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UPDATE Illegal UK ISP Music File Sharers Spend More and NOT Less

Posted: 02nd Nov, 2009 By: MarkJ
p2p piracyThe latest survey of over 1,000 British people (aged between 16 and 50) by Demos, a UK think tank, has revealed that those who use their broadband ISP to download illegal music tracks actually spent an average of £77 a year on legal music content; £33 more than legal downloader’s.

The survey also found that 42% of those who admitted to having downloaded music illegally did so as a means of trying the content before they brought it. It also revealed that interest in legal sales could double if the price per track were reduced to 45p (prices of 69, 79p and 99p are still common on some sites, especially for new releases).

No doubt the music industry would merely claim that such figures are actually an example of how they are losing money, with their main - once lawful - consumers turning to illegal means instead. But sales of individual single track downloads continue to rise, thus opponents of anti-file-sharing measures could say that illegal downloading encourages sales.

Interestingly just 9% of respondents actually admitted to having downloaded music illegally, highlighting that the scale of unlawful downloading could have been exaggerated by the industry; surely not. The government can at least take solace in the fact that its plans to cut-off illegal downloader’s from their ISP would dissuade 61% from illegal downloading.

UPDATE 5th November:

The International Federation of the Phonographic Industry (IFPI) has, as expected, criticised the Demos report for suggesting that illegal file-sharing stimulates rather than reduces legitimate music sales.

IFPI Comments:
http://www.ifpi.org/content/section_news/20091104.html

"These findings do not prove that illegal file-sharing boosts music sales. They only reflect that there is an overlap between those people who download music illegally and those who purchase music. This is not an original finding and it is consistent with the typical profile of many music fans who today acquire music from different sources, some legitimate and some not.

Ipsos themselves acknowledge that the research results do not suggest illegal downloading encourages sales: "Ipsos MORI stress that we cannot infer from this that illegal downloading actually encourages legal sales - the illegal downloaders are likely to be more interested in music generally (and without piracy may have spent more than £77 each). However, it does show that piracy and legal purchasing are by no means mutually exclusive."

Even allowing for this overlap, the comparison between the buying habits of file-sharers, on one hand, and all other internet users on the other is skewed. The latter group are obviously buyers of less music overall as they include people who do not consume music at all. A fairer comparison would be between the buying habits of illegal downloaders and those who only acquire music legitimately."

The IFPI continues on to say most studies conclude that the impact of file-sharing on music sales has been significant: "This is why spending on recorded music has fallen every year since illegal file-sharing began to become widespread," they claim.

"This is reflected in the decline of the average spend per buyer in the UK and in the overall decline in music sales in the recent years. Average spending on music in the UK fell from £75 in 2004 to £61 in 2008 (albums, TNS Worldpanel Entertainment). In the same period, music sales fell from £1.25 billion to £1.01 billion," added IFPI.

Ironically the British Phonographic Industry (BPI) recently reported a record breaking year for UK singles with more than 117m sold to date (32.2m in 2004). Perhaps it is not piracy having an impact but rather consumers realising that, thanks to legal digital downloads, they now no longer have to buy an entire album of music (only half of the songs on an album are usually worth listening to) and just get the good individual tracks instead.
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