Major Copyright Judgement

[Piggy]

Thanks for posting, I'm not sure I get the numbers though. According to the numbers posted, it looks more like the break even point comes at 50% and the benefit for artists under that mark is in the single digits, while the lost sales above that are into four digits.

Aside from that, his methodology seems to be based on the difference between sales after the RIAA lawsuits, which frankly, didn't change the downloading habits of anyone I know. Also, it looks like his numbers still only measured sales through mainstream outlets. I know one small record company that had to be downgraded from a business into a hobby as downloading decreased his market, and I know a good number of artists and labels fall beneath the view of these studies.

I don't think anyone has a good methodology yet, nor solid numbers.

But it seems to me that if there were indeed good solid research showing harm, it would be easy to find.

Yet all I could find was a Heritage Foundation paper which admitted that they couldn't document any harm, but which proposed that harm was inevitable because (in true think-tank form) their beliefs about economic theory said that it must be.

One article ended with an RIAA rep citing some names of groups that supposedly did studies that supported their position, but no links and I couldn't find those studies.

But you're right to point out that if the top/bottom split is accurate, then we have to consider that the "top 1/4" of acts probably generate the lion's share of revenue, while the "bottom 3/4" generate less, despite their greater numbers. So if file sharing / piracy boosts sales for the lower tier while harming sales for the upper tier, we might still be talking about a serious problem for the companies that produce and distribute the majority of music.

I was talking with some guys up at the Terry College's (UGA) Music Business program a few months ago, and believe me, they're all about trying to figure out how to change business models to continue making a profit, b/c the existing models don't work anymore.

Everything's changing right now, and the technology is what's doing it.

But that said, I have to stand by my post... I had been hearing that there were numbers out there showing direct harm, and I just can't find substantiation for those claims right now.

The HF article was very telling on that count, b/c if there were documentation out there, I can't imagine that those guys would have failed to cite it.

 

[GreyICE]

Another problem is that the music revenue generating model is, to put it kindly, screwed up beyond all belief. One of the reasons that music artists can benefit from it is that they make most of their money off their live performances (with a few exceptions).

This model means that loss of revenue in album sales can be made up for in live concert sales because album sales are typically a smaller portion of their revenue. So this can and does make it a net benefit to artists many times.

Explanations of how this translates into the video game world with programmers going 'on tour' have lacked in the forthcoming.

 

[Cavemonster]

I don't think anyone has a good methodology yet, nor solid numbers.
...
The HF article was very telling on that count, b/c if there were documentation out there, I can't imagine that those guys would have failed to cite it.

I think it's an immensely hard thing to document, but I stand by the basic economics of it. Even though there is some elasticity to it, there is a limit to how much media one person consumes. When there is a player in the market that gives out almost any kind of media for free, with no real legal risk for most downloaders, then that must decrease the demand for other media. We're eliminating most of the the economic reasons to pay for media, leaving mostly social and moral reasons. And relying on social or moral controls with very little feedback is a tragedy of the commons kind of situation.

But let me clarify something of my own position. Whether or not downloading affects record sales isn't a concern for the law, because it is going to happen whether it's legal or not. Unless there's a sea change in the way our technology works, you can't stop downloading while the net in general is a free platform. So the question of how downloading effects record sales is one for the record companies to consider- as it becomes completely ubiquitous, will they need to throw out their revenue model entirely?

 

[Lolly]

I think the vendors should consider "value-adding" to the sale of the electronic media to encourage sales. I don't download, but when all you get is a cd disk you get nothing more than you'd be able to download. When you used to buy software, you'd get hard-copy manuals with them, which I always like having. I suppose not everyone likes books and art-work and whatever else you get with a purchased copy, so maybe I'm out of touch here.

 

[BobTheDonkey]

I think it's an immensely hard thing to document, but I stand by the basic economics of it. Even though there is some elasticity to it, there is a limit to how much media one person consumes. When there is a player in the market that gives out almost any kind of media for free, with no real legal risk for most downloaders, then that must decrease the demand for other media. We're eliminating most of the the economic reasons to pay for media, leaving mostly social and moral reasons. And relying on social or moral controls with very little feedback is a tragedy of the commons kind of situation.

I'll agree with this. But the question is: Is this limit to a person's consumption of music dictated by cost/overall expenditure or by availability of desired albums?

