Music Business

How To Hack The Music Pirate

Piracy Doesnot Hurt Online Music SalesGuest Post by Russ Crupnick on MusicWatch Blog

The entertainment press ended 2014 with several big stories.  Front pages covered Taylor Swift’s decision to pull her songs from Spotify. The story was accompanied by news suggesting that 2015 might bring a re-evaluation of free streaming or, at least, serious thoughts about windowing music. The Sony cyber-attack was followed by threats regarding the release of The Interview.

I saw a thread to these stories. Sony provided wide distribution of the movie via sanctioned on-demand outlets.  Why then were people compelled to illegally download “The Interview”? Torrent Freak reported 1.5 million downloads through Bit Torrent, and that was just in the first 48 hours post release. You couldn’t claim ignorance of where to legally stream the movie; scarcity wasn’t a problem.  On the other hand, if it became harder to find “Shake It Off,” where would fans go? Would they pay for a track or a view of the video?  Would they migrate to the same dark places as those who viewed The Interview? Let’s put piracy on the front page for a moment.

Reality #1: Despite more than a decade of education and litigation and a blossoming of legal distribution outlets, we know that some consumers are simply prone to steal intellectual property

The fact is the psychology of free still permeates the music industry. In 2013 about half the music Americans acquired was from sharing. Nearly one-quarter (23 percent) who were asked about their music search habits reported looking for “digital music downloads for free”.  Nearly 20 million Americans still use P2P file sharing services to illegally obtain songs and albums. It is not just “kids”; half of those who illegally download music over P2P networks are over the age of 35. Nearly two decades after Napster you have to conclude these folks are aware of what they are doing, and simply don’t care about the legality or morality.

Reality #2: Technology creates new forms of piracy and creates more confusion about what is legal

Pirate-majorSmartphones have driven a resurgence in mobile music, but not without a dark side. In a recent MusicWatch study, we estimated that 27 million people used a mobile app to get free music illegally. For context, that’s more than used Spotify in the same three month period (in the US), or Google Play Music and iTunes Radio combined. These folks download about the equivalent of two albums each year using those apps.  It’s not just apps, or P2P. To get a complete picture of piracy in 2015 you must add in the video streamrippers, the digital locker users, and the drive swappers. Parsing what is illegal is harder today.  Technology has evolved to the point where unsanctioned alternatives sometimes reside next to legal licensed alternatives.

Reality #3: The good citizens welcome help finding reputable places to obtain entertainment content.

In the Spring of 2003 there was national media coverage that an anti-piracy litigation program was coming. After that it is was hard to claim ignorance that P2P music sharing was illegal. The number of P2P file sharers plummeted after this industry litigation initiative was announced.  Word travels- in fact, word of mouth is the dominant way users learn about today’s illegal music services. However,  one-quarter of the people who use these illegal services learn about them via search engines. Would a search “badge of approval” help? Eighty-five percent of digital music consumers agreed that an icon indicating that a search result was for a legal, authorized music service would have an impact on where they went to listen or download music. The majority of consumers express a preference for searches that help them find legal and reputable services or sites.

Reality #4: Could limiting content availability fuel more piracy?

The ad supported (they aren’t free) streaming services deserve credit for helping dampen piracy. Several years ago P2P cessation was driven by fear of litigation or the awful experience of corrupt files and spyware. These days, folks who stop or do less P2P file sharing most often cite availability of legal ad supported audio or video streaming services.  The impact of piracy must be included in any discussion about windows or limits on free streaming options. Some artists will benefit from legal scarcity. Other artists may be victimized by elevated piracy.

I’m sure a few readers will say “enough” about piracy, especially in a world increasingly dominated by legal streaming.  That would be a mistake. The numbers highlight the extent of piracy that continues to exist. Millions of consumers need help transitioning from ownership to legal access alternatives. Most consumers claim to be open to educational messages. The industry needs to point fans to the legal streaming services, and promote the ad-supported model as a pathway to subscription. That will take time. In the meantime, more legal listening hours will attract more advertising revenue. As for the confirmed pirates—the only solution for that group will be to build walls around their illegal consumption and sharing.

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