No Evidence Of NBN Threat To Music Sales

The major Fairfax Media mastheads this morning published a ridiculous article – (I know, right?) – asserting that the National Broadband Network (NBN) would provide a greater threat to the music industry with respect to pirate downloads.

“But the report also contained a grim warning for Australia: if our current levels of music piracy are not controlled now, the problem will get much worse by the time the National Broadband Network reaches 90 per cent of our population by 2015.”

Yet there is actually no evidence to support this assertion.

The biggest concern about this article is that it selectively quotes a report from the International Federation of the Phonographic Industry to support the assertion from Dan Rosen, CEO of ARIA, that all content industries in Australia will suffer, due to the arrival of the NBN, and an apparent associated increase in pirate downloading this will stimulate.

No mention is made of the evidence in the report to the contrary, which was highlighted by other online coverage of the report.

For example, the following quote from iTWeb:

“The Digital Music Report 2013, by the International Federation of the Phonographic Industry (IFPI), says global recorded music revenues are up 0.3%, boosted by downloads, subscription and other channels (such as free streaming services like Spotify and Myspace Player). According to the IFPI, digital revenues are also up 9%.”

“The report says download sales increased in volume by 12% globally in 2012 and represent around 70% of overall digital music revenues.”

“”The global recorded music industry is on a path to recovery, fuelled by licensed digital music services and rapid expansion into new markets internationally.””

So digital revenues in the music industry are up, because of legitimate, price suitable alternatives being provided by the…………music industry?

Is this the same music industry crying foul over how illegal downloading is killing their music industry?

Continuing on, is illegal music file sharing on the increase or decrease:

“Illegal music file-sharing “declined significantly,” down by 17 percent in 2012 compared to 2011, according to The NPD Group.”

“With more services available, such as Spotify, and Pandora for streaming and buying music, and giant digital music retailers like Amazon and Apple, consumers have more choices than ever for getting music legally, easily and relatively cheaply.”

There are those convenient, price-conscious online services provided by the music industry again, rescuing the music industry from these nasty downloaders again.

What about Apple, and their current grand-daddy of online music download services, iTunes:

“The online store, which sold its 25 billionth download last month, has long been the stop [sic] music download platform. It’s [sic] revenue from music downloads continues to grow at about 10% annually. Overall iTunes revenue is estimated to be growing at 50% annually. Last year the recording industry posted its first annual revenue growth since 1999.”

While 30% of revenues from iTunes downloads stay in Apple’s pocket, it doesn’t sound like legal music downloading via iTunes is hurting the music industry too much, with the 70% cut they get.

And you know, those illegal downloaders are helping the music industry anyway:

“Also, the survey suggests users of peer-to-peer file-sharing software buy 30 percent more music than those who do not use peer-to-peer software.”

I have long argued that the reason people download content illegally is due to the broken pricing and distribution models the content industries employ:

“Here’s a better idea – drop your prices to reasonable levels, and people won’t even steal your content. As soon as the price of legally purchasing your content is effectively less than what it costs people to download it – (for free or otherwise) – people won’t want to download it for free.”

We’ve already seen that the model that services like Spotify and Pandora are actually already employing is making serious inroads into the problem of illegal downloading of content.

So what is Dan Rosen so worried about?

The solution is right before his eyes – and it is the very thing he seeks to attack.

The NBN.

People want the content, but not at the ridiculous prices the music industry wants to charge – and people want the content online.

The NBN should be an opportunity for the music industry to get things right for the future, to get decent well-priced streaming and download services running in Australia.

It shouldn’t be an opportunity to piss and moan about a problem he wants somebody else to fix for him.

The NBN is the solution, not the problem.

This is just another example of a music industry that doesn’t understand their own customers and the world in which it exists, and an Australian mainstream media outlet who seeks to bash the NBN at every possible juncture.

There is simply no evidence to support their assertions.