Torrentfreak’s recent post about how 75% of artists actually profit from music piracy is very interesting:
Piracy is not all that bad for musicians. In fact, research has shown that less popular artists actually profit from piracy. This can be concluded from, and is supported by several studies. Frustrated as they are, the music industry claims that they lose millions a year due to piracy, but is this really the case?
Album sales are declining. 75% of all artists profit from filesharing.
We will try to explain these two seemingly contradicting facts, and list three factors that may help us understand what’s going on…
Artists sell more albums thanks to piracy
Several studies have shown that most artists actually profit from unauthorized sharing of files. They sell more albums because people have the opportunity to download songs and entire albums for free. A study by Blackburn (2004), a PhD student from Harvard, found that the 75% of the artist actually profit from piracy. Blackburn reports that the most popular artist (top 25%) sell less records. However, the remaining 75% of all artists actually profit from filesharing. The same pattern was found by Pedersen (2006, see graph), who analyzed the change in royalties paid by the Nordisk Copyright Bureau between 2001 and 2005.
Read Torrentfreak’s complete post here.
I had a prominent blogger rip on me a few months ago for this post of mine about file sharing, but I stand behind it in terms of classical music. Our era of making a significant profit on classical music album sales is largely over. The discovery factor that the Torrentfreak post covers (not only through piracy but also through legal channels such as Last.fm and Pandora) drives interest in our art, which then sells tickets to events or albums online.
The traditional RIAA model of music distribution does not really make sense for artists anymore outside of that handful of top sellers. A distribution method that promotes a certain percentage of the music for free and then allows purchase of the complete work in MP3 (non-DRM) form may wind up putting more money in the artist’s pocket even though it may move fewer units, because the profit margin for the artist is so much higher in this model.
The RIAA proves over and over that they have no respect for artists or consumers. Crippling DRM and vindictive lawsuits against individuals prove that the record industry is more interested in punishing than in innovating. Distribution methods that bypass the RIAA and sell music more directly from artist to consumer are the future for music. Unless you’re Britney Spears (and maybe even then).