A second important type of evidence to which the antitrust authorities look in order to gain insight into how the merger will affect future conduct in the sector is to examine past behavior, particularly “industry participants’ behavior in tracking and responding to price changed by some or all rivals”DOJ/FTC, 2010:11.  Here the record is particularly troubling.  The leading firms in the sector have engaged in a repeated pattern of anti-consumer and anticompetitive behavior.  In the mid-1990s, the major record labels engaged in two practices that imposed severe harm on consumers and competition.  They eliminated the sale of singles, even though the CD was well-suited for the sale of singles.  They adopted a price fixing scheme to keep album prices high, even though the new compact disc CD format dramatically lowered their costs and discounters had lowered prices.  In short, they restricted output and raised prices, forcing consumers to unnecessarily purchase hundreds of millions of overpriced CDs to get the music that they wanted.  An antitrust consent decree ended price fixing FTC: 2000 and digital distribution made the sale of singles a compelling alternative. Nestor, 2012  1.  

via The Role of Antitrust in Protecting Competition, Innovation, and Consumers as the Digital Revolution Matures: The Case against the Universal-EMI Merger and E-Book Price Fixing | Public Knowledge.

Excellent study on the Dutch file-sharing scene.

highlights:
About one in five people who download from illegal sources had in the past year bought a CD or LP that they had previously downloaded from an illegal source. The same was found for DVDs, Blurays and for printed books. The opposite – downloading a book from an illegal source that had been previously purchased in print – is also very common. This shows that for a substantial group of
consumers printed books and e-books are complementary.

People who download from an illegal source are more frequently also consumers from legal sources, and they are more likely go to concerts and the cinema and to purchase derived products Respondents who had downloaded music, films, series, games and books from illegal sources in the past year were more likely to use legal channels as well. Only in the case of music purchased on CDs or LPs, however, no difference is observed between those who had on occasion downloaded from an illegal source in the past year and people who had never done so. The differences are particularly marked in the case of paid-for downloading and streaming from a legal source: respondents who have never downloaded from an illegal source are also little inclined to pay for online content. The survey also showed that people who had, on occasion, downloaded from an illegal source in the past year bought more music and film merchandise and went to concerts or the cinema more often.

The survey shows that roughly one third to half of the respondents would not be interested in the latest download from an illegal source if it would not be available for free. The rest have an average maximum willingness to pay that is close to the normal selling price. Similarly, about one third of all book readers are interested in and willing to pay to borrow e-books from a library or bookshop, there being a slight preference for libraries and for a flat rate per year rather than a price per title borrowed.

http://www.ivir.nl/publications/poort/Filesharing_2012.pdf’

Average revenue streams

For the major record labels the above pie chart would look quite different, as they mostly rely on revenue from music sales. This also explains their strong views against unauthorized file-sharing.

via Music Sales Are Just 6% of Average Musician’s Income | TorrentFreak.

Though his recent statements are unlikely to shock the many young music fans who grew up downloading albums and songs illegally, many were surprised when Neil Young said he didnt really mind piracy.”It doesnt affect me because I look at the internet as the new radio,” Young said in January. “I look at the radio as gone … Piracy is the new radio. Thats how music gets around … Thats the radio. If you really want to hear it, lets make it available, let them hear it, let them hear the 95 percent of it.”

via Neil Young: Piracy Is The New Radio, Way To Get Your Music Heard.

A leaked presentation from the RIAA shows that online file-sharing isn’t the biggest source of illegal music acquisition in the U.S. The confidential data reveals that 65% of all music files are “unpaid” but the vast majority of these are obtained through offline swapping. The report further shows that cyberlockers such as Megaupload are only a marginal source of pirated music.

In April, one of the RIAA’s key employees informed a group of music industry insiders about the upcoming six-strikes anti-piracy scheme in the U.S. TorrentFreak received a copy of the presentation sheets which include a rather interesting chart on where people get their music files from.

The data presented by the RIAA comes from NPD’s Digital Music Study but has never been published in public in its current form. While NPD’s press release mentioned a decline in music acquisition through P2P file-sharing and hard drive trading, these numbers were not placed in a larger context.

A strange decision, because the chart below is of critical importance for the debate on music piracy.

