IFPI: Ten inconvenient truths about the music industry today

The term Inconvenient Truth has been popularized by Vice President of the USA Al Gore in his climate campaign. Now the IFPI, International Federation of Phonographic Industry, has made the lamest campaign gimmick ever, by using the same slogan in their anti-piracy efforts. They have today announced a list of 10 ‘inconvenient truths’ on their website. Some of their points are valid, but others just plain propaganda.

1. 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.

2. 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.

3. Organised criminal gangs and even terrorist groups use the sale of counterfeit CDs to raise revenue and launder money.

4. Illegal file-sharers don’t care whether the copyright infringing work they distribute is from a major or independent label.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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.

10. P2P networks are not hotbeds for discovering new music. It is popular music that is illegally file-shared most frequently.

Let’s comment these ‘truths’ briefly. First two of them are just about right. The Pirate Bay has been able to operate since it has been found legal according Swedish law. Neither of these websites are anti-copyright. I think they are more anti-record label. But certainly the website administrator benefit financially from their success.

Claim number 3 I can’t comment, but overall selling pirated hard copies for profit is quite unethical. Number 4 must be true, as I don’t think anyone bothers to check the record label before downloading. Number 5 is just bullshit. Campaigns like Idols are a result of efficient cross platform promotion, and record labels make huge marketing efforts to make sure that everyone knows who are the Idols. If there was no piracy, there were no Idols? Gimme a break.

Number 7 is in contradiction with claim number 6. Obviously ISPs benefit greatly from the demand of music and movie downloads, which of course generates new jobs in the ISP sector. Also the sales of MP3 players, portable movie players, music and video enabled cell phones is booming, lucrative and creates plenty of tax revenues and work.

Number 8 is true. I don’t think Swedes have Pirate Bay because they are poor. Number 9 is partially true. Law does (in some countries) prohibit file sharing and other forms of piracy. But the laws are impossible to control. In many countries downloading is not illegal, while file sharing of copyrighted material is. Number 10, well how can they tell? Naturally Metallica is more downloaded than some garage band, but it is also sold much more than a garage band.

Overall it amazes me how the music industry has not been able to adapt to this new market situation. And it isn’t even new, as things started happening already in the late 90’s when MP3 was popularized. The supply and demand do not match in the music industry. The price is too high in comparison to the product. Piracy channels fill this gap - there obviously is a huge demand for music as so many people bother to download it, but the commercial channel is just too damn expensive to make it appealing to some people. I have always wondered why one can buy mega movies like Titanic or The Matrix on a DVD for 5 euros, but some Madonna album from the 80’s is ‘mid priced’ at 12,95€! The recording industry should offer a comptetitive alternative to piracy. Online distribution of lossless compressed music with a reasonable price tag.