• US TPP Negotiators Accused Of Bullying; Refusing To Budge On Ridiculous IP And…

    27 Nov 2013, 00:13 by Milkshake8

    This is hardly a surprise, but more reports are coming out revealing that the US's ongoing strategy in negotiating the TPP (Trans Pacific Partnership) agreement is to not take into account the many, many concerns about the US's hardline, maximalist position on both intellectual property issues and efforts to give corporations sovereignty over national laws under the misleadingly named (and purposely boring) "investor state dispute settlements" (ISDS). You would think that with widespread dissection and concerns expressed about the leaked intellectual property chapter, that the USTR might possibly ease up on its crazy maximalist demands. Not so -- but that's to be expected when you have Stan McCoy as the lead negotiator on intellectual property issues. McCoy is a famed extreme maximalist on IP issues who has more or less admitted to having no interest at all in hearing from public interest groups, while lapping up any opportunity to parrot bogus claims from the industry. McCoy was the same guy behind the embarassing disaster known as ACTA, which flopped so miserably. You'd think he'd take a hint, but instead it appears he's decided to dig in his heels and make sure the US continues to live up to its reputation as an obnoxious bully.

    Multiple reports have called out the US (and McCoy in particular) for its aggression and "bullying" in the negotiations. Others have accused the US of engaging in a "negotiation by exhaustion," in which US negotiators seem to figure if they just stand their ground forever, everyone will eventually be bullied into agreeing to the US's positions.

    ‘The US has adopted a strategy of exhaustion in its bullying of negotiators on the crucial intellectual property chapter to force countries to trade away health in the Trans-Pacific Partnership Agreement negotiations in Salt Lake City’, according to Professor Jane Kelsey from the University of Auckland, New Zealand, who is monitoring the negotiations.

    ‘The US has stepped up its aggression as they move towards their "end point" of the TPPA ministerial meeting in Singapore from 7 to 10 December’, said Professor Kelsey.

    [....] ‘This is a loaded game’, Professor Kelsey said. ‘McCoy sets the agenda and timetable. Negotiators are working from morning until late at night and preparing to work all night, if necessary.’

    The second link above, from a publication in Australia, notes something similar and complains about the Australian government's seeming willingness to side with the US on these issues:

    The United States has been accused of negotiation by exhaustion in last-minute talks in Salt Lake City ahead of the final ministers' meeting that will decide the makeup of the Trans Pacific trade deal between Australia and eleven other nations.

    Information leaking from the closed official-level talks suggests the United States is giving no ground on questions of intellectual property and medicines and is insisting each nation sign up to so-called Investor State Dispute Settlement provisions that would allow global corporations to sue sovereign governments.

    [....] “What is happening is not a negotiation,” said Patricia Ranald, Convenor of the Australian Fair Trade Network. “The United States is dictating the terms and it seems the Australian Government is not prepared to join other governments which are resisting these demands

    While Stan McCoy plays out his own last stand game, pushing for policies that may help a few of his friends in the industry at the expense of the public, hopefully that last point -- about other governments resisting McCoy's attempt to bully them into a really bad deal -- stays true. An analysis of the positions on the IP Chapter, done by Gabriel Michael, highlighted how the US's position is a lot more isolated than it might like. That may explain the bullying behavior. It looks like the USTR is getting desperate, realizing its usual tricks and games aren't fooling most of the other negotiators. As Michael's analysis showed, the US and Japan (two of the strongest supporters of maximalism) appear to be fairly isolated -- issuing a lot more proposals that no one else supports.

