Deeply flawed IPI ‘piracy’ study
p2pnet news | RIAA News:- The Institute for Policy Innovation, a ‘think-tank’ founded by congressman Dick Armey, has released a deeply flawed, 32-page ‘study‘ purporting to prove “rampant global piracy of recorded music” has cost the US $12.5 billion and 71,060 jobs “annually”.
Precisely $12.5 billion? And exactly 71,060? Every year? That’s what its press release says, but it doesn’t say when this began to happen.
The entertainment cartels, of whom EMI (Britain), Vivendi Universal (France), Sony BMG (Japan and Germany) and Warner Music (US) are fully paid-up founding members, are sparing no cost in their efforts to gain total control of how ‘product’ is handled and distributed online, with their various member companies, and only their their various member companies, firmly in the driving seat.
The Big 4 have for years been trying to claim a file shared equals a sale lost in a wild attempt to justify the continuing lawsuits they’re lodging against their own customers in a fruitless effort to turn them into compliant consumers.
However, the claim has been repeatedly shown to be completely untrue by any number of studies, academic and otherwise.
The labels, not to mention the movie studios, say every download represents a theft, although nothing has been stolen and no one has been deprived of anything in any way, shape, manner or form, and no money has changed hands
To the contrary, it’s now widely accepted that downloading constitutes an invaluable form of viral marketing, which is why more and more bands not tied to the Big 4 are turning songs loose online.
And many of them go even further.
Prince, for example, ran every song on his latest CD for free on the P2P filesharing networks, and you don’t hear him complaining about the results.
Meanwhile, according to the Big 4 labels, any given music lover would have bought a corporate music file had they not previously downloaded it.
Carved in rock guaranteed.
It’s hard to think of a more absurd contention. But that’s the claim. And that’s what the mainstream media faithfully regurgitate as though it emanates from reliable and credible sources.
And The True Cost of Sound Recording Piracy to the U.S. Economy supports this ridiculous assertion, presenting it as hard fact.
It concludes:, “the U.S. sound recording industries are now sustaining approximately $5.33 billion in losses as a result of global and U.S. piracy. In addition, U.S. retailers are losing another $1.04 billion. These estimates suggest total ‘direct’ losses to all U.S. industries from music piracy that exceed $6.37 billion.
“These direct losses then cascade through the rest of the U.S. economy and the losses of economic output, jobs and employee earnings ‘multiply.’
“Based on the analyses set forth in this paper, because of music piracy, the U.S. economy loses a total of $12.5 billion in economic output each year.”
Confidently expect to see this fulsome and overblown report repeated as incontrovertible fact ad nauseum, and at length and in detail, in the mainstream media, and by various bought-and-paid-for US congresspersons
Jon Newton – p2pnet
Also See:
and you don’t hear him complaining – Prince`s Planet Earth CD: FREE!, June 29, 2007
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August 22nd, 2007 at 1:41 pm
How odd that I don’t see any mention of mom and pop stores not being able to compete with the loss leaders of the chain stores. This was directly contributed to by the cartels who gave volume discounts that no record store could get.
Yet chain stores have limited shelf space, so back catalog sales, which at one time represented a 1/3 of the total income of labels, aren’t to be found in chain stores. Further, I don’t see where it is mentioned that the chains demanded and recieved even lower prices. The chain stores simply told them, either lower those prices or we will stop selling them. Since the chains make up at least 75% (and some estimate more) of the nationwide sales, it is a voice that the cartels heeded. The chains would not have missed the sales but the opposite would not have been true.
The closing of the mom and pop stores resulted in a shrinkage of available items at a store. Nation-wide, even the major record stores are going the way of the dodo.
Infringement lawsuits have not earned public sympathy. They have been a PR disaster for the labels, who believe the RIAA and the like would take the heat for them. Lack of buying as a result of seeing what the RIAA is up to, comes right home to roost with the labels that give them their marching orders.
Soundexchange is another that is reaping them negatives in the PR feild. While attempting to get outrageous incomes where none existed in any substancial amounts before, the true maneuver of wanting DRM put into the broadcast came to be revealed as the true want. To date, no DRM has proven unbreakable; most being broken very shortly after release. So it is again an unnecessary burden of no value to anyone, including themselves; yet still they cling to it in hopes it will somehow save the day.
DRM itself is one reason the public is fed up with these music offerings. What purpose is it to spend money on a product that won’t play when you get it home because of all the protections? Bad enough it is overpriced to the point of making customers choose if they really want that product that bad because of the price without the added hoops to jump to go with it. Then because if you bought the original, before the life of the product ends, it starts to quit doing what it is supposed to do. That is allow you to make your copies to take with you as your lifestyle dicates. The insane idea you should go buy yet again for some over format, is over the top, as the customer already paid for the music he wanted.
Then there is the lack of care on the cartels side about refunds. Against all other business practices, the cartels institute a no refund policy. If you get a refund from a reputable store, it is at the stores’ overhead costs, not the labels.
The idea that they want to charge you more not to include DRM, which is a license cost to them to begin with in order to include, is another insane idea. You are continued to be expected to pay more for less.
No wonder they have having to justify to the public with all these fake figures. Their business policies suck. Another other business without the resources they have gathered over the years would have long ago gone busted had they tried that locally. But customers are waking up and no longer do the cartels operate from the background without notice of what they do. Controlling public media was once a guarentee no one would hear what they were up to without their approval. That is no longer the case, the internet makes sure that their movements are well documented. More times than not those movements speak of a slimey, snakeoil selling, underhanded, dirty, and morally bankrupt group.
Whether they like it or not, the buying public is waking up and they don’t approve.