As it turns out, two thirds of all music acquired in the U.S. is unpaid. However, offline trading is a much bigger source of unpaid music than online piracy. Of all “unpaid” music less than 30 percent comes from P2P file-sharing or cyberlockers.

Music sources

In total, 15 percent of all acquired music (paid + unpaid) comes from P2P file-sharing and just 4 percent from cyberlockers. Offline swapping in the form of hard drive trading and burning/ripping from others is much more prevalent with 19 and 27 percent respectively.

This leads to the, for us, surprising conclusion that more than 70% of all unpaid music comes from offline swapping.

The chart is marked “confidential” which suggests that the RIAA doesn’t want this data to be out in the open. This is perhaps understandable since the figures don’t really help their crusade against online piracy.

The RIAA is lobbying hard for legislation and voluntary agreements to deal with the online piracy problem, an issue that might seem less severe in the chart above.

While not insignificant, the fact that less than one in five music acquisitions can be traced back to online file-sharing isn’t really that convincing – especially when one takes into account that only a tiny fraction represent a lost sale.

Even if all online music piracy disappeared tomorrow, more than half of all music acquisitions would be unpaid.

But maybe the RIAA will go after these offline swappers next. The TSA could perform piracy scans of travelers’ computer equipment, for example. Or perhaps schools could search MP3 players, phones and computers of their students for unpaid music?

Just a thought.

More revealing findings from the RIAA will be published soon.

via RIAA: Online Music Piracy Pales In Comparison to Offline Swapping | TorrentFreak.

“IFPI has inadvertently made available its own confidential internal report, penned by none other than IFPIs chief anti-piracy officer, which details its strategy against online piracy for major recording labels across the globe. The document, 30-pages long, talks about file sharing sites, torrents, cyberlockers, phishing attacks, expectations from Internet service providers, mp3 sites and a lot more. The document is a global view representation of IFPIs problems, current and future threats, and the industrys responses to them.”A few tactics: shutting down music services, requiring file lockers filter uploads or be shut down interesting, since the DMCAs one good provision is the safe harbor, and proactive filtering could mean losing that protection, lobbying for DNS blocking legislation, pressuring ISPs into extra-legally enforcing their will, disrupting payment processing for pirate sites through blacklists, and providing “training built around real world experiences and challenges rather than focusing on theory” on copyright law to judges and legal bodies.

via Leaked IFPI Report Details Anti-Piracy Strategy – Slashdot.

I never went through the transition from physical to digital. Im almost 21, and since I first began to love music Ive been spoiled by the Internet.I am an avid music listener, concertgoer, and college radio DJ. My world is music-centric. Ive only bought 15 CDs in my lifetime. Yet, my entire iTunes library exceeds 11,000 songs.I wish I could say I miss album packaging and liner notes and rue the decline in album sales the digital world has caused. But the truth is, Ive never supported physical music as a consumer. As monumental a role as musicians and albums have played in my life, Ive never invested money in them aside from concert tickets and T-shirts.

via I Never Owned Any Music To Begin With : All Songs Considered Blog : NPR.

We recently posted an interesting study talking about how greater file sharing of leaked albums had a specific (if small) causal impact that resulted in higher sales. I thought it was an interesting area of research, though one where a lot more work needs to be done. Following that, however, there was an interesting exchange on Twitter, mainly by former Warner Music exec Ethan Kaplan, who didn’t seem to think the concept was controversial at all — and instead that it was obvious.

via Former Record Label Exec Ethan Kaplan: Duh, Of Course More File Sharing Leads To More Sales | Techdirt.

“Just 30 minutes after Whitney Houston died, Sony Music raised the price of Houston’s greatest hits album, ‘Ultimate Collection,’ on iTunes and Amazon. Many technologists, including chairman of the NY Tech Meetup Andrew Rasiej, suggests that Sony should be boycotted for the move. In a tweet, Rasiej wrote, ‘Geez Sony raised price on Whitney Houston’s music 30 min after death was announced. #FAIL…We should boycott Sony.’”

via Sony Raises Price of Whitney Houston’s Music 30 Minutes After Death – Slashdot.