    Of course, the USTR is somewhat famous for its ability to start horse trading, promising bogus sweetheart deals if people just agree to awful language that will do massive harm to the public, so it's still something to be quite nervous about until any final text is revealed. Of course, just the fact that the USTR has still refused to reveal the text itself should be reason enough to recognize that this deal is a joke designed to screw over the public. Those acting in the interest of the public don't hide their efforts from the public.
    By Mike Masnick
  • Moby Not Just Giving Away His New Album For Free On BitTorrent, He's Okay With You…

    23 Nov 2013, 04:06 by Milkshake8

    The musician Moby has long been an outspoken critic of the old recording industry. He's been a big fan of giving away works for free (and noting that he's made quite a bit of money from music he's made available for free) and has argued strongly against the old gatekeepers. He's criticized their anti-innovation views, suggested the RIAA should disband for suing music fans, and said he can't wait for the major label gatekeepers to die.

    So it shouldn't be too surprising that Moby happily teamed up with BitTorrent to release his latest album as a BitTorrent bundle for free (you just have to provide an email address). But here's the more surprising part. Not only is he happily making it available for free, but he's actually fine with people profiting from potential remixes or other uses of the music. As he explained in a recent interview with Mashable:

    Are people really free to do whatever they want? Can they sell their recordings?

    I met with the BitTorrent people and they were asking, "What if someone comes up with their own remix and they sell it?" They were wondering what I would want them to do with the money. And my response was that they could take their friends out to dinner or give money to their favorite charity. Even if I make the stems, if they made the effort to make the remix, they should be the ones to profit from it.

    This is a really enlightened view. Even among people who are accepting of how to use free in a business model, we still see artists get uptight about "commercial use" -- even though it's often not entirely clear what qualifies as commercial use. We've long advocated that more people should be open to the idea of allowing commercial use of their works, as the potential benefits for everyone -- including the artist and fans -- could be great. I recognize this still makes some artists (who otherwise support remix and open culture) nervous, but I think as we get more examples of artists who allow for commercial use, and see how well it works, that we'll see more artists get comfortable with allowing others to profit as well.

    The rest of the Moby interview is worth reading as well. He points out that artists who adapt aren't worried about infringement:

    Artists who are adaptable are doing fine. A musician who makes records, tours, DJs, remixes, does music for video games and films is doing fine. If you can learn how to adapt — it's really weird and unhealthy when people talk about restricting progress to accommodate the inability of people to adapt. Every industry has been impacted by [changes in technology] in both negative and positive ways, but I feel like to complain is pointless. I love Thom Yorke, but when I heard him complaining about Spotify, I'm like, "You're just like an old guy yelling at fast trains." I love anything that enables people to have more music in their lives.
    He also talks about how great other services like Spotify, SoundCloud and Pandora are -- and notes that he's actively lobbied Congress not to restrict such services. He also talks about how ridiculous it was when his old label, EMI, tried to control everything to prevent infringement:

    It was about 7 or 8 years ago when I was on EMI, and someone at EMI business affairs contacted my manager and told him that I wasn't allowed to play my own music when I DJ'ed because they didn't want people in the audience pirating it. This was back in the days of the Nokia flip phone. If someone recorded a song in a nightclub it would be the worst sounding recording you could possibly imagine. You probably wouldn't even be able to identify the song. That seemed like nonsense to me.
    Instead, he notes, that wonderful things happen when you stop focusing so much on control, and let creativity and innovation flow:

    My approach is to not try and control it at all. I really like the idea of not just giving people finished content. It's giving them something that if they choose to they can manipulate and play with however they want. There's absolutely no restrictions on it and that makes me happy. When people try to control content in the digital world, there’s something about that that seems kind of depressing to me. The most interesting results happen when there is no control. I love the democratic anarchy of the online world.
    This kind of stuff is very refreshing after the latest round of artists on the wrong side of history trying to hold back creativity, culture, innovation and progress.
    By Mike Masnick
  • Liquid Bear still plays on Android

    18 Dec 2012, 19:22 by Milkshake8

    When killed its radio stations for most of the world, KLastFM and CoboltFM stopped playing.

    But that doesn't mean that radio for Android is dead, because alternative player Liquid Bear rocks on.

