Odyssey study: filesharing is here to stay

[TankGirl]

Newsbytes has just reported an interesting and representative Odyssey study reflecting the present (post-Napster) state of filesharing in U.S. The general message is clear: filesharing has become a mainstream activity involving tens of millions of people in U.S. alone and it shows no signs of slowing down. The figures are impressive. 31 percent of Internet users 16 years or older (=over 40 million U.S. 'consumers') have downloaded or transferred music online in the past six months. Among those under 30 years the percentage is 53 (!) and even in the age group of over 45 years 14 % of internet users are involved in filesharing. The average filesharing activity was 11 downloads or file transfers per week.

Newsbytes:

The study concluded the availability of digital music "appears to be playing a major role" in the drop in sales of recorded music.

Odyssey said the recording industry should offer services that allow consumers to create their own "play lists" of songs, and transfer ("burn") the music to their preferred format. The firm said 60 percent of U.S. households have some interest in subscribing to such a service.

"The industry has taken so long to respond that an entirely new set of expectations has been created," Nick Donatiello, president and CEO of Odyssey said in a written statement. "Now record labels will have to climb walls that they are allowing to be built."

The study said the music services offered by the record companies, such as MusicNet and Pressplay, do not meet the needs of consumers. Odyssey dismissed those services as something that solves the industry's problems, but does not meet consumers' needs.

What people want, the firm said, is to own, control and customize their music.

- tg

[JackSpratts]

"We're seeing a sea change, and from the consumer perspective it looks as if the industry is still out shopping for boats," Baenen added.

or wondering if they even like water...

another excellent tg link! thanks.

- js.

[ranger121]

The UK government passed a 3rd reading of a bill to impose heavier penalties on people who counterfieit goods. Although the legislation is mainly aimed at mass marketeers of dodgy Guccis, the theft of intellectual property by copyright infringement and the duplication of copyright material is being targetted by the same Act.

What the MPs actually think:

"Counterfeiting is enormously profitable, and organised criminals are heavily involved in the production, the buying and importing and the distribution of all types of counterfeited products . . . The profits from IP theft can help organised crime groups to become more established and to fund other various criminal activities."

"Over two thirds of the organised crime groups reported to be involved in intellectual property theft were seen also to be involved in drug trafficking. Drug and intellectual property theft are very different areas of crime, except that both involve smuggling and selling, and the levels of risk attached are also very different. The links are not fully understood, but there are large profits to be made from counterfeit goods, and this may be the simple explanation."

Full transcript of the debate (if you can stay awake, as most MPs do not) is here

[JohnDoe345]

Odyssey said the recording industry should offer services that allow consumers to create their own "play lists" of songs, and transfer ("burn") the music to their preferred format. The firm said 60 percent of U.S. households have some interest in subscribing to such a service.

The recording industry isn't keeping up with technology and the demands of the consumer. Sure there are always going to be people who will pirate their products for a profit and there will always be users who aren't willing to pay for anything....but if Odyssey's 60 percent number is correct then it sounds that the recording industry can profit of this file sharing craze. Although, I do believe that it would be better if the bands themselves get involved with this so that they can retain most of the profits themselves, but I think you get my point.

The recording industry waste so much time and money trying to completely ban this whole file sharing craze when it's almost impossible to do so. You know there is always going to be some computer whiz that will be able to hack the lastest protection. Also, the file sharing programs themselves are getting better each time.

Now if there was a subscription based version that was priced correctly and allowed full ownership...meaning they allow the user to possess and copy what they have downloaded....then I think that we might be on to something. The problem is that the recording industry took way to long to introduce a pay service to the general public. Most p2p users are use to the idea of getting files for free now. I'm curious as to how things might've turned out if there was a good subscription based version introduced during the early days of Napster......

What I don't understand is the recording industry's refusal to allow full use(copying) of their files on a subscription based service when users are basically doing the same thing when they buy CDs rip them and then share them. They would at least be making some profit if they had a file distribution program that is equal to or better then the popular current p2p programs. Basically, file sharing is going to keep happening anyway and the sooner the recording industry realizes that the sooner they can create a "legitimate" industry from the p2p community.

