Digital piracy could end up hurting you, too

Music piracy is a controversial and divisive issue, with both copyright holders and supporters of free media vocal for their cause. I recently read an insightful article by on the issue by Paul McGuiness, manager of U2, in August’s issue of GQ. McGuiness argues for copyright protection through legislation that forces internet service providers (ISPs) to issue warnings to persistent file-sharers, and ultimately to then throttle or cut off their internet access. Known as the “Graduated Approach,” this has been adopted in the UK as part of the Digital Economy Act.

A big part of the debate on music piracy is whether or not it actually harms anyone. After all, the reasoning goes, once a piece of music has been recorded all the costs to the creator of that music have already been incurred. Having one more person listen to the music doesn’t cost the originator so why not just let it happen?

Paul McGuiness responds that treating music as a free good causes longer-term damage to the music industry. Without paying listeners, the industry lacks sustainability

“Indigenous music industries from Spain to Brazil are collapsing. An independent study endorsed by trade unions says Europe’s creative industries could lose more than a million jobs in the next five years... this isn’t just about fewer limos for rich rock stars.”

Unfortunately confusion around the issue results from the fact that both lines of reasoning are at least part way correct. Imagine a Venn diagram, where one circle represents people who want an album enough they are willing to pay for it, and the other circle represents people who download the album without paying. The artist is losing out on revenue where the two circles overlap, representing people who would be willing to pay for the album but download it for free anyway*. If someone who would not be willing to pay for the album downloads it, then the artist is not losing out on a potential sale (although they could still raise a moral objection). One of the greatest difficulties from the perspective of music industry is that it is impossible to tell whether someone who downloads something illegally would have been willing to pay for the content.

As previously noted on this blog, the web allows for a wide variety of amateur producers of content to share their material. However the expectation of free content has also been detrimental to some of those on the lower rungs of the professional ladder, and so far a satisfactory solution has not been found.

*The relative size of boxes and degree of overlap in the Venn diagram varies according to the price of the content – a realisation that has lead to the proliferation of cheap downloads and subscriber services for music and TV