Music business

Music industry says piracy still threatens its future

As far as the recording industry is concerned, the existential (and literal) threat of piracy has not been negated by the rise of streaming. Lawsuits continue and studies claim that the problem staunchly refuses to go away despite the very idea of ​​owning MP3s which seems anachronistic to most music fans.

Over the past decade, the focus of litigation has shifted from dedicated pirate sites to the creators of software that allows users to “stream rip” tracks from existing servicesincluding YouTube – which offers a mix of videos uploaded by content owners alongside UGC which may contain music but which rights holders can claim and monetize.

The scale of litigation against stream-ripping can be enormous. The RIAA, representing American record companies, recently won a case against YouTube-rippers and (both were previously required to block access to people in the United States). This lawsuit could see the trade body awarded $83 million in damages.

This legal action coincided with the publication of a white paper published by Musoa digital piracy monitoring and measurement company. He claims having analyzed 182 billion visits to hacking websites last year to gather the information for its report, adding that this was a 15.2% increase from 2020 in terms of data that he was dealing.

He said the United States was the biggest hacking market, accounting for 10.6% of all global traffic here (an average of 68 visits to a hacked site per user). The music industry can take some relief from the fact that TV piracy dominates, accounting for 50.3% of all global traffic; film accounted for 11.2% while music was only 8.1%.

“The music industry’s decision not to encourage exclusive content on streaming platforms has had a positive impact on music piracy over the past 5 years,” Muso suggested.

The exclusives were briefly popular in the early days of Tidal and Apple Music where artists would give them exclusive release windows before allowing their music to go on competing services. Such deals were made, in part, in an attempt to close the gap to Spotify’s market-leading position.

Muso, however, pointed to stream mining as a growing driver of music piracy. “These sites accounted for 39.2% of music piracy in 2021, compared to 33.9% in 2020,” he noted.

For the first decade and a half of the 21st century, recording industry coverage has been filled with rolling stories about the threat and impact of digital piracy, as well as the swing in litigation against the two The P2P services themselves and the serial downloaders which allowed a large number of tracks to be accessible for free.

Since arrival of Napster at the end of 1999, the downloading of unlicensed MP3s has grown at a phenomenal rate. There were arguments that it was killing the recording industry, but also counter-arguments that users of sites such as Napster and the many who came in its wake viewed this download as a “Try before you buy” opportunity.

The arrival of iTunes Music Store in 2003 was the first success in getting people to pay for large-scale downloads. However, the steady rise of streaming has seen music consumption move from an ownership-based model (of CDs, MP3s, LPs) to one built entirely around access (via free streaming services , but operating on advertising revenue, or on the basis of monthly subscriptions).

Streaming now accounts for the bulk of record-breaking activity around the world and has helped industry revenues rise again after many years of decline. (How this streaming revenue is paid out to songwriters and recording artists is however a whole other debate.)

Diffusion accounted for 62.1% of the global record trade in 2020 according to the IFPI. Of the $26.1 billion generated that year for the recording industry, $13.4 billion came from streaming, $4.2 billion came from physical sales (such as vinyl, CDs and cassettes ) and downloads accounted for just $1.2 billion, or just 4.6% of the total market.

The persistent problem for the recording industry is that, even with huge shifts in consumption and ownership being massively eclipsed by access, piracy persists among a particular subset of people online. Part of that is ideological, where they feel like they’re dealing a political blow to business. Another part of it is habitual – they use pirate sites because they have been using them for many years and have no interest in kicking the habit.

In 2006, John Kennedy (then Director of IFPI) said of online music piracy: “It will never completely go away.” At the time, this was seen by some in the recording industry as a dangerous admission of defeat by the head of the trade body that was supposed to protect their interests globally.

A decade and a half later, this line takes on a different resonance. Piracy will continue to exist, but for the recording industry, its revenues are steadily increasing rather than decreasing; so it’s something he can, even if it can be politically upsetting to accept, live with.

As such, hacking in 2022 looks more like paper cuts than the flesh wounds of the early 2000s.