    Liquid Bear uses a trick to bypass all those silly restrictions: it uses your data to make playlists, and then pulls the songs from (the russian answer to Facebook). This means that you need a account and a account, but you can simply make an "empty" account with a fantasy name to tap into it's music collection.

    That's a clever solution that other apps might use as well. CoboltFM and KLastFM could use the route, or they could play custom radio stations by pulling the songs from Grooveshark. Grooveshark clients like Dood's Music Streamer and TinyShark could integrate in a similar way.

    Liquid Bear has three main tabs. The left tab is the current playlist, which is built from whatever you select in the right tab. This tab lets you make radio stations based on tags, artists, your own library or the music libraries of your friends, etc. The central tab shows what's playing now, with album art and playback controls.

    Want to see lyrics? You can load 'em from the playback tab (hit the drop-shaped icon) or by long-tapping a song in the playlist.

    The playlist is also the place where Liquid Bear shows that it needs some work done. You can't change the order of the songs in the list, the search box shows white text on a light grey background (it may be different on your phone or tablet), deleting songs ahead of the currently playing track pauses playback, and removing songs already played stops the current track and skips to the next. The playback screen shows elapsed time but doesn't show the song duration, even though it could: if you pull the playback slider it shows how much time remains, so Liquid Bear could show that in the empty space next to the forward button.

    But these are minor shortcomings for an app that does what other players can do no more.

    Liquid Bear is free, and I couldn't find any ads in it. It's definitely worth a try, so head to the Google Play Store to get a copy.

    Liquid Bear
  • RIAA Lobbyists Turn Anti-Pandora Desperation Level Up To 11 - from the…

    21 Jun 2013, 19:12 by Milkshake8

    We've written a few times about MusicFirst, a front group set up by the RIAA (potentially illegally), pretending to lobby for "artists'" interests, but which is entirely about pushing the agenda of the RIAA in increasing royalties. It was originally set up to target terrestrial radio rates, but has had a real hard on for Pandora lately. In April, we wrote about the group's nutty argument that Pandora was deliberately not selling ads to avoid profitability. They honestly claimed that all Pandora had to do was sell additional ads and profitability would be no problem -- leaving out the simple fact that, if Pandora could sell more ads, it would. The ad business is a terrible business, and it's not easy to sell into it. Yet, these lobbyists pretend anyone can just snap their fingers and the ad dollars come rolling in. More recently, they argued that Pandora's attempt to seek the same internet streaming rates that other companies get was "a sick joke." Again, they weren't seeking lower rates as others -- but rather the exact same rates that competitors like iHeartRadio had. And they were told it was a sick joke?

    The latest is really just blatant stupidity. MusicFirst commissioned a study from Jeffrey Eisenach, and apparently they gave him the instructions to do anything possible to make Pandora's rates look "low," because the results of the study don't even pass the most basic laugh test. I honestly, expected some reasonable argument, but got the following:

    Other Retailers Pay as Much or More Than Pandora: Measured as a proportion of revenues, several major "online" retailers, including 1-800 Flowers, Netflix, and, and "brick-and-mortar" retailers, like Best Buy and WalMart, pay about as much as or more than Pandora for the products they purchase from others and resell to consumers.
    Yes, you read that right. They're comparing Pandora to retailers, rather than other streaming sites. But, Pandora is not a retailer like 1-800 Flowers. I mean, you have to be scraping the absolute bottom of the barrel to try to prove your point when the best you can come up with is this totally different and unrelated business of reselling flowers pays a higher rate to its wholesale providers than a streaming radio station pays for licensing its songs. That's not even comparing apples to oranges, because at least both of those are fruit. Even apples to orangutans would be comparing two living things. This is comparing apples to ornamental knickknacks.

