Wednesday, July 27, 2005

yes, posting because it agrees with me

I assume at some point I'll have to do a search for any data that contradicts this, and then get into the methodologies and suchlike.

But for now, since not many people have actually investigated this issue, and instead people tend to make sweeping statements based on moral judgements of the people involved, I'll just point out that the moral judgments of people who file-share as altruistic or at least valuing music highly (rather than as freeloading bastards) seem to be more justified.

The Leading Question, a music industry research group, conducted a survey of 600 music fans who also own computers and mobile phones. the results?

"those who regularly download or share unlicensed music also spend an average of £5.52 a month on legal downloads through sites such as Apple's iTunes Music Store or Napster. Those who were not illegally filesharing spent just £1.27 a month on digital tracks.

""The 2005 Speakerbox research shows that music fans who break piracy laws are highly valuable customers," said Paul Brindley, director of The Leading Question.""

The Guardian article quotes BPI (like the British RIAA) director saying
""It's encouraging that many illegal file sharers are starting to use legal services. But our concern is that file sharers' expenditure on music overall is down, a fact borne out by study after study," said Mr Phillips. "While a third of illegal file sharers may buy more music, around two-thirds buy less, and that two-thirds tends to include people who were the heaviest buyers. That's why we need to continue our carrot and stick approach to the problem of illegal filesharing.""

This is plainly bull. I haven't seen any studies that compare the same people, pre-filesharing and post, to show that how people's buying habits have changed. It would be a pretty stupid study to undertake, considering that paid-for music downloading is much newer than free music downloading. --i.e. the study would be tracking the growing availability of paid downloading, not the growing propensity of people to do it.

Phillips is trying to shift the interpretation of these results - he wants them to mean that the same people who paid for fewer tunes, are paying for more now. But that's not what the study addresses - the study addresses the question of what KIND of person fileshares. Why is this important? Well, from a strictly capitalist perspective, one might want to know how people behave, so that you can market products to them, and design delivery mechanisms that appeal to them.

Rather than do that, the content cartels are attempting to define free music downloaders as de facto bad, for moral reasons. They are attempting to change behavior and preferences. This seems like kind of a losing battle, or at least an expensive one. Even though there seems to be a tidy profit in threatening weak-positioned file sharers with lawsuits in exchange for settlements...*

which brings me to some non-capitalist points -->(which have become The Blog Entry That Ate Everything, including My Dinner And I'm Hungry, So Will Continue It Later)<--

*At some point I want an expose on this - is this what content industries are now? companies that make money by suing people over the use of already created content? From what I hear, this is true in patents even more - companies patent everything possible, and have lawyers who just troll around looking for people to sue. Or individuals patent everything defensively for the same reason - then you don't even have to make market or sell it, you can just wait for someone else to use the same idea and sue them. seems like the opposite of "promoting the progress of science and the useful arts."


  1. I think the worst case scenario is something like this:

    This company is not making may friends in the biotech world!

    Until recently, 95% of DNA was considered ‘junk’ or ‘non-coding DNA’ and thought to have little relevance to genetic research. However, in the late 1980’s a genetic research group called the Genetic Technologies Group (GTG) realised it could hold the key to curing genetic diseases. They paid twenty million dollars to secure worldwide patents, giving them the right to charge licence fees from anyone wishing to research on this DNA.

    Genetic Technologies Group has a lot to answer for. Many question the validity of the patent. To some, it seems extraordinary that such material does not automatically belong in the public domain. For others, the research on junk DNA is nothing new and GTG should never have been granted the patent. “The usefulness of non-coding DNA in biomedical research has been recognized for decades,” claims Dr. Suthers.

    However, the patents’ legitimacy has proved hard to challenge. GTG’s financial clout is formidable and court cases of this kind are hard won. “These are brutal brawls and it’s not the better person winning but the richer person winning,” complains Dr. Cantor of Sequenom. He was disgusted when he had to pay $ I million for a licence. GTG has also been accused of using bully-boy tactics to extract its licence fee. “The amount of pressure they put on us was basically black mail” he says.

    Most frightening of all is the damage GTG’s actions could have on public health. They claim that they are working medical miracles for women in New Zealand. They have opened up a cutting edge centre offering free breast cancer tests that provide the results rapidly. But they are simultaneously charging the local hospital vast sums of money for all genetic tests they might use to diagnose patients like Zoe Battaglene, The hospital will find now themselves hard pushed to offer this kind of service to new patients.

  2. damn..

    there are a lot of really awful examples from the bio patent world. Speaking of something that also has cultural meaning and value to people and has been until now not-ownable..

    the most famous, I think, was the lawsuit over Basmati rice- where a texas company patented several strains of rice that had been indigenously grown in india for probably thousands of years.

    this is also leading to defensive patenting (and maybe copyrighting) in some cases - to prevent what they call "biopiracy." what's interesting about biopiracy is that it's the opposite of what the RIAA calls pirace - it's big companies segmenting off bits of culture and trying to charge everyone else for access.

    I'm not sure that defensive patenting or copyrighting is the way to go.. because I think calling something property of any kind might affect how people deal with it. Also, once it's property, it has effectively been "propertized" i.e. parceled off into a sellable portion, for which the question isn't any more "is it saleable" but rather "how much will it take?"

  3. I see the problem with a specific study comparing paid vs illegal music downloading, but figuring the effect of downloading on other sales channels shouldn't be impossible. The main problem is clearly that the correlation between downloading and conventional shopping is gonna be very high and it won't prove anything except that both activities are concentrated among music fans (same for legal vs illegal downloads, or more so because these also select for broadband access).

    One study I'm aware of was a job market paper on last year's (my) economics market.

    His idea for getting at the causality is to use variation in internet access as instrument (i.e. source of quasi-experimental variation). His result is that downloads strongly hurt sales. His between-country comparison paper has a similar upshot. (Not that I read more than the abstract of either.)