File Sharing Report

[multi]

Machiavelli would have been proud. The Recording Industry of America has raped and pillaged its heart out to put the fear of God into many unsavvy Internet users and the message, 'We know where you live' to would-be file sharers. File sharing has now become taboo to many; 87 year-old women who mortgaged their houses to pay settlements aren't likely to bother us again, and thanks to the RIAA, many 11 year old girls will now grow up knowing that if you share music, somebody's going to come and hurt mommy and daddy.

In spite of scheduled beatings for the elderly, the RIAA has failed to put a stop to the majority of Internet users who continue sharing files. As sharing continues to grow, music sales ironically appear to follow in an upward parallel. How can this be? Hasn't the RIAA been preaching a different sermon? The RIAA insists that music labels have been severely crippled by file-sharing networks. In light of industry earnings reports (which have shown a dramatic increase in sales), there is no other explanation: this must be reverse-psychology to trick us smarter fellows. The conflicting stories between killing and blessing the music industry with file sharing have sparked interest among many file-sharers who don't buy the three-legged puppy image of the music industry.

On July 31 2004, I decided to conduct an experiment to determine the motivation behind file sharers and establish proof for a long-believed philosophy many have about file-sharing: that it actually benefits the industry. Not just the music industry, but the movie industry and television industry as well as others. It has been a long held belief by some that the reason users are file sharing to begin with are because they are disenchanted with today's business model for entertainment, and are finding an alternative solution. In order to evaluate this philosophy, the file-sharing experiment was designed to allowed people to submit the names and cost of items they wouldn't have normally purchased if they hadn't first downloaded it over a file-sharing network. Each purchase required an explanation upon submission and, although establishing financial numbers was not the goal of the project, there was surprisingly over a quarter of a million dollars of merchandise reported within the first 24 hours of the project's appearance on Slashdot. Each submission has been analyzed by hand and bogus or questionable entries falling into the test window were discarded. The goal of this report is not to attempt to justify file sharing, but explain it. With a bit of creativity, the industry can overcome filesharing by giving consumer what they need. This report also is not intended to report on some level of statistics. Clearly, only individuals who purchased items reported into the experiment, therefore this report is only useful for explaining the reasons why individuals initially downloaded something that eventually led to a purchase. What this report does offer is a starting point for industry executives to build a new business model on top of, in an attempt to win the consumer back.

Further analysis of the data showed many things which will be shared in this report. The data as a whole screams one common observation: there is a captive audience and a viable market in reaching the file-sharing community to generate revenue (without litigation). Because of the vast selection of media available to file-sharers, many are finding themselves exploring new music, movies, and even software they would not have normally considered in their purchases. There is demand, and demand creates market.

The key to finding the market is adapting to a new business model - one that serves the enlightened consumer. Digital media provides a means of gratification that is usually only somewhat temporal, like sex or good barbecue. This presents a window of days or possibly months at the latest. The industry has an opportunity to take advantage of this desire for entertainment and use it to turn users into consumers. The rest of this report discusses the how, straight from the voice of the consumer.

If the industry is indeed losing money to piracy, the root of the problem does not appear to be piracy itself but rather the industry's failure to listen to its consumers. There are many users who can and are making purchases thanks to file-sharing. The "epidemic", as the industry would call it, is far too widespread to be an issue of ethical decay among consumers but rather one of obligation and civil disobedience. The industry has, thus far, failed to adapt to the business model consumers demand and when that happened, consumers took it upon themselves to find an alternative solution. The experiment has shown, if anything, that there are many users today who are ethical enough to purchase media even after they're in possession of it - if they believe it is worthy of their money. File-sharing has spawned not from selfishness, but from the demand of a simple proverb: treat others as you would want to be treated. We'll see in this report the many things holding back consumers from traditional purchases, and what drives today's consumer into making purchases.

http://www.nuclearelephant.com/papers/sharing.html

When consumers are fed up with an industry, they will be led to protest in any way they can. If the industries discussed in this report are to ever have content consumers again, they must adapt to the business model of the consumer. There are countless consumers in the Internet community willing to invest in long-term relationships with various artists or manufacturers. All they require is that it is on their terms.

The consistent abuse of the consumer shows the consumer only one thing: if you won't give us your money
, we'll take it.

[multi]

September 16, 2004 Staff,

LONDON - Legal music downloading through the internet is complementing rather than eroding CD sales, according to a new report.

# Contrary to opinion that the increasing popularity of music downloading will eventually make CD album and single sales obsolete, people still want to own hard-copy music and 92% of people said that CDs are their preferred music format. The latest findings from Entertainment Media Research found that people buy legal downloads when the music they want is not available in-store, or to help them decide whether to buy a CD or not. More than 60% of the 1,400 respondents said that they were likely to use legal music downloading to get hold of tracks because it was not in music stores, and over 50% said that they used legal downloads to get a few tracks from recent albums. Getting hold of music quickly was another strong impetus for the use of music downloading, according to the survey. "The CD continues to exert a very powerful emotional hold over legal downloaders," the study said. "When asked about buying CDs in the future, 80% of the sample claim that they will buy as many or more." Earlier this week, The Darkness revealed that they would be selling chart-eligible copies their albums and singles to be downloaded directly from their website. The Consumers' Association has made an official complaint to the Office of Fair Trading over possible anti-competitive practice of the music download site iTunes. The association says that in the UK, iTunes charges consumers 79p, which is about €1.20, for a track, while in France and Germany the cost is just 99 cent, leaving UK consumers to pay a price differential of around 20% more for an identical service. Phil Evans, principal policy adviser at the Consumers' Association, said: "There appears to be considerable evidence that the iTunes set-up is prejudiced against the UK public and distorts the very basis of the single market. If the OFT agrees it will be another example of the rip-off culture that the British public are often victims of." from