Of course, there is always going to be the free p2p programs like the ones we have now, but on the same token there will also be users who are willing to pay for a good service. The actual percentage is debatable, but if Odyssey's numbers are correct then it seems that there are many users who are willing to pay for it. I'm sure many users are sick of spyware, poor customer support service, and not having the peace of mind about not wasting time downloading viruses or fake files.

But the point I'm trying to get at is that the recording industry's blatant refusal to create a good alternative to the current p2p programs is not only fool hearted but can also increase the use of these programs because "legitimate" companies aren't filling the void for the user's demand in these areas. Not all users use p2p programs only to get free files (it's definitely a perk ). Some users see it as a convenience to be able to download what they want. And for some users files like certain tv series aren't broadcast in their areas but they can be found on p2p programs. It's a lot more effecient then getting a satellite dish with 1,000s of channels when there was really only one channel you wanted or tv series.

So instead of whining about how p2p programs are ruining their industry, why don't they see the potential and keep up with what the users want. Don't get me wrong. I like downloading free stuff like everyone else, but not everyone is dead set against not paying as long as their is a good alternative. So far there isn't one so how can they be so sure that it won't work. They can either stop their whining or provide us with a good alternative because p2p programs are here to stay.....

Sorry everyone, I had to get that off my chest

[TankGirl]

A good post, John, and reflecting my thoughts as well. The content industry's words and deeds both indicate that they continue be on total denial of the p2p phenomenon. Their view on new technology and the social developments around it seems to be so distorted and fearful that they end up wasting most of their resources on the futile attempts to destroy p2p, and failing to do so, whatever adaptive measures they take fall inevitably into the category of 'way too little way too late'.

As you point out, many p2p users are perfectly willing to spend money on music and actually keep doing so despite their ongoing p2p activities. There is certainly a price level that would make both CDs and commercial online music services not only attractive but probably highly popular among file sharers, turning the 'threatening' new media into a zone of possibilities also for the record companies. But the industry refuses to see this. They still rather sell one CD for 20 dollars a piece than 10 CDs for 2 dollars a piece. They still insist on highly expensive and star-oriented promotion tactics that yield a five percent success rate with only 30 profitable new artists every year. This model is totally incompatible with the way p2p communities work. They should be busily experimenting with new p2p technologies and free peer promotion mechanisms that would yield higher success rates with much lower budgets and break-even points. But instead they isolate themselves from p2p communities and try to criminalize and harass them in a nazi fashion. They have already run out of sympathy and should there not be some drastic policy changes they will eventually also run out of money.

- tg

[JohnDoe345]

by TankGirl
Their view on new technology and the social developments around it seems to be so distorted and fearful that they end up wasting most of their resources on the futile attempts to destroy p2p, and failing to do so, whatever adaptive measures they take fall inevitably into the category of 'way too little way too late'.

It's this fear and distorted views of the p2p community this is really hurting their industry. In a sense they are "shooting themselves in the foot", but the worst part is that they aren't realizing it.

Correct me if I'm wrong, but in places like China many products are banned so there is a huge piracy problem. It has gotten so bad that piracy has become the normal way of getting certain products because there isn't an alternative. I believe this is what we are seeing with file sharing when it comes to downloading content. The alternatives that are available just don't cut it. Most users can't live with the fact that they can't copy or do as they please with something they have basically bought. Users are use to "owning" music as oppose to "renting" them.

As with the China example, p2p users really don't have a good alternative even if they do want to pay for these files.

They still insist on highly expensive and star-oriented promotion tactics that yield a five percent success rate with only 30 profitable new artists every year.....They should be busily experimenting with new p2p technologies and free peer promotion mechanisms that would yield higher success rates with much lower budgets and break-even points.

Very good points TG. The power of "word of mouth" has become a lot more effective and powerful with the invention of the internet. It's also a lot cheaper then the conventional ways of promotions. The internet is starting to become the new media of choice and is becoming more common in everyday lives of the general public, but only a very small portion of this relatively new media is used in a business fashion. Of course, there are consumer's concerns with security and privacy issues but these problems are present even in the brick and mortar businesses.

