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IFPI: 'Ten inconvenient truths about the music industry today'

31 May 2007 10:43 by James "Dela" Delahunty | 49 comments

The International Federation of the Phonographic Industry (IFPI) has published today an article, titled, "Ten inconvenient truths about the music industry today". It is simply a list of 10 "truths" related to music piracy internationally with some familiar names. The title of the report is no doubt aimed at grabbing media attention, but a bad attempt at putting the damage of music piracy on the same level as the other topic "inconvenient truth" is associated with, Climate Change (if that was the aim of the IFPI).

So what are these ten truths?....

Pirate Bay, one of the flagships of the anti-copyright movement, makes thousands of euros from advertising on its site, while maintaining its anti-establishment "free music" rhetoric.
Allofmp3.com, the well-known Russian website, has not been licensed by a single IFPI member, has been disowned by right holder groups worldwide and is facing criminal proceedings in Russia.
Organised criminal gangs and even terrorist groups use the sale of counterfeit CDs to raise revenue and launder money.
Illegal file-sharers don�t care whether the copyright infringing work they distribute is from a major or independent label.
Reduced revenues for record companies mean less money available to take a risk on "underground" artists and more inclination to invest in "bankers" like American Idol stars.
ISPs often advertise music as a benefit of signing up to their service, but facilitate the illegal swapping on copyright infringing music on a grand scale.
The anti-copyright movement does not create jobs, exports, tax revenues and economic growth � it largely consists of people pontificating on a commercial world about which they know little.
Piracy is not caused by poverty. Professor Zhang of Nanjing University found the Chinese citizens who bought pirate products were mainly middle or higher income earners.
Most people know it is wrong to file-share copyright infringing material but won't stop till the law makes them, according to a recent study by the Australian anti-piracy group MIPI.
P2P networks are not hotbeds for discovering new music. It is popular music that is illegally file-shared most frequently.

It's not at all surprising that the Pirate Bay and AllofMP3 made the top 2. However, there is a real "inconvenient truth" here to deal with; both sites are still online. The reason for this is that neither service is considered illegal in either country (Sweden and Russia) and both claim that no laws are broken.

The truth that terrorist organizations are profiting from counterfeit CD sales is true, as do they profit from all kinds of criminal activity and the worst are state funded. However, considering the list is dominated by piracy on the Internet, it has to be mentioned that a kid at home downloading songs from a P2P network for personal use doesn't fund terrorism.

The IFPI seems to have taken a stab at Internet Service Providers (ISPs) for advertising about music while allowing P2P traffic on their networks. With iTunes, Napster and the countless other "authorized" music download sources now available, it should be considered a good thing that ISPs would advertise music availability as part of high speed connections. As for P2P traffic, it's important to note that most P2P software and networks are entirely "legal". ISPs do sometimes block or limit P2P traffic, but mostly just due to bandwidth concerns and have come under fire recently for this practice as it blocks some "authorized" video services from operating.

The 8th truth argues that piracy is not caused by poverty and cites research in China. You have to remember that in China and many other countries in the world, the markets at which counterfeit products can be found are part of consumers' daily lives and their culture. It's has also been going on so long now that most consumers in these countries don't even stop to think about whether the product is counterfeit or not, its not the same frame of thought as in the West where these pirate markets aren't so dominant.

Even in the West, many Internet pirates, or consumers buy products because they feel they are overpriced for what they are. Many file sharers are children who don't work, which the RIAA has discovered by filing thousands of lawsuits. Look at the UK and Ireland as an example, where consumers are vocal about living in a "rip off" society. In Ireland, CDs are priced often over �20 ($26) at retail, when many have about 12 songs, in which only half might be considered worth buying.

The 9th truth cites a report by the Australian Recording Industry Association's Music Industry Piracy Investigations (MIPI) showing that most people know that it's "wrong" to share music but "won't stop till the law makes them". While it is true that many people acknowledge it may be illegal to download music or buy pirated CDs, they have continued even when the law has been altered to make these acts illegal. It comes back to the point that many users simply don't see it is "a big deal" in the grand scheme of things.