ReDigi bills itself as “The World’s First Online Marketplace For Used Digital Music,” but the RIAA is not impressed. Categorically rejecting the “first sale” doctrine as a safe harbor, the Recording Industry Association of America has sent the ReDigi digital music resale site a letter (PDF, hat tip: Cnet) that effectively demands that the company abandon its business and open its sales records to RIAA’s lawyers. Cease and desist your “infringing activities,” the missive warns. But that’s the least of it.

via RIAA wants ReDigi out of the business of selling “used” iTunes tracks.

In 2011, art and culture exist as DIGITAL MEDIA, and it is naive to think it will not be leaked or downloaded or shared or “stolen” repeatedly. It is just a fact of life. People need to decide for themselves if they want to steal or not. And if they DO then they can decide if and how to follow up with support. If you download leaked music, and you enjoy it, why not go buy an official copy? It seems fair. You are not obligated to do this, it is just a choice. Do you enjoy the artist? IF YOU ENJOY, THEN SUPPORT. If not, then simply carry on. It takes a LOT of time and energy for artists to create their craft, and even more time and energy for them to prepare a release, and to distribute it. You can support what you love in many ways, and in a sense you vote with your dollar.

via Dubstep Producer Bassnectar Talks Piracy, Leaks And Making It Easy For Your Fans To Support You | Techdirt.

“Myself and a few friends were very angry that certain people only seem to want to profit from recordings like the Toy album, so when we saw the eBay auction and heard of someone else selling discs for $55, I decide to upload it and give it away,” Brigstow told TorrentFreak.

via Unreleased Bowie on BitTorrent: Pirate Sabotage Turned Cultural Blessing | TorrentFreak.

The injunction was the result of a lengthy and ongoing litigation process which dates back to 2006, and soon after it was awarded the record labels filed a claim to recoup damages said to have been caused by LimeWire. The labels calculated that the company behind the popular file-sharing client owes them up to a billion dollars.

The case dragged on and in recent weeks dozens of documents were submitted to the court in a noteworthy side-battle. To get to the bottom of how the music industry sets up licensing deals with other Internet companies, LimeWire subpoenaed internal emails from Apple, Amazon, Yahoo, Google, MySpace and others.

Thus far a quarter million pages of emails have been collected, leading LimeWire to draw some interesting conclusions. Among other things, they found that unauthorized downloads actually boosted the revenue of music labels, and that their income took a dive when LimeWire shut down.

via LimeWire Settles With Record Labels, Still Faces $1 Billion Claim | TorrentFreak.

http://www.itworld.com/%5Bprimary-term%5D/138187/music-execs-stressed-over-free-streaming

Free streaming services are replacing piracy as the chief culprit of music industry revenue loss in the minds of fiscally frustrated executives, if a number of panel discussions at a New York digital music conference are any indication.

People are listening to more music than ever before, but they are paying less for it, noted Russ Crupnick, a president at the analyst firm NPD Group, speaking at the Digital Music Forum East conference, held Thursday in New York.

Crupnick noted that the average consumer listened to music 19.7 hours a week in 2010, up from 18.5 hours per week in 2009. But at the same time, consumers have been buying less music. In 2010, only 50 percent of consumers purchased music, by either buying a CD or paying for a downloadable music track, down from 70 percent in 2006.

“We have lost 20 million buyers in just five years,” Crupnick said. Moreover, only about 14 percent of buyers account for 56 percent of revenue for the recording industry.

“Consumers have flipped us the bird,” Crupnick concluded, adding that the lost sales has thus far not been made up yet by other forms of revenue, such as concerts or merchandise sales.

The music industry has long expected that sales of music CDs would decline, as consumers move their libraries to computers and portable listening devices. Digital sales, however, have not made up for the shortfall on CD sales over the past decade. Last year, digital sales accounted for about 23 percent of all music sales, which is up only modestly from 14 percent in 2006, Crupnick said.

“We never really made the digital transformation,” he said.

The reasons behind this sales decline have been routinely debated at this conference over the past decade, the panelists noted. In years past, music executives put the blame on digital music piracy — the easy and free sharing of music with Internet software like BitTorrent — for eroding sales of recorded music.

At this year's conference, however, concern centered on the growing influence of free streaming Internet services, such as Pandora, MySpace, Spotify and even YouTube. Music listeners deploy YouTube as a streaming service, picking the songs they want to hear and minimizing the browser window, noted Eric Garland, who is the CEO and founder of BigChampagne, a media tracking company.

via Music execs stressed over free streaming | ITworld.

