The Low Down

The fight (not necessarily an unstoppable force) against the immovable object that is P2P downloading has provided fodder for what could easily become a regular series on Antiquiet. There’s certainly a great deal of interest among passionate music fans, worldwide, for these topics and several others related.

I think it’s time to go a little further than simply pointing and laughing.

I wish I didn’t have to provide this disclaimer, but I should, given my reputation and the oversight of this site by certain interested parties: I buy music. A lot of it. I pay for it with actual money. I have removed myself personally from the P2P equation. I’ve gone straight.

Obviously, I have a lot of respect for artists. Antiquiet is irrefutable evidence of this. But that’s nothing new. A few years ago, with all the respect for artists in the world, I conducted myself exactly how many of our readers do: I downloaded quite often to sample, as I simply could not afford ‘blind buys,’ nor have I ever had a snowball’s chance in a microwave at simply kicking what can only be described as a hopeless addiction to good music.

All that’s really changed is that I can now afford to take a lot more chances, and I get a lot of music sent to me for free by publicists that want me to talk about it.

But let’s look at this behavior that’s supposedly ruining the music industry.

As many of our readers do now, once upon a time I downloaded, and with not the slightest bit of remorse; I would just look at piles of CDs, ticket stubs, and t-shirts I had spent countless last dollars on. I watched those piles grow exponentially when the number of bands I liked grew beyond the seven on the radio to the hundreds and ultimately thousands that could be found on MP3 trading forums. And that’s one bone of contention in the argument: Those who download say they directly, financially support artists they like (and might otherwise never have discovered) in one form or many others, with many examples handy.

But what if they don’t like what they downloaded, and they don’t purchase? Or what if they liked it just enough to keep it, but couldn’t quite afford to pay the $10 for what is essentially nothing more than a license they know no one’s ever going to check? Or maybe they can’t afford the $30 ticket that becomes $65 after “convenience fees.” These people are the alleged thieves. These are the people being blamed for the downfall of the industry.

In their defense, they say they only avoided a purchase that wasn’t going to happen anyway, and not buying is not exactly stealing. Maybe it is. Or maybe we have piles of research proving that they’re not harming anyone at all in any way, shape or form. Regardless, it’s a moot point. The people buying and the people stealing, by and large, they’re the same people. They’re the people that care enough about music to pay for it when they can, steal it when they can’t, and spread the word to others either way.

We’ve raised this point before, and it’s been questioned. It’s one of those things that’s hard to prove or accurately quantify. People say that they buy what they download and like, but do they really?

According to the RIAA, they do.

In essays corroborated by a separate independent study by Norwegian scholars, CRIA (the Canadian branch of the RIAA) acknowledged that P2P users do indeed buy more music than the industry would have us believe, and that P2P is not the reason why others aren’t buying music. 73% of respondents to a CRIA survey said that they bought music after they downloaded it, while the primary reason the non-P2P camp did not buy music came down to good old fashioned apathy.

One band can’t attack their thieves without attacking another band’s true fans.

Earlier this week, we reported on Lily Allen’s new blog, where she has spoken out against P2P trading. Our readers respectfully disagreed in our comments section:

Ryan: “[Music lovers] will buy music from legitimate artists as well as downloading free. I can account for nearly 500 dollars spent this summer on music and music related products. You probably [haven't heard] most of them on the radio.”

Mike: “I buy albums, I buy t-shirts. I go to shows, etc. I bet… that I’m in the top 5% of spending by music consumers. If P2P goes away, I stop spending. Not slow down, I stop. I will not spend on a musical product without hearing it first, in it’s entirety.”

Kevin: “I would never have even bought [Lily Allen's] first album if it wasn’t for downloading, and I didn’t buy her second album because of downloading. I look at downloading music like trying on pants. If I [download] and it is great, I purchase it. If it sucks, then it is gone.”

Reeferchief: “[Downloading] has more than doubled the amount of artists i listen to and buy CDs by, like Mew for instance, dEUS, Drive By Truckers, Deerhunter, Atlas Sound, TV On The Radio, etc, etc, etc. I could go on for a few days listing all the bands I’ve discovered… I heard good stuff about the bands, downloaded an album and then subsequently purchased the band’s back catalogues, DVDs, etc.”

I would provide some examples of readers supporting Lily, but currently there are none out of 23 comments. With that said, there are surely people out there in the world that agree with her, and I’m sure it’s just a matter of time before some of them find their way here. We look forward to that. However, our position stands that Lily is not only painfully out of touch with reality, but she’s also a monumental hypocrite. As reader Sars pointed out, Lily’s rant was stolen, word for word from Techdirt’s Michael Masnick.

She was immediately called out by both Masnick and TorrentFreak, and she posted an apology via Twitter. But Masnick scolded her for “missing the point,” as he put it:

“…The reason TorrentFreak and I both brought it up wasn’t because I was upset about her using the post. As I clearly said in my response, I thought it was great that she wanted to use our post, and I encouraged her to do so. The point, though, was that it was a bit hypocritical of her to be going on and on about how evil it is to copy another’s work without their permission, when she went and did the same thing.”

With that, I’m officially done discussing Lily Allen’s thoughts on the matter.

Last year we did an interview with Electric Six’s Dick Valentine (an artist, mind you, that we discovered via P2P sharing). He very succinctly explained why all the crying about downloading hurting artists, at the end of the day, is much ado about nothing:

“Any trend or technological advance that comes along, it’s like a flat tax. It affects everyone, no matter how big or small you are. We all benefit or suffer at the same rate. You just have to adapt to it.”