Reading around these popular piracy resorts online, you often see discussion of how piracy effects artists but very little care for how it effects the record companies. This can be considered a self inflicted wound as these companies have labeled file sharers as thieves regardless of how much music they have bought in their lives, have filed lawsuits often against children for sharing music, have tried to get technology that can be used for legitimate purposes declared illegal, have included anti-fair use DRM measures on legitimate products, often dangerous to computer security (see XCP and MediaMax) and seem determined to keep a hold on the global market for music at all costs.

And finally, the 10th truth says that, "P2P networks are not hotbeds for discovering new music. It is popular music that is illegally file-shared most frequently." Of course, popular music is the most pirated, there is no doubting that. However, denying that a sudden availability to free music over a long period of time can spur a greater love for music would be inaccurate. The RIAA accuses people it sues of sharing thousands of MP3s, whereas those would most likely never have been purchased and are simply consumed because they are free.

A wider appreciation for music amongst P2P users, many of which are children, can affect sales of merchandise or concert tickets. In the case of children, they may also spur future sales of CDs simply because the kid became fond of a band after discovering them years ago on P2P networks (either in someone's shared folders or because a user associated more popular music with this particular band's material.)

I'd like to close by saying that there is nothing that the IFPI has said that can be proved wrong and piracy does, undoubtedly, show its impact in revenues of entertainment companies. I also admit that my debating points for some of these published "truths" cannot really be considered journalism but I think they reflect views of the majority of consumers.

It is however, frustrating that every press release from the IFPI groups P2P together as "illegal file sharing" or "illegal P2P networks" while in most territories, P2P networks and software are completely legal and that this industry demands respect and compliance from a large amount of people, many of whom feel that no real effort was made on the industry's part to work with newer technologies but instead, jumped the gun to lawsuits which have affected poorer families and students terribly.

Internet piracy also does not get credit for building confidence in digital music formats. Would iTunes have been so successful if it had launched and Napster never existed for people to be introduced to digital music in the first place? Also, let's not forget the market that MP3 files helped build, millions and millions of MP3 playing hardware devices sold and the market can only get bigger.

Once again, piracy is a problem and does, to a degree, affect real creative artists. But has the music industry taken the correct path in fighting piracy these days and can a little more truth about how piracy can be beneficial in cases and less false information (like saying P2P networks are illegal) really hurt?

