Music downloads – a snip at $80,000
a song
This one may have undershot your radar last week… that is, the Recording
Industry Association of America has just won $1.92M in damages against a
woman accused of file sharing.
Jammie Thomas-Rasset was found guilty of copyright infringement on 24 songs
downloaded from the Kazaa file sharing network and ordered to pay $80,000
for each song.
She quipped "Good luck trying to get it from me... it's like squeezing blood
from a turnip."
Now here’s something interesting: in the same week, a report was published
by two US economists claiming that instead of stifling the creation of
music, films, and books, peer to peer (P2P) file sharing actually encourages
art.
Felix Oberholzer-Gee of Harvard University and Koleman Strumpf of
University of Kansas published a working paper to Harvard Business School
which highlighted the benefits of online piracy. This document admits that
piracy does harm certain business models yet claims that the technology has
done little to dampen the motivation of artists and entertainment companies
to produce new material. This, they argue, is the key point behind copyright
and a flaw in the argument against ‘illegal’ P2P file sharing.
In the US, the Constitution states the goal of copyright law is "To
promote the progress of science and useful arts, by securing for limited
times...exclusive right to their respective writings and discoveries." The
two economists therefore suggest that the test for copyright should be
whether progress (ie. artistic work) flourishes or suffers under P2P.
Should the music industry for instance experience reduced profitability,
would this diminish the motivation to create, market and distribute artistic
material? The paper cited two key considerations:
- As copyright is relaxed, the price of artistic material (music,
movies, and books etc) drops and consumer propensity to purchase
complements (eg. concerts tickets, games) rises.
- If artists gain income from these complements, the overall
motivation to produce new work is unlikely to recede. For instance, as
music becomes effectively available for free, the price of gigs, a
complement to music, is likely to rise. Artists who get income from gigs
would not then be hurt by a fall in music revenue.
The paper claims that because the music industry has seen more than a
twofold increase in the amount of recordings since 2000, it's difficult to
argue that file-sharing has lowered the incentives to create new work. It
further contests that file sharing and weaker copyright protection generally
benefit societies more than they hurt them.
While album sales have fallen since 2000, the number of albums created
has risen significantly:
- In 2000, 35,516 albums were released.
- In 2007, 79,695 albums were released
Even if file sharing were the reason that sales have fallen, the new
technology does not appear to impacted the quantity of music produced. (The
quality argument is another matter but we’ll leave that for now).
If we look at other industries we see a similar tale:
- The worldwide number of feature films produced each year has
increased from 3,807 in 2003 to 4,989 in 2007.
- Even in countries where film piracy is rife, production has
increased, for instance:
- South Korea (up from 80 to 124)
- India (877 to 1164)
- China (140 to 402)
- USA (459 to 590)
CTL Europe has worked with a broadband provider to develop ancillary
revenue through music downloads. As to what effect this US court case may
have on UK downloads is difficult to say.
|
To make a comment on our blog, please click
here.
|