Slashdot

“The Guardian reports that Britain’s two biggest record labels, Sony and Universal, plan to beat music piracy by making new singles available for sale on the day they first hit the airwaves hoping the effort will encourage young people to buy songs they can listen to immediately rather than copying from radio broadcasts online. Songs used to receive up to six weeks radio airplay before they were released for sale, a practice known as ‘setting up’ a record. ‘What we were finding under the old system was the searches for songs on Google or iTunes were peaking two weeks before they actually became available to buy, meaning that the public was bored of — or had already pirated — new singles,’ says David Joseph. Sony, which will start the ‘on air, on sale’ policy simultaneously with Universal next month, agreed that the old approach was no longer relevant in an age where, according to a spokesman for the music major, ‘people want instant gratification.’”

WSJ.com

“We don’t have to rush out records that don’t work for the sake of making money,”

[origo]

- Becslése szerint mekkora bevételtől eshet el az illegális letöltések miatt?

- A  Fehér Sólyom nevű kiadóm csak a saját kiadványaimat jelenteti meg, ennél kisebb, egyszerűbb vállalkozás aligha létezik. Négy év munkája van A katona imája című új albumban, sok érzelmi és anyagi ráfordítás: vonóskari felvételek, nagy stúdió, rengeteg munka, aki akarja, csaknem kétórányi werkfilmben ellenőrizheti le a videómegosztókon vagy a CD-hez adott ajándék DVD-n. Ha a saját munkát nem számolom, a konkrét anyagi ráfordítás valahol hatezer példánynál térülne meg. Viszonylag egyszerű belátni, hogy nem ez a világ legnagyobb biznisze. Nem lehet megmondani, hányan töltik le hobbiból, esetleg kifejezetten károkozási szándékkal az anyagot. Mindenesetre biztos, hogy potenciális vásárlók is töltenek: nem lehet nem észrevenni, hogy milyen észvesztő mértékben zsugorodik évről-évre a lemezpiac. Ebben a torrentezés szerepe letagadhatatlan, baromi nagy kárt okoz, elsősorban olyan kis országok zenészeinek, előadóinak, mint Magyarország. Pásztor László, a Neoton gitárosa és az mTon kiadó vezetője ezt úgy fogalmazta meg, hogy a torrentezés elvégezte itthon azt a piszkos munkát, amit a kilencvenes évek kazetta- és CD-hamisítóinak nem sikerült.

- Ön követi az új technológiákat, Blu-ray-en is jelent meg koncertfelvétele, zenéi elérhetők a Songo.hu online zeneáruházban is. A hagyományos lemezekhez képest milyen eladásokat hoz a legális online zenebolt? Milyen ütemezés szerint kerülnek fel a zenéi a szájtra, ahol ez az új album még nem elérhető?

- Valóban mi adtuk ki az első magyar zenei Blu-ray-t, de részemről nem lesz folytatás, mert rengeteg pénzt költöttünk rá, és egyszerűen nem érte meg: nagyon nem! A legális zeneboltokból elenyésző, szinte mikroszkopikus a bevétel, mert esélyük sincs versenyezni a torrentezéssel. Ha ötszáz forint lenne egy album, a letöltő akkor se venné meg, mert az pont ötszázzal drágább, mint a torrent.

- A ProArt az ön albumát jelölte meg tömeges szerzőijog-sértést elkövető magyar torrentoldalak ellen tett feljelentésében. Egyes szájtokon a lefoglalások hatására olyan belső szabályzatot hoztak, hogy tilos magyar zenéket megosztani, a külföldi kiadványok terjesztése azonban továbbra is rendben van. Mit gondol, egy ilyen lépés segíthet valamelyest a hazai előadók helyzetén?

