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Full Version: The Death Of OiNK!
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So, as you may well be aware, music file-sharing site OiNK has been shut down after a "two year investigation... co-ordinated by Interpol".
The arrest is so serious because they believe that members had to pay to use the site (false- donations we asked for to keep the servers running and were not mandatory. Is Wikipedia going to be next, for asking people to donate?). Jeremy Banks, the head of the IFPI's Internet Anti-Piracy Unit is quoted to have said "This was not a case of friends sharing music for pleasure. This was a worldwide network that got hold of music they did not own the rights to and posted it online."

Which would be why people had profiles and you can add friends to yours? Also why it was stipulated that everyone must have a cute fuzzy avatar?

Getting my personal politics aside, what do you think of file-sharing? Films as well as music, e-books, computer programs, etc etc. Recorded music sales have gone down by a third in the past six years, and record companies are worried that people will stop buying music all together. The thing is, though, live concert and festival ticket sales have been on the up. This year, Truck Festival (a teeny festival in Oxfordshire run by an independant record label) had all its tickets sell out within 24 hours- one of its main attractions being Jack Penate: a singer/song writer who wouldn't be as popular as he is now if he didn't have his music being listened to for free on Myspace. Programmes such as Top Of The Pops are now irelevant as you can just go online to hear and find new music, or what is "in" at the moment. At one time, especially in the 70s, if you wanted to find out about music, you would be glued to the TV to see who was on what live show. Now, you can just go online, fiddle through Myspace et VoilŠ! You found the next Lily Allen.

Studies have shown that people will value something less, in the long run, if they got it for free than if they paid for it- which is true, if you think about it. I'm sure you'd appreciate a record with wonderful artwork and extras- The Arcade Fire's Neon Bible, for example. The "box-set" came with the CD, two or three flick-books and some other bits and bobs, in a cardboard box about the size of a CD case, than the same album in digital format. It was, on average, £3-4 move expensive than the normal version, and obviously you could get the download from a torrent site for free (although if I remember rightly, the bit-rate for Neon Bible was pretty awful).
I for one would always prefer to own the CD or record than just have a download, and make an effort to go out and buy the record/ CD of an album that we think is amazing (and this is the important part) even if we have already downloaded it.
In fact, what better way to make sure you definitely want to buy an album than listening to it first? I'm sure everyone has had the experience of hearing a single from a new album of some band and thinking it is awesome! You go out, buy the CD for about £13, take it home, listen to it... and then you realise that it is rubbish. It was just a fluke of the first single, and the rest is utter tosh. True, you may want to own that single- but you could have spent £3 instead of £13 on it.

Perhaps, also, there was a spike in the usual figures for music sales around about 2001? It would go someway to explaining why music sales are coming down again.

I know this post is biased, and I know I've probably simplified it in places, but seeing false accusations and media reports of an issue they have no clue about really gets to me. Also, musicians and artists make very little on record sales. They get their revenue from touring- the record sales go into the label's pockets.

So! What are your ideas on the subject? What do you think is right and wrong about torrenting and file sharing? And what do you think about DRM?
In the 56k days of napster, I can say without any doubt that downloading music encouraged me to buy more. A lot more. The sort of music I was into didn't get any airtime on the radio, so downloading was the way to find new music.

Then later, I would find torrents for albums but just download the individual tracks I was after, and buy the album if I liked it.

Over the past few months with Oink, I've downloaded a lot more. Coupled with lack of money, using oink encouraged me to get a lot of stuff that I would have otherwise bought. When I buy stuff on amazon these days, it's generally on a ratio of about one new album to one buying-something-I've-already-got.

I'm going to miss oink; it was fantastic for demos, EPs and other things that were otherwise impossible to get hold of but I'm glad it's forcing me to start buying again because it's true; I do value the things I own more than the things I just downloaded. I love my CD collection.

That's music downloading covered: on to film and TV!

DVDs are something else I'd like to buy more of. I'll download a film and if I like it, I'd want to own the DVD. When I have money I'll be spending it on films as well as music.