    Two of Pandora's Major Online Music Competitors Pay More: "Pandora has made much of the high proportion of revenues it pays out in royalties, but there is nothing surprising or uneconomic about a retailer passing through a high proportion of its gross revenues to the ultimate producers of the products it sells – indeed, at least two of Pandora's major competitors, Spotify and iTunes, pay out higher proportions of their revenues (70 percent) in royalties than does Pandora."
    Of course, once again, iTunes is not a competitor (well, other than the streaming service they just launched, but that's not what's being discussed here). But, of course, iTunes uses music as an enticement to get people to buy iPhones, not to make money directly off of music. And, using Spotify as an example here actually cuts against their argument, since the rates Spotify pays are insanely high as well, took over two years to negotiate, and yet some musicians are still whining that it's not enough.

    Pandora Has Realized Hundreds of Millions in Profits for Investors: "Pandora's initial investors, including venture capital firms and Pandora's executives, have already realized hundreds of millions of dollars in profits since the company's 2011 Initial Public Offering." In addition, "Company founder Tim Westergren sold shares totaling nearly $15 million between January 2012 and June 2013"
    Um, then why didn't the RIAA invest? This argument gets thrown out sometimes by people who don't understand the difference between revenue and equity. Capital gains from investment -- especially for startups -- is entirely different from revenue, yet people who don't understand the difference between income and equity like to compare the two as if it means something. It doesn't. It just makes them look ignorant. You get capital gains from taking an investment risk (many of which don't pan out) and it is not related directly to revenue. The fact that someone who put in a lot of equity is able to capitalize on that is very different from arguing that a business is profitable. If you don't understand the difference between equity and revenue, you really shouldn't comment on it, and it's pretty sad to put it in an official "study" as it just seems to scream ignorance about how these things work.

    Basically, there's no "there" in the study. The best they can do is pretend that Pandora is in a totally different business to attack it. It kind of shows just how desperate the RIAA is getting.
    by Mike Masnick
  • RIAA Makes Drastic Employee Cuts as Revenue Plummets

    26 May 2013, 18:54 by Milkshake8

    New tax records reveal that the RIAA has made heavy employee cuts after revenue dropped to a new low. Over the past two years the major record labels have cut back their membership dues from $33.6 to $23.6 million. RIAA staff plunged from 107 to 60 workers in the same period. The IRS filing further shows that the music industry group paid $250,000 to the six strikes Anti-Piracy system.

    The RIAA has submitted its latest tax filing to the IRS, covering the fiscal year ending March 31, 2012.

    The figures follow the trend we spotted last year and show a massive decline in revenue for the music group. In just two years overall revenue has reduced from to $34.8 to $24.8 million.

    For decades the RIAA has been the anti-piracy Bastion of the Music Industry, but the new numbers show that the group’s financial power is Weakening.

    The drop in income can be solely attributed to lower membership dues from the major music labels. Over the past two years label contributions have dropped to $23.6 million, and over a three-year period The Labels cut back a total of $30 million, which is more than the RIAA’s total income today.

    The Cutbacks are not immediately apparent from the salaries paid to the top executives. RIAA Chairman and CEO Cary Sherman, for example, earned $1.46 million compared to $1.37 million the year before. Senior Executive Vice President Mitch Glazier also saw a modest rise in income from $618,946 to $642,591.

    A lot of the revenue decline has translated into employee cuts. Over a two year period the number of RIAA employees has been slashed almost in half from 107 to just 60.

    RIAA’s Spacious Washington Office

    The reduction in legal costs is even more significant, going from to $6.4 million to $1.2 million in two years. In part, this reduction was accomplished by no longer targeting individual file-sharers in copyright infringement lawsuits, which is a losing exercise for the group.

    Looking through other income we see that the RIAA received $196,378 in “anti-piracy restitution,” coming from the damages awarded in lawsuits against Limewire and such.

    Finally, the tax filing also reveals that the RIAA paid $250,000 to the Center of Copyright Information for the “six strikesScheme. Together with the MPAA the RIAA coughs up half of the CCI budget, but since the fiscal year ended March 2012 it’s probably not the full year payment.