Take me, for instance. Now, I've set limits before (as I've stated) where I somewhat forced/limited myself to purchasing a single album every 1st and 15th when I was paid. While I do have a CD collection, I don't desire to own every album that hits the charts, many of those albums would A) have a single track I would enjoy or B) do not fit my personal tastes so this is one set of my limit - there must be an album that I truly desire to purchase.

Ultimately, however, my limit is set by economics - I only want/can afford to purchase one album per pay period. Regardless of how many albums there are that I want to purchase (perhaps none this pay period, perhaps two next), I'm still only going to purchase one.

In a given year, I will only purchase 26 albums, regardless of how many albums are released that I desire to own. Therefore, as long as I have purchased my 26 albums in the year, does my pirating of any other albums cause any real loss in profit to the distributor?

But let me clarify something of my own position. Whether or not downloading affects record sales isn't a concern for the law, because it is going to happen whether it's legal or not. Unless there's a sea change in the way our technology works, you can't stop downloading while the net in general is a free platform. So the question of how downloading effects record sales is one for the record companies to consider- as it becomes completely ubiquitous, will they need to throw out their revenue model entirely?

I don't know that it needs to be thrown out entirely, but their PR definitely needs a different approach. Part of the reason iTunes and it's ilk are so popular is the ability to pick and choose specifically which song(s) you want off an album. Packaging dead-weight songs on an album is common practice and not conducive to encouraging people with limits to waste one of their purchases on an album with a single desired track.

 

[BobTheDonkey]

I think the vendors should consider "value-adding" to the sale of the electronic media to encourage sales. I don't download, but when all you get is a cd disk you get nothing more than you'd be able to download. When you used to buy software, you'd get hard-copy manuals with them, which I always like having. I suppose not everyone likes books and art-work and whatever else you get with a purchased copy, so maybe I'm out of touch here.

That's not entirely true. I purchase CDs vs MP3/AAC downloads specifically for the increase in sound quality (yes, it's really there. yes, it's really audible). There are, currently to my knowledge, no sites available to purchase lossless tracks. Mostly due to a lack of demand - let's face it, iPod speakers aren't exactly of the highest quality and the difference between an AAC and Lossless would be negligible - as well as file size.

 

[Lolly]

specifically for the increase in sound quality (yes, it's really there. yes, it's really audible).

Oh, right. I've still got vinyl and tapes as well as cds. I'll put up with anything as far as sound quality goes Your point is another good reason to buy, though. I was just referring to how you used to get STUFF with your purchase. Vinyl albums would have fold out covers and photos and things that you wanted to have when you were a "fan" of somebody.

 

[Belz...]

This is a fantastic example of begging the question.

Of course if content creators have a "right" that we observe copyright law exactly as it exists, then we should do so.

The problem is, I've never seen any sensible case that they should have such a "right".

To my mind a "right", if it exists at all, is just a privilege such that it happens to work out well for everyone if we extend that privilege to everyone. Copyright does not fit that description in its current incarnation.

So, again, you think that people who compose, say, a song, are not really the owners of that song ?

 

[Belz...]

Anti-piracy advocates would have us believe that any and all works of art that are published/recorded/marketed are guaranteed to provide a profit/return to the artist/distributor. This is just simply not the case.

Indeed. And if it IS the case, that case is made of straw.

But nobody's arguing that.

 

[Ethan Thane Athen]

Another problem is that the music revenue generating model is, to put it kindly, screwed up beyond all belief. One of the reasons that music artists can benefit from it is that they make most of their money off their live performances (with a few exceptions).

This model means that loss of revenue in album sales can be made up for in live concert sales because album sales are typically a smaller portion of their revenue. So this can and does make it a net benefit to artists many times...

I believe that's a recent adaptation - at least partly down to falling record sales / revenue. During the seventies and eighties for instance, it was common for tours to lose money (even for very successful artists) and they were mainly used to promote record sales.

 

[Ethan Thane Athen]

I think it's an immensely hard thing to document, but I stand by the basic economics of it. Even though there is some elasticity to it, there is a limit to how much media one person consumes. When there is a player in the market that gives out almost any kind of media for free, with no real legal risk for most downloaders, then that must decrease the demand for other media. ...

