Thursday, March 31, 2011

The Cost of Piracy

Despite the fact that it costs the consumer nothing, Piracy does come at a price.

According to the RIAA, between $7 billion and $20 billion worth of songs are downloaded illegally - or in other words, 23% -69% of total music sales in the year 2009*. The reason for the study's utterly massive margin for error is not because of any statistical shortcomings - this kind of data is incredibly difficult to compile, based on the hydra nature of online piracy.

 No wonder the RIAA's having trouble shutting down The Pirate Bay [Source]

This is despite the fact that the digital market for music has undergone a sharp increase in recent years. The IFPI states that:
"Music companies’ global digital revenues grew by an estimated 12 per cent in 2009 totalling US$ 4.2 billion in trade revenues. Digital channels now account for 27 per cent of music sales, up from 21 per cent in 2008 (IFPI [link not part of quotation]). The music sector is generating far greater value from the online and mobile market than any other sector in the creative industries, with the exception of electronic games." [Source, pg 10]
However, this relatively new medium of revenue stream has not been enough to offset the losses of online piracy. Overall, the IFPI reports a 31% decrease in total sales from the years 2004 to 2010 [Previously linked source]. Despite this, most bands everybody and their mother has heard of are still doing alright, aloft in their copious amounts of cash from merchandising and ticket sales - so who does this hurt?

People like Tosin Abasi, or in other words, "debut artists".  It's becoming increasingly difficult for new bands to "make it" in the music industry. The IFPI reported a 77% drop in debut album sales from 2003 to 2010 [Previously linked source].

Has your been melted by the epicness of a 10 string guitar yet? [Source]

The other side of this coin, however, is that the ease with which an artist can be discovered. Times Magazine writer discusses this issue in his 2007 article. He talks about how did in fact illegal rip a band's song from youtube - and then purchased two albums, and attended a concert. This is not just the sentiment of a single journalist, but in fact only a single testament of a consumer among many, many others. In fact, merely browsing torrents on The Pirate Bay for bands and video games such as Animals As Leaders and Mass Effect [Links purposely omitted] will show exactly what kind of empathy these new age pirates have - they often suggest purchasing the album for no other reason than to support the artists/developers.




*Wikipedia cited for the graph on record sales, which is supported by the various studies conducted by the IFPI.

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