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Piracy And Copyrights - 2010

Posted February 26, 2010

by R. Feldman


Richard Feldman

President AIMP


Imagine a world without recorded music – no iPods, boom boxes, car radios, in store music– just the cacophony of modern life. Surely we’d find joy in the sounds of nature and no doubt hear more street musicians, live bands - maybe even spontaneous singing. But I predict a much duller, two dimensional world without recorded music to lift our spirits.


So if music is so important why does it command so little monetary value? Is music destined to be an element like oxygen – essential to life but free? Well it’s free if you steal it!


Though not the recognized as the top record holder, I suggest music holds the dubious distinction as the most shoplifted product in the world. The reputed winner is the razor blade – whose cost per blade equates about one song. Along with alcohol, pills, and coffee, people worldwide shoplift nearly 15 billion dollars worth of merchandise each year. But with estimates of illegal P2P trading at close to 90 million files per year (IFPI 2009 report) and a nominal cost of $1 per  download, music is the hands down winner.


Admittedly not all P2P downloads represent lost sales – but what if just 10% of illegally traded songs per year were monetized. That works out to 9 billion songs per year. Assigning a value of say 75 cents per song that would be 6.75 billion dollars which represents over 40% of worldwide music sales (IFPI 2009 reported $16 billion). The added sales would surely create new jobs and who knows, maybe some better music. But is it possible to capture 10%, and if so, how?


It’s an accepted fact that music consumption and delivery have forever changed. We’ll never again see sales driven by “record collections” or hear of an artist “touring to promote an album”. In fact the very concept of owning music becomes debatable if music can be heard anytime anywhere via streaming through a ubiquitous Wi-Fi cloud. But if an estimated 90 billion legal and illegal files are downloaded annually somebody must like owning music.


Admittedly efforts to curb piracy have had limited success and the problem is further complicated since no one has offered a good way to catch people ‘in the act’ of illegal file sharing – and still comply with the DMCA.


But things are changing: First, there is a growing consensus throughout many parts of the world that governments can and should force ISPs to get serious about fighting piracy. European ISPs has been more aggressive than the US on piracy issues, but US copyright owners should have reason to feel optimistic with the appointment of Victoria Espinoza as IP Czar. Options she and the DOJ may pursue include challenging the “safe harbor” provisions granted to ISPs under the DMCA. These provisions clearly state that ISPs are indemnified from litigation through “safe harbor” if and only if they protect copyright owners from piracy – which they clearly are not doing. Secondly, film and television companies are now more aligned with the music industry as their revenues are under attack from lower advertizing revenue, a collapse of DVD sales, less profitable methods of distribution, and increased piracy. There are many additional reasons for optimism but one worth noting would be Comcast’s purchase of NBC. With this merger Comcast becomes both a content provider and digital distributor. Will it allow one division to benefit from copyright theft (Its ISP) at the expense of their content division (NBC)?


Certainly promising new companies and technologies are emerging that will help define the new model, but rampant piracy must be abated. The fight necessitates smart industry and trade group leaders, along with vigilant and brave legislators. But through all this one truth rings clear: The music business may have changed forever but the profound effect music has on the 6 billion people inhabiting planet Earth has not changed at all.   


Richard Feldman

President AIMP

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