    Overall the filing appears to suggest that The Major Labels believe that The RIAA can operate with fewer funds. This is a trend that has been going on for a few years and it will be interesting to see how long it continues.
    By Ernesto
  • Spotify pushing labels to lower costs, open up free service to phones - Streaming…

    25 Feb 2013, 21:43 by Milkshake8

    Spotify, the Popular Music subscription service, is due to meet in the coming weeks with its major counterparts in the record industry to renew their licensing agreements. The Verge has learned that managers at Spotify are expected to ask for substantial price breaks from the music labels as well as the rights to extend its free pricing tier to mobile devices.

    The Stockholm-based Spotify has already started negotiations with Warner Music and will begin talks with Sony and Universal in the coming weeks, according to several music industry sources. (A Spotify spokesperson declined to comment on this story.) These negotiations with music’s "big three" labels will likely go a long way to determining whether Spotify reaches profitability, a crucial threshold as it increasingly competes with Apple and other cash-rich players in the digital music market.

    Fans and casual observers might think Spotify has already won the streaming music war because of its large and growing audience. But while Spotify has amassed a following of 5 million paying subscribers and 20 million total users worldwide, its business model is still unproven.

    About 70 percent of Spotify’s revenues pays music-licensing fees while another 20 percent covers customer acquisition, these sources said. That leaves 10 percent to pay all of the company’s other costs, including its much praised technology platform. Insiders have told The Verge that this cost structure zeroes out Spotify’s profits.

    Any attempts to plead poverty by Spotify are likely to be met with skepticism by the recording industry. For years, music acts have reported receiving far skimpier royalty checks from Spotify than from other music services, such as itunes. Some acts, including Coldplay, Adele, and Taylor Swift, have refused to distribute their songs through Spotify and other subscription services (It's important to note that many of these holdouts are now on the service). Meanwhile, Spotify raised $100 million last year in its latest funding round. If artists bail on Spotify, it doesn’t matter what cuts labels might be willing to accept. Everyone loses.

    Record company executives have heard for a decade that they need to cut prices. The Industry doesn’t appear to be willing to give much ground. Internet radio service Pandora is lobbying Congress to lower its statutory rates for Playing Songs. The record companies are spending big to thwart the attempt.

    The record companies have plenty of Digital Music alternatives to Spotify. Apple, Google, Microsoft, Amazon, Sony are all companies with very deep pockets who sell music at razor-thin margins or even at a loss. To these companies, music is just one of the ways that they sex up their other businesses.

    Simple rate renegotiation isn’t the only thing on the table. According to sources, Spotify is also trying to convince the labels to extend its ad-supported free tier for mobile devices, offering "more of a taste" than the current 30 day trial. Restricting mobile to paying or pro subscribers limits both the total number of Spotify customers and their overall usage. But it’s a risky bet. Without access to Mobile Music as an incentive, will users continue to convert from ad-supported to paid subscriptions? Or is it users’ inability to see the value of Spotify on mobile that makes them less likely to buy in?

    Spotify is still in a good negotiating position. Apple remains the leader in Online Music distribution but overall, sales of Music Downloads have slowed to a trickle. Downloads just aren't making up for The Decline in CD sales. We keep hearing that Apple is going to launch a subscription radio service similar to Pandora, but music industry sources say Apple and the labels are still far apart on licensing. As for Google and the others, their music offerings have yet to ignite much interest.

    The broad trends all favor subscription streaming on a wide range of devices, and Spotify is the only subscription service that has generated real scale. The Labels are big fans of the subscription model, which gives them predictable income across their entire catalog. The Major Labels have a vested interest in making sure subscription-based music continues to grow and thrive.

    Also in Spotify’s favor: in some markets, the company is close to converting 20 percent of its users of the free service to a paid plan, sources said. If Spotify can parlay its current pole position into more favorable rates, it may be able to retain its lead even as giants like Amazon and Apple come nipping at its heels.

