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Tuesday, October 16, 2012

Chickens and Eggs in Music Consumption

As I blogged about in my previous post, the Copyright Culture survey, which looks at music consumption habits in the U.S. and Germany, has leaked in bits and pieces. Another interesting tidbit found its way to TorrentFreak yesterday. It turns out that p2p file sharers, both in the U.S. and Germany, have bigger music collections than non p2p file sharers. Perhaps more importantly, the file sharers buy more music than their counterparts. U.S. file sharers bought 30% more music, and German file sharers almost 300% more music, than non-p2p luddites. [TorrentFreak has a nice chart that breaks this down for you.] The tone of TorrentFreak's summary suggests that this means file sharers are the best friends the music industry could have, because they love music. I am a bit skeptical, because there's another way to cut the same data, which I share after the break.

File sharers bought more music than non file sharers, but they also obtained more music without paying for it. U.S. file sharers paid for only 38% of the items in their collection, while non file sharers paid for 47% of their music. And the difference was more stark for German consumers. German p2p users paid for only 26% of their music, while non p2p users paid for 60% of their music, although this amounted to significantly smaller sales.

Do non p2p users buy less music than their counterparts because they aren't exposed to as much music as p2p users? Or do p2p users pay for a smaller proportion of their music consumption because they elect to use more unauthorized avenues to purchase music? I don't have an answer. I'm slightly more sympathetic to the latter interpretation than the former, but I'm really interested to see what the full report looks like, when it's released.

Posted by Jake Linford on October 16, 2012 at 09:30 AM in Intellectual Property | Permalink

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Is the data supposed to be broken down by genre, artist, album, song, etc in the eventual report? It'd be interesting to see if the p2p users' purchases differ significantly from the non-p2p users'. I'd hypothesize that the majority of non-p2p users' purchases tend towards conventionally popular music, while p2p users' purchases would show a wider variety of types of music, artists, etc. For many people, p2p services were simply the easiest way to find what you wanted; the costs to obtaining digital music (both in terms of transactions costs and monetary costs) legally simply outweighed the benefits. As the calculus continually shifts towards wider availability (first with iTunes, and now even moreso with Spotify) at a reasonable price, I think we'll see a corresponding decrease in the use of "illicit" music distribution mechanisms like BT.

Posted by: TDG | Oct 16, 2012 4:02:33 PM

TDG, you may be right about easy (and ideally, cheap) authorized options cutting into the incentive to use unauthorized options. I chuckle every time I hear the Spotify ad claiming that copyright infringement is so outdated, because everyone can now get all the music they want on Spotify. That's not entirely true. Just yesterday, I discovered to my dismay that I couldn't find London Calling by the Clash.

I'm not sure how the data will be broken down in the final report, but that would be useful information to have.

Posted by: Jake Linford | Oct 17, 2012 10:09:09 AM

I actually had the exact same experience with London Calling. Usually Spotify seems to have everything (e.g., David Bowie), nothing (e.g., the Beatles), or just the singles (e.g., Major Lazer). I haven't often found group like the Clash, where some full albums are available but not others - must be a label deal thing.

It'd also be interesting to see what effect (if any) streaming services like Spotify are having on music collections of all stripes (whether downloaded, ripped, purchased, etc). Speaking from personal experience, if I can find something streaming on Spotify within my premium subscription, I'm incredibly unlikely to buy it unless there's some non-listening-related reason (e.g., great cover art, in which case I'd try to find it on vinyl).

Posted by: TDG | Oct 17, 2012 4:31:18 PM

I've never engaged in any file sharing at all (and not for moral reasons- I've just never done it.) But several years ago, when I lived in Russia, I would occasionally go to the huge outdoor CD and video market Gorbuskha in Moscow. (It's been at least mostly tamed for many years.) At the time, it was nearly all, maybe completely, pirated CDs, movies, and software. I, like most people at the time, couldn't afford to buy the "real" things at the market price. So, people didn't loose out from me- what I bought there I wouldn't have otherwise bought at all. But, in quite a few cases, once I got interested in a group or musician from what I bought there, I later, when I had the money, bought on the "white" market. (Among other things, the pirated copies tended to be of lower quality, though they did sometimes have very funny cover-art- my favorite was a Simon and Garfunkel disk with Boris Vallejo art for the cover- something like this: ) But in this case, having bought the pirated stuff lead me to buy "real" music that I never would have otherwise. My impression was that that was at least not uncommon.

Posted by: Matt | Oct 17, 2012 8:24:31 PM

Ah, my Boris Vallejo link didn't go through. It should be here:

http://vallejo.ural.net/1997/show.php?012

And Borbushka is here:

http://en.wikipedia.org/wiki/Gorbushka

Posted by: Matt | Oct 17, 2012 8:25:28 PM

Matt: That Vallejo painting just screams "Bridge Over Troubled Waters".

On a more serious note, echoing both Matt and TDG, free sometimes leads to paid. Josh Ritter streams all his albums online. So do OK Go. I've bought multiple albums form both. I've purchased on CD every Bowie record that I copied from my uncle. And yet, I once bought a bootleg DVD, unavailable at the time in the U.S., that I swore I would replace with a legitimate copy once one was offered. I still have not done so. Good intentions don't always win out.

Posted by: Jake Linford | Oct 18, 2012 8:40:23 AM

TDG: With regard to Spotify, I'm not troubled by streaming replacing purchased, at least to the extent that Spotify is actually paying to the artist what it says it's paying. Here's why: a CD purchase price falls within a fairly narrow range, and doesn't account for how much I actually use or enjoy the CD. When I was young, I paid $20(!) for "Please Hammer, Don't Hurt 'Em," and $20 for the Black Crowes "Southern Harmony and Musical Companion." I probably played "Hammer" five times. I've played "Southern Harmony" a minimum of 200 times since I purchased it. A higher number seems very likely. If I were streaming both, the Crowes would have received many more payments over time than Hammer, and that is as it should be. I love that mechanism for rewarding the artist who creates something with replay value.

There's a tradeoff to streaming, though. You don't own it. If the service goes under, you no longer have access to this thing you had. That's why, if I find something I love on Spotify, I drop the money on a CD, so that I have access I won't lose should Spotify close up shop.

Posted by: Jake Linford | Oct 18, 2012 8:40:35 AM

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