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ZippyDSM (AfterDawn Addict) 8 June 2007 13:57
dufas I thought the suits that "own" hollywood were hardcore corporate types 0_o [ + quote]
dufas (Member) 8 June 2007 14:23
Not all hardcore corporate types of the type you suspect. Many have a socialist even communistic bent. It is their ego and elitism that make them think that they are above the government. Carl Riener has come out and said he is for communism. When asked if he doesn't fear that he would be ran over along with everyone else, his reply was that he is too important of a person to be controlled by any government's political edicts.. Rob, his son, has paraphrased his father's comments. Both of these people are heavily involved in the entertainment industry and none of the other 'suits' have ever rebutted their statements. Danny Glover just went to south America and collected $80,000,000.00 to make an anti-American movie. He did this right after going to Cuba to give his condolences to Castro. There are many wealthy people, corporate heads, and entertainers that would like to see America turn socialist. Hillary Clinton spent most of her college years studying Karl Marx. She admires his thought processes. If you noticed, every agenda that she has tried was another social program that would be government run and tax payer paid for..... So if you live in the USA, watch your backside, unless you are for socialism...then I would say that you are winning, slowly winning.. [ + quote]
ZippyDSM (AfterDawn Addict) 8 June 2007 14:43
Originally posted by dufas: Not all hardcore corporate types of the type you suspect. Many have a socialist even communistic bent. It is their ego and elitism that make them think that they are above the government. Carl Riener has come out and said he is for communism. When asked if he doesn't fear that he would be ran over along with everyone else, his reply was that he is too important of a person to be controlled by any government's political edicts.. Rob, his son, has paraphrased his father's comments. Both of these people are heavily involved in the entertainment industry and none of the other 'suits' have ever rebutted their statements. Danny Glover just went to south America and collected $80,000,000.00 to make an anti-American movie. He did this right after going to Cuba to give his condolences to Castro. There are many wealthy people, corporate heads, and entertainers that would like to see America turn socialist. Hillary Clinton spent most of her college years studying Karl Marx. She admires his thought processes. If you noticed, every agenda that she has tried was another social program that would be government run and tax payer paid for..... So if you live in the USA, watch your backside, unless you are for socialism...then I would say that you are winning, slowly winning.. Sadly its either capitalisim that hates the poor to the point of ignoring them or "bi polar" socilisim thats pretty much the only choice you have anymore at least thats how I see the the "divide",Bush showed that any candidate can go insane in office and and dredge the party line and stick with it while the party panders for votes and look good against what the White house is for. Our system is so broken sometimes its not even funny I will not vote for Comrade Hillery not with the attack she did on video games,I would not mind a stable and sane Rep but most are meat puppets on a stick and on the other side the dems have mindless elites....I like Obomba,Ron Paul and Thompson yes I can stand a couple reps but if they start pandering they are gone from my list..I am a hairs thread from goign 3rd party permanent for life. this is goign to slide off topic if you want to rant/btch/jaw further PM me ^_~ [ + quote]
ericg8 (Newbie) 8 June 2007 15:15
Here is my top 10 about the music and film industry. 1) They got a fee from every blank audio and vidio tape sold in America by using the same enless whining as this. 2) They were opposed to the advent of VHS, the CD and the DVD as "the death of their industry" 3) The music industry illegally fixed prices on commercial CDs for 20 years, resulting in prices artificially double what they would have been. When caught, no one went to jail, and the industry paid an insignificant fine. 4) The music industry illegally paid radio stations to force thier crappy music down our throats. 5) The music industy continues with payola, but they are more sofisticated now so as to avoid going to jail. 6) The music and film industries refuse to accept the ways that legitimate users want to use content. 7) The music industy has a history of using and abusing artists. Just ask Price or John Fogerty. 8) The music and film industry inconvenience us with thier crappy schemes. 9)The music industry markets poor lifestyle imagery to children. 10) Britany Spears. [ + quote]
vvu (Newbie) 8 June 2007 21:05
If the music industry returns the money to people who had bought albums with no music value,it would be celebration all over the world.And I have always wondered why are the prices so high as we all know that an insignificant portion of the money goes to the artist or the band that makes the music.The problem with the original audio CD is that for 2 or 3 good songs you are obliged yo byu the whole album,which ,I think it is not fair,even if you call to the market laws of any country.That's why most people download music from internet,and if they see a chance to do it free,they take it.They don't care if the artist profits of that just like the artist doesn't care if a man gives his last money for his album and if he is not pleased with it. [ + quote]