    While it’s unclear exactly how far the two sides are willing to bend, It’s inconceivable that The Labels or Spotify would walk away without a deal.

    "Everybody in The Industry wants to see Spotify succeed," one industry insider told The Verge. "Nobody in the industry can afford to see them go down the tubes."

    Tim Carmody and Ben Popper contributed to this report.
    By Greg Sandoval
  • won't sing for Android anymore, Grooveshark app Dood's Music Streamer keeps…

    18 Dec 2012, 03:28 by Milkshake8 is dead

    The founders of left the company a long time ago. CBS, the current owners, try to Milk the worlds most popular Music Service to the last penny. As a result, Radio Streaming is now only available in less than 5% of the countries On The Planet. Germans, Americans, and British can listen for free on the website, or For Money in the desktop client. In Canada, AustraliA, New Zealand, Ireland, and Brazil you can listen with a paid subscription. The Rest Of The World is not allowed to listen to, not even if you pay.

    There were ways around these Ridiculous geographic restrictions, but no more. Alternative apps CoboltFM and KLastFM are really dead now., pulled the plug on free streaming for almost everyone, and most of the planet can't stream at all.

    Grooveshark rocks on

    Are you a refugee looking for alternatives? Then Grooveshark is for you. It's a global jukebox with More Music than anyone else, and with the right apps it's available worldwide. For Free.

    My favourite Grooveshark app is Dood's Music Streamer. You can search music, Play It, Download it, and it can turn your play queue into custom radio stations. It scrobbles everything you play to too.

    Dood's Music Streamer plays custom radio stations based on your play queue. It's not as good as the custom Radio stations, because grooveshark only looks at your current play queue whereas uses your entire scrobble history to build your personal radio station. But with being dead and buried, Grooveshark radio in Dood's Music Streamer is better than nothing.

    There are other Android Grooveshark apps, but they don't turn your PLAYLISTS into Radio Stations.

    Dood's Music Streamer
  • Will Turn Down The Volume On Global Radio Services In January, Take Others…

    15 Dec 2012, 20:40 by Milkshake8, an early mover in the streaming music business, is scaling back some of its operations, and putting others behind a paywall, in a bid to cut costs and make more money out of its existing business, the company has announced.

    Come January 15, the streaming radio company, bought by CBS for $280 million in 2007, is going to be putting its Desktop radio service in the UK, U.S. and Germany behind a subscription paywall, as it is already in Canada, AustraliA, New Zealand, Ireland and Brazil. The subscription service currently costs £3 per month in the UK and also lets users stream on’s mobile app. The mobile apps, meanwhile, today got a refresh: a new iOS app called “Scrobbler for iOS”, which brings to the iPhone’s scrobbling functionality — matching up your listening behavior with your itunes music collection to suggest music interesting to you.

    The ad-supported, web-based streaming service, it notes, will continue to Remain Free. At the same time, it will be closing operations in all other countries where it currently offers a Radio Service. The changes were first spotted by TNW.

    The moves are possibly signs of Bigger Issues at the company. Behind The Scenes, we have heard that has been in something of a management and organizational flux, as the once-bright upstart has been upstaged in the Streaming Music world by companies like spotify. Now it seems like CBS is just trying to Figure Out what to do with it.

    Overpaid for years ago and now no longer want to invest in it,” one source told us. “They need to stop moving it around and focus on making it big again.”

    From an internal memo that I’ve seen, CBS effectively dissolved its separately-run Interactive Music Group (which included Metrolyrics, and some ad sales people) back in August. David Goodman, who had been at the head of it, now has a different role within CBS.

    In August, CBS Interactive reorganized its business into four units to improve “Synergy” for better advertising and content sharing: CBS Brands (which contains CBS online properties like; Consumer Web Brands (including and now and other music properties); b2b (including techrepublic and ZDNet); and China. All report to Jim Lanzone, the president of CBSi, via general managers overseeing each division.