I'd posit the opposite. It might limit the demand (in revenue terms) for that media but could well increase the demand for other media. People have a certain amount of disposeable income - and they like to spend it. If they get some stuff for free then the money they would have spent on it goes on other things...or they may just spend it on other items of the same media (see my earlier 'might').

 

[GreyICE]

I believe that's a recent adaptation - at least partly down to falling record sales / revenue. During the seventies and eighties for instance, it was common for tours to lose money (even for very successful artists) and they were mainly used to promote record sales.

Sorry, making money and the artists making money are two different things. This rant should explain it:
http://www.aandronline.com/reading-room/whats_fair.html

The record companies might view the tours as promotional material for the records, but for the artists they are their main source of income due to the way contracts are set up with the record companies.

Thus, piracy nails the record companies, but isn't a huge damage to the artists (and may even be a net benefit). Since many of them have a love/hate (or just plain hate) relationship with record companies, this is not a terrible thing for them.

The same is just not true in the video game market.

 

[Ethan Thane Athen]

Sorry, making money and the artists making money are two different things. This rant should explain it:
http://www.aandronline.com/reading-room/whats_fair.html

The record companies might view the tours as promotional material for the records, but for the artists they are their main source of income due to the way contracts are set up with the record companies.

Thus, piracy nails the record companies, but isn't a huge damage to the artists (and may even be a net benefit). Since many of them have a love/hate (or just plain hate) relationship with record companies, this is not a terrible thing for them.

The same is just not true in the video game market.

Thanks for that. Your last but one para is likely to make people think piracy is a good thing mind....

I was basing my understanding on various music biographies of artists from the seventies and eighties where the tours were often cited as losing them (the artists) money which had to be re-couped in record sales or merchandising. Also, the division between artist and record company / management is not always so clear. As an example, Gary Numan (whose management was a family affair and who had his own record label) has frequently stated how he lost money doing his concerts in the early eighties, despite them being sellouts, but that he recouped it in record sales.

 

[GreyICE]

Thanks for that. Your last but one para is likely to make people think piracy is a good thing mind....

I was basing my understanding on various music biographies of artists from the seventies and eighties where the tours were often cited as losing them (the artists) money which had to be re-couped in record sales or merchandising. Also, the division between artist and record company / management is not always so clear. As an example, Gary Numan (whose management was a family affair and who had his own record label) has frequently stated how he lost money doing his concerts in the early eighties, despite them being sellouts, but that he recouped it in record sales.

The record companies were significantly either more ethical or less refined in the 70s (I'm inclined to think it was a matter of refinement, as there didn't appear to be any holdouts when it came to going the unethical route - they all jumped on).

As for piracy in the music market, I don't like it, but I find that I cannot ignore the evidence that it just doesn't hurt the artists due to the fact that they never make much money off of albums (so lost sales of something that wasn't making them money doesn't lose them money). If you wish to call this pro-piracy so be it. I call it not ignoring the evidence. There is no evidence that it's not a net loss to the business as a whole, by the way - the record companies do take a hit (how much you care about them is entirely up to you).

The fact that the 'woohoo piracy, I love stealing' crowd jumped on this and has tried to roll it into video games and movies, where there is NOT a screwed up revenue model, and there are no tours and only the most limited of merchandise sales, should say how logically they are thinking. It's one of the reasons that they'll drag any piracy issue back to music, no matter what you're discussing, because they have some inkling that they can win on music, and no matter how badly warped the logic centers of their brains are, they can still work out that computer programmers don't go on tour.

 

[Gate2501]

The fact that the 'woohoo piracy, I love stealing' crowd...

More emotionally charged allegations? They may arouse you a great deal in the throes of your nerd rage, but really don't help your argument one bit.

...jumped on this and has tried to roll it into video games and movies, where there is NOT a screwed up revenue model, and there are no tours and only the most limited of merchandise sales, should say how logically they are thinking.

I really don't think that anyone has tried to conflate the revenue models between games/movies and music for the purposes of making a pro-piracy argument. We all know full well that game programmers don't go on tour.

It's one of the reasons that they'll drag any piracy issue back to music, no matter what you're discussing, because they have some inkling that they can win on music

I think that the conversation simply segued off into music. I don't see how anyone deliberately did this in an attempt to conflate the revenue models in support of their argument.