Steve83 (Member) 8 June 2007 21:53
Quote: It is popular music that is illegally file-shared most frequently. Hmmm... Lemme see if I'm unnerstanning this: you're trying to tell me that the POPULAR stuff is what MOST people are after? I suppose the next thing you'll tell me is that the expensive stuff costs more, or that loud things make more noise. How stupid do they think we are? So, MR. IFPI; Bottom-line this whole situation for me, since I'm so dumb. What's your current profit margin, and what was it 10 years ago? [ + quote]
atactic (Newbie) 8 June 2007 23:32
The music (and video) industry cashes in a copyright fee for each piece of music sold => Why can I not exchange my old vinyl plates for a CD, or my old CD for an audio DVD, from just the production costs of the support, since I already paid for the copyight ? THIS IS REAL PIRACY The price of music does not decrease with the sales number => Whatever the sales number, 100 or 100,000,000 CDs, the price is always the same for a CD; CD sales would be much stronger if price would be more accessible, especially for CDs which sell in very large number, not making music stars less but eventually rather more, rich, due to increasing sales numbers. Read "the market function of piracy" here: http://mises.org/story/2590 [ + quote]
sammorris (AfterDawn Addict) 9 June 2007 0:06
Quote: I suppose the next thing you'll tell me is that the expensive stuff costs more, or that loud things make more noise. How stupid do they think we are? Lol that's superb. Of course P2P networks help discover new music, but that's not going to add up to the sum of people who hear a song on the radio, download it using Kazaa (heaven forbid) and keep their pc safe from the viruses using Norton Antivirus because the guy in PC world told them to buy it. That's a pretty substantial userbase, and a pretty closed minded one as well, so while what the IFPI said was retarded, it was true, of course it was. [ + quote] This message has been edited since posting. Last time this message was edited on 9 June 2007 0:07
ZippyDSM (AfterDawn Addict) 9 June 2007 0:49
Quote: [quote]It is popular music that is illegally file-shared most frequently. Hmmm... Lemme see if I'm unnerstanning this: you're trying to tell me that the POPULAR stuff is what MOST people are after? I suppose the next thing you'll tell me is that the expensive stuff costs more, or that loud things make more noise. How stupid do they think we are? So, MR. IFPI; Bottom-line this whole situation for me, since I'm so dumb. What's your current profit margin, and what was it 10 years ago?[/quote] =================================================================== =================================================================== or whatver costs the most is the best because it costs more... .... ... LOL [ + quote]
snige (Inactive) 9 June 2007 3:10
Labels do not loose money from piracy. people who download films or music or whatever, wouldn't buy the real product anyway so any money figures that get banded about are complete crap. It's just money that the fat cat b****rds are not pocketing. [ + quote]
waynebaal (Newbie) 9 June 2007 15:36
Just because I am a pedant, the English spelling of the word 'organised' IS 'organised. Americans spell it with a 'z', which doesn't make it right or wrong, just different. :) [ + quote]
hermes_vb (Senior Member) 9 June 2007 17:41
Originally posted by waynebaal: Just because I am a pedant, the English spelling of the word 'organised' IS 'organised. Americans spell it with a 'z', which doesn't make it right or wrong, just different. :) Well, thank you Shakespeare for enlightening us with such a deep knowledge of the English language. You don't how many sleepless nights I've spent pondering the difference between the two. [ + quote]
ChiefBrdy (Junior Member) 9 June 2007 17:58
Gee whiz. I feel so bad for these poooooor performers. Concert today; soup line tomorrow. What a tear-jerker With all of the major otrocities going on around the world today. Who friggin cares about the current state of P2P Average soldier's salary in Iraq - $45,000 per YEAR How much popular performers make per concert. From Variety Magazine, Polster and Timesjlt: Madonna $4.6 million per concert McCartney averages $2.2 million per concert U2 $2.0 million John/Joel $2.3 million Eagles $1 million Bon Jovi: $560,000 a night Bruce Springsteen & The E Street Band; $1.13 million The Who; $984,005 George Strait; $846,344 Neil Diamond; $823,202; Cher; $789,976 Aerosmith; $754,756 Shakira; $689,520 Creed; $422,793 Rush; $414,560 Tom Petty & The Heartbreakers; $381,872 Alan Jackson; $339,611 No Doubt; $325,276 Tony Hawk�s Boom Boom HuckJam; $319,270 Lord Of The Dance; $307,955 Nelly; $301,116 Enrique Iglesias; $296,982 Toby Keith; $296,212 Korn; $279,524 [ + quote]
ZippyDSM (AfterDawn Addict) 9 June 2007 18:13
