Home
PhotographyA couple of days ago I talked about a study showing that people who illegaly download music on the internet actually also buy more music legally – which means that if the music industry increases the prosecution of downloading music, they actually harm themselves.
People who illegally download music from the internet without paying for it are the music industry’s main clientele, because they are at the same time the very people who buy the most music legally.
Now, a new study has been published on timesonline, with the title “Do music artists fare better in a world with illegal file-sharing”? The answer is a clear “nopes”.
Let me quote the most interesting parts of the article:
“The most immediate revelation, of course, is that at some point next year revenues from gigs payable to artists will for the first time overtake revenues accrued by labels from sales of recorded music.”
[...]
“Our data [...] make two things clear: one, that the growth in live revenue shows no igns of slowing and two, that live is by far and away the most lucrative section of industry revenue for artists themselves, because they retain such a big percentage of the money from ticket sales.”
[...]
“Revenues accrued by artists themselves have in fact risen over the past 5 years, despite the fall in record sales.”
The article also contains two very interesting graphs, I’ll show one here, titled with “This is the graph the record industry doesn’t want you to see”.
To sum the graph up:
- The labels makes less money with records, the artists still make the same money as before.
- Compared to 2004, musicians in 2008 earned around 50% more money from live acts.
Overall, they make more money since the whole “pirating” business started, not less.
(via: netzpolitik.org)
November 19th, 2009 at 16:06
I so loved this blog post – if the data is correct, it’s like the diagnosis of a fatal illness for the record labels.
I’m still surprised every time that typical middleman-enterprises don’t have plans on how to develop new business areas. Cutting out the middleman is probably the oldest story of business.
November 19th, 2009 at 21:36
If file sharers spent more money on music, I’m wondering how comes that revenues of records drop so rapidly. And I don’t see that simply the middle man (the music industry) is cut out. If that was the case, the overall revenue of record sales would remain unaffected – only that the music industry would earn a smaller part of it.
I’d find it a bit concerning if producing records doesn’t pay out anymore for anyone – neither for producers nor for the artists (even if live gig may compensate the artists for that). Surely, someone has to pay for good productions.
November 20th, 2009 at 12:18
I do think that a significant part of the service of labels is not needed anymore, and that is something the labels simply will have to adapt to.
Record sales decrease, you’re clearly right about that. Then again, the massive rise in concert-earns might not only have something to do with increased ticket prices, but with people actually going to concerts more and more. It’s just a change in the way the system works.
If a band would offer his CD for download on his website for 2-3 euros WITHOUT any moronic DRM, no question I’d buy it. Even the ones I’d just like to try out. And if the band keep 2.50 euro after taxes, that’s much more money compared to what they get after selling 1 record in a store (like 1-2% of the record price, minus taxes).
November 21st, 2009 at 09:06
But what part of the services of the labels would that be that has been valuable in the past but is worthless today? The factoring and distribution of physical media perhaps – but that can hardly be expensive. And downloads are already much cheaper than CDs – and by the way, there is hardly any provider anymore that sells music with DRM (except maybe Apple who are always a bit special). I always believed that the production of music was their core business (and surely promotion of the artist).
The other thing is that I don’t believe that people actually listen less to music at home and go to concerts instead. It appears to me that people simply pay less which is a crucial difference. People want music and they want it for free. But in the end someone has to pay.
If you think that 5 to 10 Euro is too much for an album, I disagree. And if you don’t buy records because the artist only earns a fraction of the price, then I note there is a deal between the artist and the label which is not on us to question.
November 26th, 2009 at 21:50
You are right about the problems. I am very unhappy to be forced to pay such a high amount of money, which mostly supports the music industry, which is, as far as I am concerned, to a great part simply not needed anymore. And yes, I am mainly referring to physical media here. Referring to all kind of analogue, offline services. Many costumers would switch to more practical services, would they be offered.
That’s why I think this is just a temporary problem. Same with DRM … people protested heavily. Some services changed back, not all. We shall see if the opinion of the user is important enough here.
A metaphor: it is like buying a toaster for 100 Euros instead of 10 Euros, because the energy with which the toaster was produced was generated with burning coal instead of using new energies. The metaphor has obvious flaws, yes, but I think you can see what I mean.
Not supporting the artists because of this is truely not a solution at all, you are right there, as well.
November 27th, 2009 at 08:24
Frankly, I don’t know what the music concerns spend their money on. But again, I can’t believe that the physical media are so expensive to produce. Burn the CDs in Taiwan and ship them to Europe – that can’t be more than a Euro.
I may eventually look up a balance of some concern. They have to make them public as anyone else.