It's just that the brick and mortar businesses have had a very long time to deal with all their problems and opposed to internet businesses. There are possible solutions around these problems like not storing their customer's account information on a system that is accessable to the internet. Also, a lot of users have concerns with giving out their credit card information so why hasn't more internet businesses allow check or money orders? But I think it comes down to the same old problem of businesses not adequately address the concerns or problems of the customers.

The file sharing territory does have a potential business side to it, but the industry is more concern about addressing their own needs rather then the consumer's. Programs like MusicNet and Pressplay are required to put the recording industry's needs first and the consumer's needs a far second. Any 4th grader can tell you that a business it doomed to fail if the consumer isn't priority 1. And their arguement barely has any merit to it. They are afraid that by allowing users to do anything with their downloads it will increase the piracy problem, but it is so easy to buy or even borrow a CD and rip it. The piracy problem is already an issue and there really isn't a 100 percent effective way of copy protecting something anyways.

The recording industry can keep running into a brick wall all the want, but the industry is changing and if they don't learn how to adapt to the change then they will be left behind.

[JohnDoe345]

Originally posted by TankGirl
A good post, John, and reflecting my thoughts as well.

Thanks TG. Usually the compliments are the other way around

Talk about an honor hearing it from TG herself....

[ssj4_android]

IMO, I wouldn't pay for P2P. I might pay, however, to get perfect quality music off a high speed server.

[dead_frog]

Getting things digitally is much less satisfying for me than being able to hold a CD, Jewel box and booklet in my hand... so stop screwing around with your Smiling Pretty Bands and Empty Wastes Of Film and give me an incentive to buy more CDs or see more movies!

So far all I've gotten is:
"Whoops, were those your speakers? It's against the pirates, you see"
"Yes we know you've been a loyal CD buyer, but we have to raise the prices more, because were losing. Because of the pirates, you see."
"No, you can't play that here. It's against the pirates, you see."
"Yes, we've added two new songs. Buy the CD again, dammit. Or you'll be a pirate, you see."

"Yes, but this is Part Two. It's better than part one, seriously..."
"Yes, but this is Part Three, it's better than the others and its brand new!"
"Yes it's been filmed before, but this one is with new actors!"
"Celebrating the 4th anniversary, we're bringing it back into theatres with two added scenes!"
etc

[ranger121]

I was stood outside a local football ground the other day, meeting someone. inside the ground there was a "computer fair" going on (for you americans - sort of a garage sale where traders sell computers, parts and supplies at very cheap prices off the backs of lorries - no frills - just cheap as possible).

Whilst I waited (about 20mins) I counted at least 40 people that came out of the hall with large bags full of blank cds, labels and jewel boxes etc. We are talking average about 4 or 5 spindles each of 100 blanks per person.

Why would these people be buying such large quantities of blanks?

Simple. In my workplace there are around 3000 employees, and I personally know of at least 8 people who will burn you any album you can think of, get it to you with colour printed sleeve notes and a jewel case for less than a third of the price of the shop-bought item. The lists of albums available are openly circulated within the internal email system. The albums are not mp3 rips, but good quality copies.

I counted 40 people in 20 minutes. Alright, not all of them would be running a little bootleg business, but a significant number will be.

This is the problem that the music industry has to tackle.

Personally, I'm not going to pay £15 for a new cd when I can buy exactly the same thing from the chap in the next room at work for £5.

But what I will be willing to pay for is a fast server based quality music download site on a pay-per-dl system, with every title that I want on there, guaranteed complete quality recording or your money back. I don't care if I have to burn it myself.. at 16p a blank disk it's no problem.

Present p2p is ok, the speed is not always great, you can't always get what you want, stuff is incomplete and the quality is not guaranteed in any way, but hey, what do you expect for free?

[JohnDoe345]

Originally posted by ssj4_android
IMO, I wouldn't pay for P2P. I might pay, however, to get perfect quality music off a high speed server.