Originally posted by ChiefBrdy: Gee whiz. I feel so bad for these poooooor performers. Concert today; soup line tomorrow. What a tear-jerker With all of the major otrocities going on around the world today. Who friggin cares about the current state of P2P Average soldier's salary in Iraq - $45,000 per YEAR How much popular performers make per concert. From Variety Magazine, Polster and Timesjlt: Madonna $4.6 million per concert McCartney averages $2.2 million per concert U2 $2.0 million John/Joel $2.3 million Eagles $1 million Bon Jovi: $560,000 a night Bruce Springsteen & The E Street Band; $1.13 million The Who; $984,005 George Strait; $846,344 Neil Diamond; $823,202; Cher; $789,976 Aerosmith; $754,756 Shakira; $689,520 Creed; $422,793 Rush; $414,560 Tom Petty & The Heartbreakers; $381,872 Alan Jackson; $339,611 No Doubt; $325,276 Tony Hawk�s Boom Boom HuckJam; $319,270 Lord Of The Dance; $307,955 Nelly; $301,116 Enrique Iglesias; $296,982 Toby Keith; $296,212 Korn; $279,524 well you also have to remember from that they pay saliers and insurance on wokers and equipment thats 10-50G+ it can vary more then add the cost of gas buses and insurance theres another 50G+ in any case they make that money back but thos on the lower rungs have a hell of a time doing it and the media mafiaa makes sure that they have to be beholdant to them in order to get to where you are making a good living. also touring can be a pain in the ass. I dont really blame the artists they get screwed from every angel and only a few make enough moeny to live realtivly well from. [ + quote]
sammorris (AfterDawn Addict) 10 June 2007 3:08
Some people get rich, being a music artist is one of the more popular avenues to it, we're not really moaning about how much the artists get here, if anything it's how much they don't get paid, and how much the labels get. [ + quote]
waynebaal (Newbie) 10 June 2007 3:29
Quote: Originally posted by waynebaal: Just because I am a pedant, the English spelling of the word 'organised' IS 'organised. Americans spell it with a 'z', which doesn't make it right or wrong, just different. :) Well, thank you Shakespeare for enlightening us with such a deep knowledge of the English language. You don't how many sleepless nights I've spent pondering the difference between the two. Hmmm....my name isn't Shakespeare, numpty-head. I was just responding in a light-hearted way to the criticism of someone further up the post regarding the inability to spell 'organized' correctly. Sorry if this upset you, Einstein. Ooops....you're not Einstein. My bad. :) [ + quote]
avoidz (Junior Member) 10 June 2007 3:54
"The FTC estimates that U.S. consumers may have paid as much as $480 million more than they should have for CDs and other music because of these policies over the last three years. These settlements will eliminate these policies and should help restore much-needed competition to the retail music market, consisting of $15 billion in annual sales. Today's news should be sweet music to the ears of all CD purchasers". Read more: May 10, 2000 Record Companies Settle FTC Charges of Restraining Competition in CD Music Market [ + quote] This message has been edited since posting. Last time this message was edited on 10 June 2007 3:57
sammorris (AfterDawn Addict) 10 June 2007 3:58
Let's hear it for the FTC... and as for waynebaal and hermes, take it elsewhere, nobody's interested. [ + quote]
ChiefBrdy (Junior Member) 10 June 2007 5:27
Quotes: Just because I am a pedant, the English spelling of the word 'organised' IS 'organised. Americans spell it with a 'z', which doesn't make it right or wrong, just different. :) _____________________________________________________________________ Well, thank you Shakespeare for enlightening us with such a deep knowledge of the English language. You don't how many sleepless nights I've spent pondering the difference between the two. _____________________________________________________________________ Hmmm....my name isn't Shakespeare, numpty-head. I was just responding in a light-hearted way to the criticism of someone further up the post regarding the inability to spell 'organized' correctly. Sorry if this upset you, Einstein. Ooops....you're not Einstein. My bad. :) _____________________________________________________________________ Kan wee evar git thrue WON thred withoutt sum self importtant repressd A-WHOLE throweing out yet an other englich lesan!!! [ + quote] This message has been edited since posting. Last time this message was edited on 12 June 2007 16:52
avoidz (Junior Member) 10 June 2007 5:48
Okay, now let's keep this on-topic, hey. [ + quote]
sammorris (AfterDawn Addict) 10 June 2007 6:38
Indeed, and Chiefbrdy edit your post to correct the quote. [ + quote]
whatname (Newbie) 10 June 2007 8:33
Quote: Reduced revenues for record companies mean less money available to take a risk on "underground" artists This is a pisstake right? It looks like it was written by someones trainee or something. The music industry have for decades made billions sellin overpriced media, and only a small percentage goes to the artists anyway. The music scene has never been so vibrant, accesible and varied. The labels have to accept their time is up. Also fuck I-tunes [ + quote]
elporro69 (Newbie) 10 June 2007 10:47
Originally posted by waynebaal: Just because I am a pedant Merriam-Webster definition of "Pendant" a : one who makes a show of knowledge b : one who is unimaginative or who unduly emphasizes minutiae in the presentation or use of knowledge In other words you are kind of a jerk and the other guy was right. LOL. [ + quote]
sammorris (AfterDawn Addict) 10 June 2007 11:33
They were both right. whatname: That's the one that had me in fits and giggles. Who do they expect to believe that? [ + quote]
waynebaal (Newbie) 10 June 2007 21:51
Quote: Originally posted by waynebaal: Just because I am a pedant Merriam-Webster definition of "Pendant" a : one who makes a show of knowledge b : one who is unimaginative or who unduly emphasizes minutiae in the presentation or use of knowledge In other words you are kind of a jerk and the other guy was right. LOL. I thought a 'pendant' was an item of jewellery? [ + quote]
bvan (Newbie) 12 June 2007 13:15
pendant could also laughingly be thought of as "a hanged man" with just a little bit of imagination. (-ant +u)[fr] [ + quote]