- Azt beszélik, hogy a torrentoldalak, ha levelet kapnak egy magyar előadótól, akkor kérésre leveszi az anyagait. Ehhez persze állandóan ezeken az oldalakon kéne lógniuk a zenészeknek. Ehelyett a legtöbb magyar előadó a kicsiktől a nagyokig felhatalmazza a ProArtot, hogy ha a tartalmaikat megosztva látja a szervezet a torrentoldalakon, akkor azokat távolíttassa el azokról. Amikor megkérdeztem a szervezetet, hogy miért az én albumomra való hivatkozással koboztak el szervereket, azt a választ kaptam, hogy ezeket az oldalakat még augusztusban felszólítottákl a jogsértések megszüntetésére, azok pedig nagy ívben tettek az egészre. A feljelentést is úgy írták meg, hogy több zenei tartalom érhető el az oldalon az én albumomon kívül is. A ProArt is örül, ha megoszthatja a felelősséget és egy széles körben ismert előadó lemezére hivatkozhat egy feljelentésben. Az igazsághoz hozzátartozik, hogy egyes szájtokon valóban leállították a magyar zenék megosztását. Más szájtokon meg engem kiáltottak ki első számú közellenségnek, arra a népmesei egyszerűségű kitalációra hivatkozva, hogy én feljelentettem, elkoboztam a torrentoldalakat. Úgy tűnik, nem sok embert érdekel, hogy ez kamu, és hogy sem szándékom, sem hatalmam nincs ilyesmire – viszont újra lehet böködni az Ákos-alakú vudubabát. Ezeken a fájlmegosztókon dollármilliókért készült filmek Blu-ray-kiadásait tölthetik le az emberek ingyen. Éppen az én 3990 forintos CD-m miatt tiltottak le szervereket? Ez komoly? Aki ezt beveszi, az azt is elhiszi, hogy Gyurcsány Ferenc gyerekeket talál az utcán. Ami ezután következett, az a hazai torrentezésben egy egészen új, figyelemreméltó elem. Egy magyar produkcióval szemben szervezetten, direkt károkozási szándékkal lépett fel a torrentezők egy csoportja (akik a lefoglalásokat követően szándékosan kezdték terjeszteni Ákos új albumát – a szerk.): ezt egyértelműen megfogalmazták. Az csak ráadás, hogy hamis vád alapján tették-teszik mindezt. Ezzel sajnos vége az “ártatlan fájlmegoszás” imidzsének.

- Ön min hallgat zenét? Előfordult már, hogy egy számot, albumot nem tudott beszerezni semmilyen legális formában, ezért letöltötte mondjuk torrentről?

- Nincs különbség, csak jobban indokolható. Ódivatú srác vagyok, CD-n hallgatok zenét, ha mp3-at töltöttem le, akkor is CD-re írtam ki. Ritkaságokat régen a lemezboltból lehetett beszerezni: ma azért nem lehet, mert a lemezboltok bezártak és a nagyobb műszaki boltok lemezosztályai is egyre kisebbek. A minden képzeletet meghaladó fájlmegosztás miatt néha már az sem tud lemezt venni, aki szeretne, mert egyszerűen nincsen hol.

- Nem jogilag, erkölcsileg kérdezzük ezt is: elítélendőnek tartod, hogy ha megvannak az albumaid kazettán vagy cd-n, és letöltöm őket warezszájtról mp3-ban?

- Teljesen hipotetikus kérdés. Minek töltenéd le azt, ami már megvan? Aki ma letölt, az nem vásárol. Nem olyan bonyolult ez.

- Ön szerint megoldaná a hazai lemezipar problémáját, ha nem lehetne torrentezni?

- Ha nem lehetne ingyen letölteni azt, ami az alkotóknak pénzbe kerül, az elég sok mindent megoldana, igen.

Music Ally | Blog Archive

Brindley from Music Ally now (I feel like Paxman on University Challenge). He talks about where should the crackdown on piracy come – suing your own consumers hasn’t worked in markets like the US. “When you start taking action against them, that tends to lead to some pretty bad PR,” he says. And he points out that taking action against the file-sharing sites hasn’t worked well either. Yet pressuring the intermediary – ISPs – is dangerous. “When you start playing around with people’s connections… that’s a pretty severe intervention.” He thinks that actually cutting people off from accessing the internet in their own homes – “when that’s going to become just like electricity, water – a basic human right… I’m not sure it’s worth that battle

GIGAOM

There are still significant gaps in the catalog.
I still can’t merge things I own with things I just want to stream.
Ownership of music still provides a smoother listening experience.
I can only share music with fellow subscribers.
I can still hear things that I don’t already own without paying for them.