Digital NARM Day 2 Panels – Piracy & Consumption

Much of the discussion on yesterday’s first panel “Digital Copyright Crossfire” focused on how the industry should respond to unauthorized file-sharing. The panelists offered many of
the typical arguments – ISP policing, litigation, and new business models that can compete with free music.

On one side, Cary Sherman (RIAA) and Rick Carnes (Songwriters Guild) seemed to suggest that if illegal downloading were curbed sufficiently, file-sharers could be converted into paying customers. But Jonathan Potter (DiMA) and Michael Petricone (CEA) argued that the music business is now consumer-driven and monetizing these customers depends on offering innovative, valuable alternatives.

Clearly, there is disagreement about what drives piracy and what to do it about it. The “Data, Trends & Analysis” panel offered findings on the nature of file-sharing, purchasing and music consumption:

Eric Garland (BigChampagne) said a large portion of P2P users also purchase music legitimately. However, when those people stop their P2P activity and only acquire music by…

buying it, the amount of purchasing they do does
not increase. Garland also reported that of all the music downloaded
illegally, 75% gets listened to at least once, but much of it does not
receive repeated listens.

COMMENTARY: The fact that people didn’t buy more music when they stop using P2P suggests that reducing file-sharing – to
the extent that’s possible at all – won’t necessarily increase download
sales. The fact that people don’t really listen to a large portion of
the music they download from P2P could mean: that they listen once and
decide they don’t like it; that they forget about it or it gets
substituted by other content; or that they download just because it’s
there but don’t necessarily intent to interact with it in the first
place. Either way, it’s unclear what portion of P2P activity could
truly be monetized.

Glen Lipsky (SoundThinking NY)
described the path from discovering a particular piece of music to
purchasing as a long one – sometimes months – that varies from person
to person. She noted that the more listeners interact with free
content, the more likely they are to make a purchase at some point in
the future. The key for sellers, according to Lipsky, is to make
content available and easy to acquire at the moment that listeners make
the decision to consume content. Because listeners will take the path
of least resistance when it comes to acquiring music.

These findings suggest that the digital music market is indeed a
consumer-driven, and that sellers will have to find a way to be
accommodating and patient with listeners in order to engage them

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  1. what research does lipsky have to back up her claim that free content means more sales later? she blames the industry for the file-stealing by implying that content is not “available and easy to acquire” what??!? how many digital retailers does she think are needed, not to mention myspace, label websites, branded websites, etc..

  2. Glad someone else is saying that a song downloaded on P2P is not equal to a lost sale. That’s the thing that’s been bugging me for years, this assumption that everyone would just buy all the tracks if they weren’t available for free. It’s just not true.

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