So, reading the BBC, and the record industry position on illegal file sharing.
The long and short of it is, the record industry association is shocked that illegal file sharing isn’t decreasing. Though, given the economy and the expansion of broadband, I think they should probably just be happy it isn’t increasing exponentially. And then to further demonstrate that they have no idea what they are talking about, they say:
[…]However, the BPI estimate there are still more than a billion illegal downloads every year in the UK.
Mr Taylor said that figure demonstrated how the market could “explode” if the government tackled illegal filesharing.
I’m not sure what it’s going to take to get these morons to understand that legal downloads and illegal file sharing are actually different use cases. It’s like saying if we got rid of radio, LP sales would soar. It’s hogwash. Illegal file sharing is, well, a lot like radio. Nobody is going to buy every song they listen to on the radio—it is a different use case.
I’m not saying that anyone should illegally share songs, or any intellectual property. It is illegal and unethical. What I am saying is that it is amazing the degree to which the record industry completely misunderstands the nature of illegal file sharing. And until they manage to actually understand it, no stupid and poorly constructed laws are going to fix it. The problem they have is not a legal one, file sharing is already illegal, it’s a business model. iTunes and online legal music sites helped part of the problem, but it only took care of one use case that leads to illegal file sharing. They need to find a way to deal with the other, and again, that is an business issue not a legal issue.
I couldn’t agree with you more on this, and I’ll just add that I currently work in software and they do the same exact thing with piracy. They seem to count every single known instance of software piracy as a lost sale, and seem to be under the impression that if only they could make piracy impossible they would gain all of those sales.
As a result tons of engineering time is poured into increasingly complex protection methods which inevitably lead to legitimate customers having frustrating protection related problems. And this is how I view these sorts of issues: you alienate legitimate customers and in reality are unlikely to gain much if anything in sales for your efforts.
To be honest, due to my company’s market position (number one in cross-platform Mac/Windows sales but distant to the market leader on Windows) I actually think we should encourage piracy (well, okay, not encourage, but turn a blind eye and not make it very hard). Eating away at our biggest competitor’s market share in any way possible should be the name of the game. It’ll inevitably lead to more legitimate sales.
pthread – In software, I agree. Adobe has used this practice to great success.
In music, I’m not sure market share is quite that valuable.
In the recording industry I don’t think market share is any less valuable, it is quite a bit more transient though. Which makes it difficult or impossible to leverage.
For the music industry what it comes down to is this, radio is nearly dead, an nobody is going to buy a song they haven’t heard and don’t know if they like. Not even if it just costs 99 cents.
What is funny though, is the recording industry has the potential to have exactly the situation they wanted back during the payola scandals of the 60s and 70s. They can have their own F*ing radio stations that they control on the web. And that will drive volume for sales. Create a good streaming station on your site for different kinds of music have cool dj’s advertise your music make it easy to buy the songs, right there. BAM… Introduce people to new and interesting music, make money, perhaps even break Apple’s strangle hold on music sales.
But that would take vision, and the recording industry is trapped in the past.
Way back in the day I had a couple of friends at college that achieved mini-success on the local indie scene – none of you heard of them, like so many other local indies, they had to take comfort in fame by association, being on a major label subsidiary where one of the other groups broke out on MTV (then quickly disappeared).
These guys had a special disdain for the A&R guys, who they perceived as having the easiest jobs in the world – the labels just wanted to promote their known brands and didn’t care too much for the new talent the A&R guys “found”. As one of the guys put it (in the early 90s): “No one who has ever seen both Peter Himmelman and REM in concert prefers REM to Peter Himmelman. Yet, REM are alt-rock gods and Peter Himmelman is an alt-rock nobody”.
The finances support this conclusion. If Warner’s REM brand earned them $1 Million in profits last year, and as a viral, relative unknown Himmelman can go from 0 profits to $50,000 profits – cannibalizing $100,000 from REM profits (as prices are higher for the known REM) that’s bad business for the major labels. Which explains payola, pirate radio, and why the labels want to discourage piracy, exposure of new bands, and a free-for-all in music. Better to put the distribution in someone else’s hand and go the payola route.