But TV is not something I want to buy. I've got most seasons of Stargate SG1 on DVD, and I'd quite like to buy the complete The West Wing, but generally I am not fussed about owning TV series. And downloading means I can watch American shows and talk about them with people I know from Americaland, and with any TV I can get it and choose to watch it when it's suitable for me. And I realise that most TV networks make their money through advertising and sponsorship, and I am effectively skipping all of that. But mostly adverts are really really annoying, you know, so I don't feel bad for skipping all that.

Computer games cost too much money. Maybe. It seems that way to me, but I have no idea how much of that is actually profit for the companies. Really really awesome games that I'm going to spend a long time playing I will happily pay for, but my attention span is so short that it's not worth me paying for- ooh! kittins!

But seriously, Blizzard and Bethesda: you can both count on my monies for StarCraft II and Fallout 3. And if Guild Wars 2 is also subscription free, I'll definitely be getting that too.

Oh, and Digital Rights Management is not something I'm going to talk about here because it would mostly involve writing swears in really big letters.
As a consumer, I like getting things for free, but I also know that I wouldn't buy any of the stuff that I get for free, I would just not own it. I download a lot of music, and I don't buy CDs. I do, however, buy records, because of the superior quality and the lower cost (I buy second-hand). Does my downloading lower the profits of the music industry? I cannot see how it does. I would either not pay for it, and not have it, or not pay for it, and have it.

I do purchase DVDs, even ones of movies that I download. Until such a day comes that my computer monitor and speakers can rival my entertainment system (60" TV, surround sound), I will continue to purchase DVDs.

I rarely buy games, though, because of the high cost. When I do buy a game, I dont' spend more than $20 on it, so most of the games I own are rather old. I believe that the newest game I own is Diablo II.
However, the game I've spent the most money on is Kingdom of Loathing, a game that is offered for free online, with donations accepted that grant you an in-game item (that is tradable in-game, so you can have it without donating). I've also donated to Spybot, because if something is given for free, and asks for donations, I'm more likely to give something.
Everyone here is making the assumption that everyone here follows the same philosophy that they only download what they would never buy. The sheer number of people now that never need buy a CD ever again thanks to the internet is huge. A primary factor behind that is that a good proportion of people that buy CDs are very young and getting money from parents and low pay after school jobs. Those people (and a great many more) buy a fraction of the number of CDs compared to the past. MP3 players make it additionally advantageous to just not bother buying CDs which you have to convert to a digital format anyway, and a lot of youngsters don't have credit cards and debit cards with which to buy them legally off services like iTunes. The music industry as a whole will survive in my opinion, but it's definately cutting back to do so. I have met a good number of people that work in music and sound engineering that have all said that since piracy people pay less for their services.

Speaking as someone that plans to go into an industry where people will likely be able to pirate things I am involved with, I can't say I will take much solace from the fact that the industry will survive when I personally stand to lose out.

I do still download myself, but I feel it seems like people like to believe in the logic that they're not hurting anyone except faceless business by illegally downloading to make themselves feel a little better about what has essentially become a common practice. I prefer to feel a little guilt about what I do, and be honest really.
Okay, a bit of research. I didn't do too much, just a few papers done on it, and one article online.

The implied per capita demand loss is found to be 0.10 unit, 42% less than the IFPI number. (offline CD piracy)

Stan Liebowitz (2003) tries to assess the effect of online piracy on the music industry. He looks at a 30-year time series of sales in the U.S. record industry using numbers by the RIAA (Recording Industry Association of America) until 2002. He argues that the current downturn in CD sales can be associated with the appearance of file-sharing technologies, although he admits that sales of other media much less substitutable to MP3 such as cassettes and singles also dropped during that period. He also dismisses the role of income and prices on CD purchases. He concludes, without using direct information on music downloads or internet usage, that "MP3 downloads are causing significant harm to the record industry".

However, using an estimated elasticity of CD sales with respect to MP3 downloads, we find that internet piracy only account for less than 25% of the CD decline in 2002 in the US. The effect of internet piracy on CD sales in 2002 is estimated to -2 % (= -8 ◊ 0.25) of internet piracy on CD sales. However, CD sales declined by 8.9% in the US in 2002, while economic growth picked up to 2.45%. Thus internet piracy alone can only explain 22.5% of the CD decline in 2002 and is most likely not to be a significant factor in 2003 as the percentage of internet users who download music is reported to have declined further after the series of legal actions undertaken by the RIAA in the summer of 2003.

