Illegal Downloaders Are Best Customers, Too
By Staff News & Analysis - October 16, 2012

Survey Says: Illegal Downloaders Also Purchase More Legal Music Than Those That Don't Pirate … The argument has long been that music piracy leads to a massive loss of revenue when accumulated across the millions of songs downloaded illegally. That's what groups like the RIAA have pushed for years. According to the American Assembly's upcoming Copy Culture Survey, however, that's just not the case. As it turns out, those that pirate in the United States also purchase around 30% more music than those that don't. – Geekosystems

Dominant Social Theme: If they steal, there's no appeal. Lock 'em up.

Free-Market Analysis: We've written about copyright and its criminalization numerous times and this article on Geekosystems and the one it is based on at The American Assembly are no surprise: Illegal downloaders are apt to be large record purchasers.

This simply makes sense. Those who are obsessed with film spend money on movies. Those who like to read spend money on books. The issue of downloading as copyright crime is a completely separate one.

Or at least it should be. Over and over, though, we hear how much money illegal downloaders are costing the record and movie industry. In fact, illegal downloaders are those individuals most likely to SUPPORT these industries.

Kim Dotcom of Megauploads – himself in copyright trouble – is currently creating something called Megabox that will disenfranchise the record companies that have been so aggressively punitive with their customers.

Dotcom's idea is to empower the musicians themselves by providing them a facility that they can use to market their own tunes and keep most of the profits. Some say this was the real reason Dotcom was targeted.

If musicians were in charge of their own sales, the chances of copyright infringement prosecutions would likely go down a good deal. That's because musicians would be reluctant to take adversarial stances to the audiences that consume their product. Here's some more from the larger article in The American Assembly:

Where do Music Collections Come From? … In our last installment, we noted that there's a sharp generational divide (in the US and Germany) in attitudes toward copying and file sharing, with those under 30 showing more acceptance of these practices in general and much more acceptance of sharing within loosely-defined communities of 'friends.' Not rocket science, right? But how does that translate into actual behavior? Here are average music file collections, divided by age group:

… 18-29 year olds and 30-49 year olds show very similar patterns of purchasing digital music and ripping their own CDs. Age makes virtually no difference in the scale of either practice. The difference in average collection size comes, instead, from higher levels of 'copying from family and friends' and 'downloading for free.' This is part of what we mean when we say that copy culture is youth culture.

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.'

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.

This is the key sentence: "The biggest music pirates are also the biggest spenders on recorded music."

Do you think, dear reader, that record company and movie executives are unaware that their largest audiences are those that pilfer music as well? Of course not.

Do you think these top execs are unaware that their aggressive tactics are alienating their top customers? Sure they are.

So why continue such counterproductive techniques? The raid and subsequent imprisonment of Kim Dotcom can be said to have backfired in some regards, turning the Megaupload owner into a kind of digital martyr and providing him with sympathy he would not otherwise have.

There must be another reason and as we have suggested in the past, there probably is. Both the music and movie industry are power elite constructions and it seems to us their stances are deliberately provocative.

The idea, in other words, is not to discourage illegal downloading for its own sake but to create such an atmosphere of paranoia that legitimate Internet discourse is discouraged and even abandoned.

We can trace these tactics back to the invention of the Gutenberg Press and the subsequent battle of the elites of the day to create copyright as a weapon to slow down the free flow of information.

Today, the battle has been joined once again and even more determinedly. The results will not be good for either the music or money businesses but those who actually own these industries don't really care.

The group in aggregate that exercises ownership is what we call the power elite, and they've been challenged as never before by the Internet and the information that has been dispersed.

The solution is to use copyright once again as a weapon. Websites are going dark, ISP providers are pressured to perform "watchdog" functions and gradually the Internet is made over into a series of discreet archipelagos, each one by law unable to share even rudimentary information with the rest.

It has been suggested that when information is cheap or free, society benefits and living standards rise. In fact, historically, this may be the case. Britain enforced copyright harshly and as a result information was expensive. Germany was copyright tolerant and as a result, information was easily dispersed, leading to a kind of golden age several hundred years ago.

The British, already entangled in Money Power, looked on enviously as Germany produced artists, philosophers and musicians. This, it has been claimed by some non-mainstream historians, was a primary reason for both World Wars. The power elite was determined to crush a potential rival.

There are many aspects to copyright and many reasons to believe the issues are far more complex than ones regarding "stealing." We're not going to argue the merits of copyright anyway. Our position has remained consistent. If you wish to enforce it, go ahead. Just don't ask government to do it for you.

But if you are a sensible artist, you will probably forego copyright prosecutions in favor of dispersing your work as widely as possible. A popular artist is a profitable one. Touring is one way to capitalize on popularity.

Sure, touring is inconvenient and live performances are a lot of work. But no one ever said an artist's life would be easy – or not any easier than another.

After Thoughts

Anyway, change is coming to the entertainment industry. The power elite is going to lose yet another battle. It is not a good season for them. But they will make lives miserable as they retreat. See "Dotcom May Reap Bitter Fruits From Being a Pioneer."

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