    And in a sign of the integration and the “moving around” that our source referred to, next week, we have heard,’s staff in London will be leaving their digs in shoreditch, where they have been for the last 10 Years, to move to CBSi’s offices in the area of Southwark.

    Although CBS also has an extensive radio operation, it doesn’t seem that has never really integrated with this division all that well. doesn’t talk in its announcement today; rather it says the main reason for the changes has to do with and Restrictions for the service, and looking to monetize better where it can. “We are always looking at ways to , when it can be done so economically,” the company writes in a statement on the site. “And open streaming to a wider audience In The Future.”

    Indeed, if the biggest music streaming service of all, Spotify, is still losing money on its streaming service (although the loss is narrowing, it seems) because of licensing fees coupled with Marketing and operational costs, then The Signs are Not Great for others in the field.

    It’s a Far Cry from the Hip streaming service that first emerged back in 2002. Its founders have moved on to catch other fish.

    It will be interesting to see what kind of an effect today’s changes have on’s business: it’s not clear how many users it had Around The World, even though it would have been paying licensing fees to service them.

    At the same time, notes that ad-supported, web browser-based listening is the most popular way to listen to the site in the U.S., UK and Germany. It’s likely that this move may just push more people in those markets to that web service rather than compel them to pay to use the desktop Client.

    To sweeten the deal for paid radio services using the desktop client, is planning to release a new version of its desktop client. Currently in beta, it “remains the best way to scrobble” and use other features, says notes that in other countries — it also offers services in Spain, France, Italy, Japan, Poland, Portugal, Russia, Sweden, Turkey and ChinaRadio Streaming will no longer be an option as of January 15, “even to subscribers,” because of licensing restrictions. “Scrobbling remains free and your listening data, Charts and recommendations will not be affected by this change,” it writes. Other services that will remain for paying subscribers include ad-free browsing on the site, access to demos, “and other features we’re working hard to add.”

    However, although this isn’t a Final Nail In The Coffin for, it’s hard to see how many people will want to stay customers for data alone. And sure enough, is offering these international users the chance to cancel their subscriptions altogether. “We understand if you wish to cancel your subscription,” the site says. “If you have paid for a subscription longer than 30 days up-front, you can request a refund.”
  • Dear RIAA: Pirates Buy More. Full Stop. Deal With It. from the just-wondering dept

    29 Nov 2012, 05:34 by Milkshake8

    Just a few days after Joe Karaganis posted his response to the RIAA's favorite researcher, Russ Crupnick of NPD Group, who suggested that Karaganis must be drunk and have little knowledge of statistics to publish a study showing that pirates tend to buy more -- and then revealing his own numbers that showed the exact same thing -- UK regulatory body Ofcom has come out with a study saying the same exact thing again (found via TorrentFreak).

    From this, I assume the only logical conclusion is that Ofcom officials are drunk and should have their statistics "licenses" taken away. That, or, it's pretty obvious that people who pirate aren't all just "evil pirates," but also include the industry's best customers, who are apparently being somewhat under-served by the industry. And that's actually supported by other data in the report. When asked what would make people stop infringing, people wanted cheaper legal services and services that had everything they want available to them legally, rather than piecemeal efforts that leave it impossible to get what you want much of the time. It also becomes clear that infringement is not on the margins, but a common activity. 66% of people noted that they had downloaded, streamed or shared infringing content -- with 56% doing so in the last three months -- with 16% admitting to illegal content streaming, downloading or sharing. And of course, the numbers are much bigger for younger people, meaning that those overall percentages are only likely to increase over time. Of course, the amount of sharing varied based on the content, but the idea of getting infringing content this way is clearly quite mainstream.

    The study also looked at what they spent on, and, not surprisingly, money spent seems to be shifting to scarce goods -- the things that can't be "pirated." In the music world, that includes merchandise and live, as well as online subscriptions, rather than "buying music."

