“A little bit, a little bit, a little bit won’t hurt.”
Industry analysts, executives, critics, and academics have been debating the impact of digital piracy for a decade. During that period, the U.S. music industry fell from nearly $15 billion annually to $8.5 billion. While a quickly growing digital market helped offset the decline in physical sales, and great strides were made constraining the growth in illegal P2P traffic, still roughly 4 out of 5 digital music downloads in the U.S. are via P2P and other unauthorized services. Some pundits have ascribed the problems solely to the industry, but you would think by now there should be no doubt that the online theft of music has caused significant harm.
How wonderful that such intricate questions can be so artfully distilled in a classic children’s storybook! For any of you that have not read it, “Nobody Stole the Pie” (by Sonia Levitin) tells the story of the town of Little Digby and its giant annual lollyberry pie. When one year the celebrated pie is gone, all the townsfolk who had picked away at it bit by bit claim it was “Not I” who stole the pie.
According to SoundScan, the top 10 albums in 2009 sold a total of 21 million copies, and the top 10 tracks totaled 36 million paid downloads. But the top 10 albums in 1999 totaled 55 million in sales. Even with digital track sales factored in, those top sellers fell by more than 50%. In the last 10 years, the major record labels’ direct employment in the United States fell from about 25,000 people in 1999 to less than 10,000 today — a drastic reduction of over 60% in people who enable the creation and development of new music.
In the music industry, it takes the investment of many peoples’ money, effort, and time to create the songs and albums we all get to choose from and enjoy. Since most acts never even reach the breakeven point in sales, music labels need to operate like venture capitalists and count on the successes to subsidize the continued development of many artists and releases that may never break out of the red. And it’s easy to ignore the harm being done when you’re only stealing one copy.
Music companies continue to develop more ways for fans to enjoy their favorite artists and songs legitimately – and provide additional sources of revenue. But when more music is obtained illegally, and less money is available to invest in finding, developing, and recording new artists, the resources available for the next round are diminished. So if the investments dry up, and fewer new artists are able to be developed, will filesharers who stole bit by bit look at each other and say it was “Not I” who stole the pie?
Joshua P. Friedlander
VP Research
Recording Industry Association of America
Originally posted at: http://www.riaa.com/blog.php?content_selector=Nobody_Stole_Pie
