How the Music Industry’s War on Sharing Destroys Markets and Erodes Civil Liberties


1 Leave a comment on paragraph 1 0 As I have argued in this chapter, most of the claims underpinning the piracy crusade have little or no basis in reality. The music industry has indeed undergone a radical economic transformation since the turn of the century, but to the extent that P2P and online music sharing played any role, it was minimal, and can’t reasonably be said to have “caused the entire enormous decline,” as Liebowitz and his sponsors at the RIAA have claimed. The industry, which was buoyed to unprecedented heights by a “perfect bubble” in the 1990s, shrank again a decade later, due to a “perfect storm” exacerbated by the recording industry’s own self-admitted failure to adequately provide their consumers with a functional digital music market.

2 Leave a comment on paragraph 2 0 The industry’s quantitative assessments of market harm from P2P and other forms of digital “piracy,” though widely repeated, have little or no basis in fact, and analysis by the federal government has debunked some of the claims that are integral to its own trade and copyright policies. In fact, according to the IIPA’s own recent analysis, value added to the U.S. economy by the “core” copyright industries increased by $27.5 billion, and the sector itself grew by 1.1% annually in real value, between 2007-2010. With these metrics, according to their 2011 report, “the U.S. copyright industries have consistently outperformed the rest of the U.S. economy” in recent years.[1] These findings seem fundamentally irreconcilable with claims of large-scale damages due to piracy, especially considering that file sharing traffic has continued to grow, and is projected to nearly triple between 2010-2015, according to analysis by research firm GigaOM.[2]

3 Leave a comment on paragraph 3 0 Despite (or because of) the continued growth of online music sharing, there is significant reason to believe that the music industry economy is beginning to stabilize, which would make the “perfect storm” years of 2000-2011 seem transitional in retrospect. Not only is the rate of decline in global music sales slowing considerably (in fact, the market grew in the US and elsewhere in 2011), but the labels and publishers have finally begun to license their content for use in innovative new business models premised on abundance rather than scarcity, such as Spotify and iTunes Match, offering the prospect of higher revenues – and higher customer satisfaction – than the sales of “a la carte” digital singles alone could accomplish. To put it another way, the industry appears to be recognizing that its market has transformed, and is applying genuine efforts toward meeting its consumers halfway.

4 Leave a comment on paragraph 4 0 We are not out of the woods yet, however. Labels are still more likely to litigate than to license when confronted by a genuinely innovative music distribution platform, and there’s the minor matter of a decade of lost opportunities and ill will to overcome. In my next chapter, I will discuss the industry’s lingering goodwill problem and continuing strategic missteps, and discuss the extent to which its piracy crusade has exacerbated these problems.

6 Leave a comment on paragraph 6 0 [2] Roettgers, J. (2011). Sorry, Hollywood: Piracy may make a comeback. GigaOM. Available at: http://gigaom.com/video/file-sharing-is-back/

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Source: http://mcpress.media-commons.org/piracycrusade/chapter-5-bubbles-and-storms-the-story-behind-the-numbers/conclusion/