TRONA, CA: Nearly eighteen years have passed since Napster opened the doors to widespread file-sharing across the internet. Prior to Napster, file-sharing was a process too cumbersome to bother with in an era of dial-up modems and slow bitrates. In 1998, it would take anywhere from 30 minutes to several hours to download a single song. A movie would seldom take under 24 hours to download and often took days (provided you could maintain a stable enough internet connection on your dial-up). By 2000, the Gnutella network was born, which powered such innovations as Limewire, which cut the download time of a song to a few minutes and a film to several hours; this was a slow rate by today’s standards to be sure, but manageable. Next came Bittorrent, which remains the preferred client mode of filesharing to this day. With Bittorrent, it became possible to download movies and entire music discographies in minutes. The rapid growth in file-sharing has been blamed on everything from the collapse of the music and film industries. How much of the hysteria is real, based on measurable evidence, and how much of it is just hype by vested interests? DNN takes a closer look at the issue.
Who is the typical file sharer?
According to Columbia University’s American Assembly’s “Copy Culture” study on piracy and American society, 45 percent of U.S. citizens actively pirate media. That rates jump to nearly 70 percent when looking at younger demographics, particularly those under 30. This is, on the surface, and astonishing number. However, the study also noted that frequent file sharers buy as many legal DVDs, CDs, and subscription media services as their non-file-sharing, Internet-using counterparts. In the US, they buy roughly 30% more digital music, and spend 75% more. They also display marginally higher willingness to pay. So the image of file sharers simply as reckless, greedy lawbreakers does not necessarily match the data.
What motivates file sharers?
File sharers can be categorized into four categories:
- Bootleg collectors: These downloaders primarily download live concert recordings or outtakes, or homemade video content. The chief rationale behind this behavior is that as fans, they already have purchased all the commercial content available from an artist. These recordings are usually unlikely to ever be commercially released, so there is no real loss to the artist or company’s bottom line. The Grateful Dead were pioneers in encouraging this kind of file sharing back in the early days of cassette tapes, and many musical artists have taken a tolerant position on the issue, seeing it as maintaining fan interest and a source of promotion.
- Out of Print collectors: These downloaders will download material that is long out of print. This may be in the form of mp3’s of an out of print album, or a film that is not available on DVD. For many of these collectors, such downloads are placeholders until they can obtain an original copy of the out-of-print material or until the material gets an official re-release. These collectors will often then pay for the release. In some cases, file sharing interest in long dormant titles has prompted media companies to re-release the material, resulting in surprise windfalls for the company that might not have otherwise existed.
- Samplers: These downloaders prefer to download material to see what they like best before purchasing it. In the case of music, it has been found that such downloaders actually spend 75% more money per capita on compact discs and digital downloads per year than those who never file share. While one can argue that downloading three albums and purchasing one means two albums have not been paid for, an equally compelling argument is that the downloader would not have purchased them anyway, but would purchase something. Most spend higher amounts of money on DVD’s as well, although the reported numbers conflict.
- Hogs: These downloaders are the real thieves of the bunch; they download anything and everything as long as it is free. They also comprise the smallest cohort among file-sharers; fewer than 5% of illegal file sharers have bought no copyrighted material at all. Those 5% do represent a lot of CD’s and DVD’s that might otherwise be sold for profit. However, there are also indications that the exposure the artist receives from such file-sharing creates a new audience for his or her work.
Who does it hurt?
Despite all the grousing by the media companies, US and Canadian box office receipts have never been healthier, setting new records almost every single year. While piracy is undoubtedly taking a bite out of the profits at one end, there is also an uncertain number of films which gain added promotion from file sharing. The American and Canadian film industries have also undergone many changes to their basic business model, as both become more and more reliant on capturing an international market. The switch from celluloid projection to digital theaters has also removed cost from the bottom line.
On the other hand the music industry has definitely felt the pinch in recent years, although it is unclear how much of it is directly attributable to illicit file sharing. A more subtle shift is also at play; a change from physical media to digital media as the consumer’s preferred choice of music delivery. Digital sales have increased, while the decline in overall music sales seems to have bottomed out. While this has saved the companies money in pressing and distribution costs, the typical $1 per song download does not leave a lot of margin for companies that still operate on a largely 20th century scale.
As for individual artists, whether or not file sharing hurts has largely depended on the viewpoint of the particular artist. Lady Gaga, Neil Young, and Shakira have all publicly defended the practice, citing reasons as diverse as increased concert revenue, increased promotion, and increased fan attention as reasons. While these artists are successful and wealthy, other musicians of more modest means have cited piracy as a means of increasing exposure and fanbase.
The real root of the music industry’s problem, and to a lesser extent, the film industry’s problem has been their slowness in acknowledging that a cultural shift has occurred along with the changing technology of the internet. Those who have suffered greatest are not necessarily the artists, but the workers in the music and film industries who have lost jobs due to changing times. However, it is not file-sharing on its own that has cost them their jobs; it is the overall change toward digital on-demand entertainment. People want access to any media, wherever they are.
File-sharing will not disappear as long as there is easy access to the internet. What needs to occur is for these companies to adapt to a more user-friendly method of giving the people what they want. Doing so will not only reduce the amount of piracy, it might lure back faithful consumers of media who simply have no time for CD and DVD shops anymore.