    The report also suggests that, when you take into account price elasticity of both downloads and subscription services, the industry appears to be overpricing both significantly, and they could probably make a lot more money with significantly lower prices, making it up (and then some) based on volume:

    Note that, in both cases, if prices went much lower than they are today, even those who currently pirate everything would be much more likely to pay. They have similar tables for other types of content, showing the same basic thing as well. The elasticity on ebooks is really quite impressive, actually:

    All of this paints the same basic picture that plenty of us have been arguing for over a decade: treating "pirates" like criminals is a mistake. They're often either the best customers or the potential best customers if they were better served by The Industry, which often means offering things more conveniently and at a lower price. But the industry still resists this notion and wants to continue to demonize all infringement and any service that helps infringement. What a Wasted Effort.
    by Mike Masnick
  • File-Sharers Buy 30% More Music Than Non-P2P Peers

    16 Oct 2012, 01:52 by Milkshake8

    One of the most comprehensive studies into media sharing and consumption habits in the United States and Germany reveals that file-sharers buy 30% more music than their non-sharing counterparts. The result confirms that file-sharers are actually the music industry’s best customers. In addition, the research reveals that contrary to popular belief, offline “copying” is far more prevalent than online music piracy.

    The major music labels have a clear stance on online piracy, as the following quote from the RIAA illustrates.

    “While downloading one song may not feel that serious of a crime, the accumulative impact of millions of songs downloaded illegally – and without any compensation to all the people who helped to create that song and bring it to fans – is devastating.”

    This “devastation” translates into billions of dollars of lost revenue over the past decade, the RIAA claims. The more music people pirate, the less they buy is the underlying reasoning. Intuitively this might make sense, but looking at hard data a different pattern emerges.

    Today the American Assembly, a non-partisan public policy forum affiliated with Columbia University, published a teaser of its forthcoming Copy Culture Survey. The study is based on thousands of telephone interviews conducted in the United States and Germany and provides a unique insight into the sharing habits in the two countries.

    The preview zooms in on the digital music collections of people. Not just how much music people have on their computers, but also how they acquired these files.

    As one would predict, it shows that those who are self-confessed P2P file sharers have larger music collections compared to those who aren’t. However, the data also shows that these file-sharers buy more music legally than their non-sharing peers.

    30 percent more in the US.

    “US P2P users have larger collections than non-P2P users (roughly 37% more). And predictably, most of the difference comes from higher levels of ‘downloading for free’ and ‘copying from friends/family’,” American Assembly’s Joe Karaganis writes.

    “But some of it also comes from significantly higher legal purchases of digital music than their non-P2P using peers–around 30% higher among US P2P users. Our data is quite clear on this point and lines up with numerous other studies: The biggest music pirates are also the biggest spenders on recorded music.”

    P2P users vs. non-P2P

    The graph above shows that in Germany the results are even more pronounced. P2P users there buy nearly three times more digital music than their non-P2P using peers. However, the number of P2P file-sharers in the German sample is too low to be statistically reliable so these results should be interpreted with reservations.

    While the survey is unique in its scope, this result of does not stand in isolation.

    In the past we have documented studies that show how the majority of artists sell more music thanks to piracy, and that people who download more also buy more physical CDs. Yet another study found that pirates are 10 times more likely to buy music than those who don’t.

    A likely explanation for these results is that true music enthusiasts simply want to consume, sample and discover as much new music as they possibly can, and the most straightforward and convenient way to do this is through file-sharing networks. For this group file-sharing is mostly complementary.

    In any case, P2P file-sharers are not all cheapskates, quite the contrary.

    In addition, the research also point out that while P2P file-sharing is a common way for people to acquire files, offline substitutes for digital music sales are bigger. Ripping CDs and sharing files with friends account for a higher percentage of people’s music collection than P2P file-sharing across all age groups.

    This confirms earlier findings from a leaked RIAA report.

    More interesting findings on the digital music collections of people in the US and Germany are available on the American Assembly blog.
    By Ernesto