When we talked to Clutch’s Neil Fallon later that year, the issue came up again. Looking forward with dry eyes, Fallon had nothing to complain about as a hard-working artist:

“Well, if bands want to make a living playing music, what they’re gonna have to do is just work harder. And there’s nothing wrong with that. It means going to play shows. It doesn’t mean sitting around hoping that some knight in shining armor record label is gonna give you a shitload of money and you’re gonna be babied for years. Those days are gone. It’s probably for the best, too.

Most bands are like us, I think- we don’t make money selling records. To do that on a label you’d have to sell platinum numbers. We make our money playing shows, and that’s what it’s always been about. Everybody’s kind of being forced to re-focus on that, and it’s made a lot of people nervous who don’t want to go out there and work for it.”

In June of this year, we dug up a classic essay by Courtney Love, in which she said that the true piracy was being done by major label recording contracts, rather than P2P users. It was a doozy, but things haven’t really gotten any better in the nine years since the piece was first written.

A reader named Adrian came across a fascinating story about 2006 Australian Idol winner Damien Leith, who found himself completely broke despite selling more than $5 million worth of copies of his album The Winner’s Journey, Australia’s highest selling album in 2007. There were absolutely no proceeds going to the artist from the CD sales. Not a penny. He had to sell his car to cover rent.

Radio is another villain that won’t get a pass from us as long as music fans are being attacked for downloading. Let’s get back to the research. In the extensive report filed on behalf of the Canadian arms of EMI, Sony, Universal and Warner, CRIA found data that suggests that repetition on controlled, homogenized radio simultaneously hurts sales for “played to death” artists, while encouraging music fans to seek exposure to new artists elsewhere:

“83% of 18-24 year olds agree that they hear so much of the same song on the radio, that they feel they don’t have to buy the track or album. As the 13-24 year old group is the best customer for prerecorded music both in CD and downloaded form, this finding is especially disturbing. One might conclude that young listeners are being pushed to self-program as the lack of diversity limits choice and others are not inclined to purchase…”

Furthermore, in the same study, CRIA actually looked at the contents of a large cross-section of downloaders’ computers:

“Among downloaders between 13 and 24, the distribution of files on their computer is comprised mainly of shared music from [P2P services] (38%). Ripping their own CDs accounts for 36% of their music, while downloads from paid download sites make up 19% of the distribution, followed by shared music from friends, family and coworkers (11%), downloads from artist sites (6%), and downloads from other sources (3%).”

Ars Technica says the end result is “clear:”

“People are buying music after downloading it on P2P, meaning that the industry has failed to recognize the marketing-like effects of P2P. Just as important, this should caution the industry against assessing each and every download to a “loss” to piracy, since the statistics clearly show that those engaging in P2P do buy music in not-insignificant numbers.”

An empirical analysis done by a pair of researchers from Harvard Business School and UNC Chapel Hill found that the net effect of P2P downloading on sales is “statistically indistinguishable from zero, despite a narrow standard error.” The researchers, Felix Oberholzer of Harvard and Koleman Strumpf of UNC, found that:

“Even in the most pessimistic specification, five thousand downloads are needed to displace a single album sale. We also find that file sharing has a differential impact across sales categories. For example, high selling albums actually benefit from file sharing. In total the estimates indicate that the sales decline over 2000-2002 was not primarily due to file sharing. While downloads occur on a vast scale, most users are likely individuals who would not have bought the album even in the absence of file sharing.”

The study reports that 803 million CDs were sold in 2002, which was a decrease of about 80 million units from the previous year. Despite its own research to the contrary, the RIAA continues to blame the industry’s suffering on piracy. However, according to Oberholzer & Strumpf’s study, the impact from file sharing could not have been more than 6 million albums total in 2002. That leaves about 74 million unsold CDs that the industry needs a new excuse for.

That about wraps up our case: Downloaders are not the enemy, and Lily Allen, James Blunt, Matt Bellamy, and Mark Ronson can flush their blogs down Lars Ulrich’s golden toilet.

However, there’s one parting statement that rogue insider Bob Lefsetz almost beat us to last night in an email blast: The downloading issue is about to become yesterday’s problem, as we begin to enter the Spotify era.

Spotify is an incredible service that rivals iTunes in usability and dominating appeal. It’s currently only available in certain countries (USA not included), but I checked it out with the help of a UK proxy a few months back, and despite being a longtime iTunes shopper, I’m definitely going to use it if and when I am able to.

What makes Spotify different from iTunes is that it streams music on demand rather than downloads a la carte. For years, music fans weren’t willing to detach themselves from physical CDs in favor of digital files on a hard drive. And for years after that, the same people struggled against the idea of trusting a service provider rather than storing DRM-free files on their hard drives. Rhapsody is a streaming service, but it’s clunky, and requires a monthly payment. Spotify works beautifully, and it’s free. It’s catching on. It’s being called “the future of the music industry,” and in an interview with TechCrunch, founder Daniel Ek claims that 80% of Spotify users have stopped P2P file sharing altogether. If they want to hear a song, they just fire up Spotify on their computer or phone, do a quick search, and there it is. Just like iTunes and every bit as reliable as files on a hard drive, as long as you’re connected.

Now Lefsetz is about as skeptical as I am- I don’t know if it (or any one thing) can be the solution, and I’m not sure if the Spotify model pays artists any better than what we’ve got today. But seeing a streaming service find success tells me that by the time we figure out what to do about downloading, downloading itself will have been replaced by something better.

Huge thanks to Mike Schultz for help with the research, and to all of our awesome, thoughtful readers for obvious reasons.