From the first quarter of 1999 to the first quarter of 2000, national sales grew 6.6%, sales near all universities dropped 2.6%, sales near most wired schools dropped 6.2% and sales near schools where Napster was banned after the first quarter of 2000 fell 8.1%.
However, sales near universities were falling since 1998, at a time when Napster was not available and in which national sales were growing, casting doubts on the conclusion of Soundscanís report (Fine, 2000).

Across the overall sample (15,228 observations), 39.3% bought music during the month prior to the interview, 9.0% regularly download MP3 files and 51.0% have internet access. The percentage of people who bought music is much larger among the group who download MP3 files (55.7%) than among those who do not (37.7%).

Considering only those people who have an internet connection at home (5980 observations), 47.1% bought music during the month prior to the interview and 21.0% regularly download MP3s. Again, the fraction of people who bought music is higher among those who regularly download music (55.0%) than those who do not regularly
download music (45.0%).

(The paper goes on to show that downloading does decrease the propensity to purchase CDs by somewhere between 35% and 65%)

Across the overall population, 9% regularly downloaded music online in 2001. Therefore, if both digital music users and nonusers had the same propensity to buy music, the effect on the music industry would be a reduction in music sales units of between 3.1% and 5.8%. But digital music users have a higher propensity to buy music, indicating that a correction for the heterogeneity in the groups is needed.

"Using detailed records of transfers of digital music files, we find that file sharing has had no statistically significant effect on purchases of the average album in our sample," the study reports. "Even our most negative point estimate implies that a one-standard-deviation increase in file sharing reduces an album's weekly sales by a mere 368 copies, an effect that is too small to be statistically distinguishable from zero."

So, it appears that downloading music does decrease the propensity to purchase CDs, and the people who are most likely download music are those who are most likely to purchase music, so they still purchase more than the average person.

On the subject of DRM...if I buy music, I own it. A company doesn't get to tell me how to use their product once I purchase it.
I've just thought of something:
MP3 format albums cost less to download from i-Tunes than in CD format. As one of the studies pgrmdave quoted says, downloading music is affecting the industry- not just illegal downloading. Therefore surely music companies have themselves to blame (a wee bit) by making downloads available?
^ I dunno why, but my mom is insanely strict about how I get my music. She won't let me have an iTunes account (Oh I wish I had a credit card...) and won't let me download for LimeWire. So I either use my friend's CDs or buy a bunch of CDs that only have one or two songs on them that I like...
Really? I'm torrenting right now and my mum says "I'm not getting you out of prison".

But I agree with torrenting. Bands don't make money from record sales, it just spreads awareness about them. So torrenting is good for the bands. Bad for the record company though.
They just need to learn that they can go down different routes with merch etc. Rihanna's Umbrella song got her label making umbrellas, and what is currently freebies that street teamers like myself hand out at gigs and events, could be merch that the public could buy. Goldie Lookin' Chain's Safe As F*** condoms (the Zutons also had some "Why Won't You Give Me Your Love" condoms), The Mystery Jet's balsawood aeroplanes, Jason Mraz's erasers, My Chemical Romance's chocolates, Pull Tiger Tail's tiger masks, Do Me Bad Thing's Yes! rock, stickers, badges, cardboard 3D glasses, CDs, fanzines- record companies spend millions each year on PR. These days when you go to a gig, you expect free stuff! If they spent a little less on PR then voilŠ! They would be saving money.

Anyway, it isn't as though there have ben job cuts or anything yet. *coughBBCcoughJustPayJohnathonRossLessMoneyPerYearCough*
The fact is, it costs the industry money. However, I don't know if that's necessarily a bad thing. It allows artists to be more independent, but it also removes the incentive for labels to take on more independent artists. As much as we don't tend to like the large record companies, they do help the artist get shows, make albums, and serve as PR and Marketing for that artist. With the record companies seeing less money per artist, they are less likely to take on smaller bands that might not be huge stars. This means that we are less likely to see small bands jump to the mainstream, and we'll see a more homogenous mainstream music industry.

EDIT: And whether or not the real losses due to downloading are high, the perceived losses are high, which will cause the companies to act in potentially irrational ways. Just like the stock market, perceived value is worth more than real value (in the short term).
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