits have changed.
    • by couchslug (175151)

      We have computers now and music is incidental. Before PCs life was boring and music filled that space.

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