, and no matter how badly warped the logic centers of their brains are, they can still work out that computer programmers don't go on tour.

Annnnd, you are still angry. Calm down bud.

I do see the point of your anger though, the straw man who can't work out that computer programmers don't go on tour probably does have some "badly warped logic centers".

 

[GreyICE]

Cute Gate, nice way to chop my post up and pretend I wrote something I didn't. I can see that baiting amuses you, kid

 

[Gate2501]

Cute Gate, nice way to chop my post up and pretend I wrote something I didn't. I can see that baiting amuses you, kid

No, I really didn't. You were accusing people of conflating the revenue models for music and movies/games, then attacking these imaginary people for being morons.

I wasn't baiting you at all, kid.

 

[BobTheDonkey]

Since we want to discuss game pirating, rather than music pirating now...

Ok.

The revenue model still stinks. For the same reason the music model stinks.

I have a limited budget. I can afford one game every three months. That's a total of four games per year, regardless of how many are released that I want. If I purchase those four games and download/pirate the others, what real loss has the Developer suffered? I wasn't going to purchase any further games this year, whether I got them or not.

The developers have priced themselves right out of a market, the same as the music industry.

Besides, a pirated game is likely to have little, to no, DRM requirements such as an internet connection for a single player game. So when I'm on an inter-continental flight and want to play my game, I can do so where with the purchased copy I couldn't. That's a win for the pirate.


So, the issue really remains the same. Can anyone show that piracy has actually caused the loss in revenue? As has been stated before, Person A will still only spend X amount of dollars/pounds/euros/etc every year - regardless of how many albums are on the shelves, how many albums are released, how many albums he/she desires, etc. But it's not that people limit themselves so much to "two albums per month", they limit themselves to "$30 for music per month," it just so happens that $30 is about two albums. Regardless of how many albums/songs are purchased (because it applies to music downloads the same way), Person A will still only spend $30/month.

 

[Gate2501]

Since we want to discuss game pirating, rather than music pirating now...

Ok.

The revenue model still stinks. For the same reason the music model stinks.

I have a limited budget. I can afford one game every three months. That's a total of four games per year, regardless of how many are released that I want. If I purchase those four games and download/pirate the others, what real loss has the Developer suffered? I wasn't going to purchase any further games this year, whether I got them or not.

The developers have priced themselves right out of a market, the same as the music industry.

Besides, a pirated game is likely to have little, to no, DRM requirements such as an internet connection for a single player game. So when I'm on an inter-continental flight and want to play my game, I can do so where with the purchased copy I couldn't. That's a win for the pirate.


So, the issue really remains the same. Can anyone show that piracy has actually caused the loss in revenue? As has been stated before, Person A will still only spend X amount of dollars/pounds/euros/etc every year - regardless of how many albums are on the shelves, how many albums are released, how many albums he/she desires, etc. But it's not that people limit themselves so much to "two albums per month", they limit themselves to "$30 for music per month," it just so happens that $30 is about two albums. Regardless of how many albums/songs are purchased (because it applies to music downloads the same way), Person A will still only spend $30/month.

GreyICE was talking about the revenue generated by the artists themselves vs. the labels, he is indeed correct that the music industry is very different in how much piracy hurts the artist(assuming that there is some damage for the sake of the hypothetical comparison between models).

Those same artists(now game designers/programmers instead of musicians), when making a PC game, have no outlet to get paid other than the sales of that game. They can't go on tour and sell merch like a band can off of the fame generated by their albums popularity.

ETA: You totally ruined my argument that no one was conflating the revenue models! Boo!

 

[BobTheDonkey]

GreyICE was talking about the revenue generated by the artists themselves vs. the labels, he is indeed correct that the music industry is very different in how much piracy hurts the artist(assuming that there is some damage for the sake of the hypothetical comparison between models).

Those same artists(now game designers/programmers instead of musicians), when making a PC game, have no outlet to get paid other than the sales of that game. They can't go on tour and sell merch like a band can off of the fame generated by their albums popularity.

ETA: You totally ruined my argument that no one was conflating the revenue models! Boo!

Well, if you want to talk about revenue model for artists, sure, that's different. But for the developer/distributor it's the same.