Friday, 24 December 2010

Digital Music Dilemmas

I give up.  I have tried to love the digital music file as the format of the future but I cannot.  Don't get me wrong, I don't dislike the format in and of itself.  I do love having a large collection of digital music files that I can play around with in Ableton Live or Virtual DJ, but in terms of actually embracing the digital music file as a replacement for physical music, I'm afraid I can't go for that (no can do).

piracyisacrime 29-09-2005 9-51-39 PM
(Image: Dr Stephen Dann, 2005, some rights reserved)

Over the last 18 months I've been accutely aware of the amount of money I've spent on music and its related activities.  During the period in which I tracked all my expenditure, I found myself buying a number of different music formats (vinyl, CD, mp3, aac, etc) only to keep returning to the Compact Disc, due to its versatility.  I love physical formats.  I am a dinosaur.  I must be.

I came to this realisation this week after thinking through a few digital music dilemmas.  I recently presented a paper at University of Sunderland's Centre for Research in Media & Cultural Studies in which I attempted to balance the demands of copyright, the behaviour of music fans and the role of government policy as it pertains to file-sharing.  In that paper I was keen to qualify the claim that music industry is dying under the weight of illegal peer-to-peer traffic, whilst looking at some of the industry figures regarding sales in the UK (see the slides below).  
Frequently, claims are made about the size and scale of illegal filesharing and its impact on the music industry whilst ignoring the recent growth in sales overall.  Indeed, a few days after the presentation the Guardian carried a few interesting reports in which the size and scale of the 'problem' was staggering - but not just for the industry.

BPI

The first article drew on a press release from the BPI who were pushing their annual Digital Music Nation 2010 report (.pdf here). The article was full of the usual headline figures and the size and scale of the UK music industry's problem, which BPI chief Geoff Taylor employed to urge Ofcom to enforce the Digital Economy Act quickly.  Here are the big figures:

67 - the number of legal music services in the UK

3/4s - the share of all music downloaded in the UK that is done so illegally

149.7 million - the number of digital singles sold in 2009

160 million - the projected sales of digital singles for 2010

16.1 million - the number of digital albums sold in 2009

21 million - the projected sales of digital albums for 2010

370 million - the equivalent total separate tracks for 2010

500 million - all time sales of digital singles

50 million - all time sales of digital albums

82 pence - the average cost of a digital single

29 - the percentage of 16-54 year old using illegal methods to obtain music

23 - the percentage of 16-54 year old using P2P software to access music in 2010

23 - the percentage of 16-54 year old using P2P software to access music in 2009

24.5 - the percentage of the recording industry revenues generated via digital services

7.7 million - the estimated number of people downloading music illegally in the UK (source: Harris Interactive)

£984 million - retail value of single tracks downloaded in 2010 (source: BPI)

1.2 billion - the number of tracks illegally downloaded in 2010

However, there is a caveat tucked away in the 'notes for editors':

£219 million - the recording industries losses from 1.2 billion illegal downloads

Those losses don't seem quite so bad set against the headline grabbing fears that the 7 million plus figure evokes.  There is a decline in the sale of physical formats like CDs which fits with the usual life cycle of formats.  Indeed physical sales of singles (on CD) account for a tiny amount - around 1% of all single sales.  Anyone who has attempted to buy a CD single recently will testify to the difficulty of finding the format in local music stores, so this is unsurprising.

What seems apparent is that there is growth in digital music, but that piracy is still fairly constant.  The figures above seem to rely on some very strange substitution logic in which each file downloaded illegally equates to a lost sale for the industry.  I'm not convinced that this is a tenable claim.  There are many reasons why people access files from illegal sources. Personally, I own several Macbooks, desktops, iPods and iPhones - way more than the 5 that Apple let you use your legally purchased DRM-infused tracks on.  Had I bought a CD I'd be able to rip that to each of the machines (illicitly!).  Digital music isn't always as flexible as physical.

Changes in the law are unlikely to impact on the behaviour of consumers, many of who are accessing content both legally and illegally.  The way the industry tends to frame this discourse is that there are reasons to be optimistic (ie growth) but there is still a hardcore minority that are not paying for content.  It's never acknowledged that this minority are also the same people paying for music (and indeed, might even be the best customers!).

Consumer rights?

The other article worth referring to here is concerned with the rights of consumers and was published by Consumer Focus.  Essentially, customers have more rights when they buy physical formats (CD, DVD, Bluray) as opposed to digital formats which are not protected under the Sale of Goods Act as 'tangible goods'.  If a consumer buys a digital file that is not fit for the purpose (as in that the file might not be compatible on the portable device it was purchased for) they have no recourse.  They can't return the file to the store or vendor.  Add to this the fact that most shoppers aren't provided with the kind of information about their digital purchase that they might need in order to get it to work and there are some hidden problems with the shift towards digital

Philip Cullum, deputy chief executive of Consumer Focus, said:
"It's crazy to have a situation where someone who buys music on a CD has the legal right to a refund if it doesn't work, but someone who downloads the same music does not. Consumer laws on buying digital goods, whether it is streaming films, or downloading music and software, need updating to reflect the reality of 21st-century life.
There is also another glaring problem dinosaurs like myself are confronting in the shift to digital - what will happen to their rare music collection when physical formats die out completely?  It's not like Robbie Williams or [insert generic pop star here]  can sign your MP3 download after all?


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