Recent figures have shown that the global music industry has undergone its first growth since 1999, which just so happens to be when Napster launched, and ever since then music piracy and illegal downloading has been held up by record labels and industry bodies as slowly destroying the music industry.
It remains an issue wholly ingrained into the music landscape, but findings from a new study analysing the downloading and purchasing habits of 16,000 European music consumers suggests that currently, illegal downloading has little effect on the music industry.
As Time reports, the results of a new study released by the European Commission Joint Research Centre affirms a few given assumptions about music consumers’ habits, namely that they differ from country to country and that music piracy affects off-line music sales, but it also presented a new discovery, that illegal downloading of music has little to no effect on legal music downloading.
The study, conducted by Luis Alguiar and Bertin Martins, used ‘clickstream’ data from stats-gathering body Nielsen Soundscan of 16,000 European music consumers found that “a 10% increase in clicks on illegal downloading websites leads to a 0.2% increase in clicks on legal purchase websites.”
The study paper reads:
Perhaps surprisingly, our results present no evidence of digital music sales displacement. While we find important cross country differences in the effects of downloading on music purchases, our findings suggest a rather small complementarity between these two music consumption channels.
It seems that the majority of the music that is consumed illegally by the individuals in our sample would not have been purchased if illegal downloading websites were not available to them.”
The research argues that illegal downloads in fact boost legal music purchases by 0.2%, concluding that people who download pirated music mostly do so as a ‘try before you buy’ means, or to gain access to music they otherwise wouldn’t have ever spent money on.
Additionally, the EU Commission Joint Research Centre’s findings show that online music streaming – namely sites like Soundcloud and video giant YouTube and not specifically on-demand subscription services like Spotify and Deezer – had an even greater effect on legal downloads of music, “suggesting complementaries between these two modes of music consumption,” in the study’s wording.
“According to our results, a 10% increase in clicks on legal streaming websites leads to up to a 0.7% increase in clicks on legal digital purchase websites,” it reads, “suggesting a stimulating effect of this activity on the sales of digital music.”The research argues that illegal downloads in fact boost legal music purchases by 0.2%, concluding that people who download pirated music mostly do so as a ‘try before you buy’ means…
Another interesting conclusion drawn from the study is that illegal downloaders were more twice as active in their music consumption as legal-only consumers, the clickstream data demonstrating that in addition to heading to illegal music downloading sites, they also ‘clicked through’ to multiple sources – surfing through YouTube, Soundcloud, iTunes, and Vimeo, for example. Essentially meaning that music lovers used multiple sources to access tunes, while lesser music fans were more likely to download music legally, but only stick to one or two sources in their music consumption.
Other interesting findings in the study reasoned that both men and women stream music about equally, but that men downloaded more, while also showing that individuals with a higher education would use music streaming more, but that personal income did not affect streaming levels.
The International Federation of the Phonographic Industry (IFPI) however, responsible for the recent Digital Music Report that demonstrated a positive upswing in global music sales, has slammed the EU Commission JRS Study, issuing an official statement this week decrying the validity of the research, as well as its message that illegal downloading does not affect the industry, or that it in fact boosts legal music downloads.
The IFPI’s lengthy response to the study, labels the Digital Music JRC study as “flawed, misleading and disconnected from commercial reality,” and reads:
The IFPI notes that clicking on a legal download website does not equal buying music, that past studies have found that the “some people buy and steal a lot of music because they love music” argument is counterbalanced by the many people who consume a huge amount of money purely illegally, and that the study ignores other music-consumption options like subscription services.
The IFPI’s response also notes that the EU’s JRC study “is also confused over the overlap between the use of legal and illegal services. It is not news that some pirates are also legal buyers – this is consistently found in other studies,” such as Musicmetric’s 2012 study for instance, that demonstrated a steady decline in illegal downloading in America.
Chiefly though, the IFPI are concerned that the EU study does not take into account the likes of Spotify, Deezer, and other popular in-demand music subscription services, which the industry body itself reported were a major contributor to an overall 12% growth in digital music sales, as demonstrated in the IFPI’s recent Digital Music Report.
Subscription services experienced a 44% rise, with 20 million paying subscribers worldwide expecting to help account for 10% of digital music revenues, while traditional download stores – like iTunes, Amazon, and Google and Microsoft’s recently launched services – represented approximately 70% of global digital revenues, says the Digital Music Report.
But the IFPI notes that the new EU study ignores how consumers utilising music piracy and illegal downloading service directly affects “the ability of legal services such as Deezer and Spotify to grow and monetise their audience. It limits their ability to grow their traffic, increase trial of their service and the prospects of growing their premium subscriber base.”
It’s an issue that IFPI is concerned about even closer to home, emphasising that the roll-out of Australia’s National Broadband network would enable music piracy, with IFPI Chief Executive Frances Moore stating: “Australia does not have a legislative ‘graduated response’ process, nor does it have a process to facilitate site blocking,” something that will remain an issue when 90% of Australia’s population are gifted high speed broadband internet in the next two years as part of the Federal Governmnet’s installation of the NBN.
The IFPI’s concerns were echoed by ARIA CEO Dan Rosen, indicating that Australia was still one of the worst illegal downloaders per capita in the world, commenting that copyright protection and the interests of artists needed to reman a priority, estimating that “between 30 and 40 per cent” of internet users were still accessing “unauthorised websites,” over legitimate music sources such as iTunes or streaming services like Spotify and Deezer. Adding that the shift was necessary “so that the money from sales flows back to the people who created the work and not unauthorised websites.”
To put it simpley – as the IFPI points out – “the fundamental problem of the music market place remains as true as ever: why pay for music when you can get it illegally free?”