August 22nd, 2007 at 2:18 pm
The iconic Sam The Record Man on Yonge Street in Toronto closed just because of being unable to compete with the big chain stores. The record labels didn’t give a shit about that period. No industry press release or anything.
August 22nd, 2007 at 6:06 pm
Reuters quotes p2pnet. http://blogs.reuters.com/2007/08/22/downloads-hurt-the-economy-report/
It says “The report has already been panned by some doubters who believe it was funded by the music industry.
“But IPI spokeswoman Erin Fitch says the report was paid for by its âgeneral support funds for Intellectual Property programâ. Fitch says the thinktankâs policy is not to disclose its sponsors, though she says IPI, which was founded by former Congressman Dick Armey, has worked with the Recording Industry Association of America (RIAA) and could do so in the future.”
August 22nd, 2007 at 7:08 pm
Consider what this would mean if it were true: 12 billlion dollars and 300 million Americans. That means that every man, woman and child, every tiny baby, every 100 year old nursing home patient, every prisioner, every soldier OWES the record industry 40 bucks! And thats just music. Surely the movie industry, software, and game producers could generate a similar report. Then there are the lesser crybabies: books, phony handbags, duff Rolex watches, Chinese designer clothing, etc, etc., By the time everybody releases their reports, every last American OWES the “economy” several hundred bucks. This money would come right outa our pockets and into the coffers of “the economy”. So lets bankrupt the nation for the sake of those poor starving cartels. Isn’t that what their balony report boils down to?
August 22nd, 2007 at 7:22 pm
Jon you must have the comment above in a story
August 22nd, 2007 at 11:23 pm
Funny posting.
I love it when someone only gives a cursory scan to a press release and then thinks they can characterize an economic study as “deeply flawed.”
Why don’t you at least read the study and then tell us precisely how you think the study is flawed? Why don’t you show some sign of actually familiarizing youself with something before firing off a knee-jerk reaction?
I challenge you to tell us, from an economic standpoint, how our study is “deeply flawed.” Consider the gauntlet layed down.
August 23rd, 2007 at 7:14 am
Flaws begin instantly (forgive the quick reply here, am currently at work so can’t study figures etc in huge depth) with the assumption that a download (or for that matter a ‘hard’ pirate copy sold by bootleggers) equates to a lost sale with all the associated knock on effects. This is simply not the case. Many of those who download may well not have bought a legitimate copy anyway and would just have done without – ok, in this scenario they aren’t ‘enjoying’ the music or whatnot, but it still would not have equalled an extra sale for the music companies.
Then we mix in a further complicating factor – many of those who download will also go on to buy legitimate copy. A lot of users will try before they buy, especially if it is an artist or movie or similar with which they are not familiar. I’ll not try and gloss it up and say all p2p’ers buy, but from my own experience staffing on some torrent sites, many of the ‘regular’ members buy a considerably higher amount of music/dvds etc than the national norm. To further complicate, many people will discover an artist from p2p and then go on to buy further works from that artist. I’ve done similar with movie directors – grabbed a non mainstream movie that got a scene release and was by a director I’d never heard of, discovered it was good, and went on to buy his entire back catalog. Just a small real life example there, but that is 8 or 9 dvd sales in just that one case that would not have happened without p2p. Any comprehensive study of the ‘damage’ which filesharing/piracy inflicts upon a sector of industry cannot be complete without taking into account factors like this – the invaluable nature of publicity and exposure which sharing gives.
Plain fact is – it is easy to take a given perspective – piracy is bad (or for that matter piracy is great) and come up with sets of estimated figures to prove it. As in the comment above about big chainstores driving the smaller retailer out of business, it would be relatively simple to come up with data showing the hugely damaging effect these corporate giants are having on the economy and the individuals way of life/right to choose. The truth would most likely be in between somewhere, for truth is a fleeting thing and there is often little of it to be found in statistics and sponsored studies where an agenda is already in place before the study commences.
Instead of all these studies and lawsuits, the music (and movie) industry needs to recognize that the solution is somewhere in between the p2p’ers ideal, and the cartels own vision of total control. The world has changed, and the cartels are fighting a losing battle – the choice now is simply to adapt or die. All of the studies, lawsuits and so on in the world will not change that – adapt to the new market which you are facing (and there is an immense, virtually untapped online market for anyone willing to deliver a model that is fair, not DRM’d, and is consumer orientated), compromise, work with your customers and not against them. If your figures are correct – like I said, I’ve had little chance to study in depth – then instead of looking to tighter legislation and so on to remove these markets, the thought of the companies should be that great capitalist cornerstone “here is a potential market – how can I make these people buy from me?”
August 23rd, 2007 at 9:22 am
I guess that’s a real good start at an answer Tom.
Will you respond ?
Will you respond without Ad-Hominem ?
August 23rd, 2007 at 1:53 pm
one of those “doubters”, namely Jon the author wrote a follow up to Mr. Giovanetti’s “challenge”;
http://www.p2pnet.net/story/13117
Other “doubters” over at Ars Technica doing well too in “picking up the gauntlet”
http://episteme.arstechnica.com/eve/forums/a/tpc/f/174096756/m/803008096831?r=862003196831#862003196831 for example
August 23rd, 2007 at 3:40 pm
Thats why he won’t be back Fritz.
They come in, say their piece without any factual support, concentrating
on attacking the messenger.
Pretty standard propaganda tactics.
August 25th, 2007 at 4:26 am
Stop buy music from high street shops this will make these idiots think twice this is wot is needed to make them realise that chasing the little college girl or guy or sick mother or socialworkers of the world is only making there sales worse and in turn there music sales drop drastically without the money from sales of records they r nothing stop feeding there nasty habits !