I agree and also wouldn't pay for any current p2p program. Any paid service of current p2p programs is going to fail because they are not providing the content and bandwidth themselves. They are relying on the users to do all that for them so the users will ask why should they pay. The program itself is not the reason most users would start paying. The payment would be for the content and it has to a large selection of high quality content that can be copied to CD by the user, but the recording industry is putting a strangle hold on this issue.

A paid service would most likely have to be ftp servers and possibly combined with the help of p2p technology. But the point I was trying to make is that the recording industry is putting blame on the p2p community when they refuse to see the potentional of the file sharing concept. Reports from sources like Odyssey states that there seems to a rather large number of users willing to subscribe to a paid service. It wouldn't have to work exactly as our current p2p programs, but there is a new industry out there that they are completely ignoring, so they only have themselves to blame.

I'm not really for or against paid services. I'm just tired of the recording industry's fool harded ideals and then blaming it on the users. P2p technology can be used to benefit the user and the recording industry but rather then provide us with a good alternative they decide that they should just ban it.

[dead_frog]

Originally posted by JohnDoe345
The payment would be for the content and it has to a large selection of high quality content that can be copied to CD by the user, but the recording industry is putting a strangle hold on this issue.

Has anyone ever bought a CD-single? (when it wasn't in a bargain bin?) Why not stick with CDs, but create a file downloading service where devoted fans could grab singles or rarities (or CD tracks, if need be ). I mean it's the real music buffs that are creating this chaos for the industry (whereas those swapping radio fodder ... well... ) so why not stop trying to squeeze money out of those loyal and give them more value and convenience?
This may just lead to the songs being even more swappable, as the industry would be doing the ripping for you - probably a new format would be needed.. anyway, just a thought.

[Mazer]

For a couple of years now I've had an idea rolling around in my head concerning p2p payment models. It goes like this: if you download a song you owe a fee (myabe 5 cents), and if you upload a song you get paid the same amount, and the fees and payments are balanced in an online brokerage account (like trading stocks, but not). I originally thought it would be a good way to stop leaching (back in the Napster days) but it seems kinda dumb to me now. There'd be those who would leave their broadband connections on all day and night and get paid for doing nothing, and I've always believed that the originators of music shoud be paid rather than the distributors, including p2p sharers. Still, I'd like to see how many people would subscribe to such a service, it would be a way to test fee based p2p's.

But the issue isn't really as clean cut as fee vs. free. PressPlay and Music Net are scams that attract suckers, they get people to pay for something they're not getting. I imagine the only subscribers to those "services" are people who feel guilty for doing things that the music industry says are illegal. Given the choice between three pay services, one that advertizes high quality rips, another that advertizes direct payment to artists, and the third that advertizes that it's legal, which would you chose? I can confidently predict that the first two would get a lot more traffic than the third, even if they were deemed illegal.

In the case that pay services become high quality, server centered, fast and friendly and unrestricted, I think that there would be a reversal of roles in the p2p world and only the suckers would use the free p2p's. Like ranger points out, you can't expect a lot for free. Like it or not good information costs good money, but in this mad world there are those that charge for bad information and those that give good information for free. The trick is gathering people who will share good information for free in one place, like here on NU. The net is just like the real world, the only people you can really trust are your personal friends.

[JohnDoe345]

Has anyone ever bought a CD-single? (when it wasn't in a bargain bin?) Why not stick with CDs, but create a file downloading service where devoted fans could grab singles or rarities

Dead_frog you have definitely pointed out one of the benefits of downloaded mp3's. You can make your own album with any songs you want. IMO most bands aren't worth getting the full album and sometimes they have rare singles that aren't available at your local stores.

In the case that pay services become high quality, server centered, fast and friendly and unrestricted, I think that there would be a reversal of roles in the p2p world and only the suckers would use the free p2p's.

I agree paid services have the potential to become even better then current p2p programs. And if priced right with good features, a large selection of high quality content, and fast servers then I think that it might be the prefered choice. It would be like comparing free internet ISP's as opposed to a paid one. Back in my 56k days I used both paid and free services like Juno, Netzero, etc. I dropped the free services quick. Anyhow it's a moot discussion because the recording industry has a tight resistance to p2p programs.

There are always going to be people who will try to get things for free, but since there aren't any good paid alternatives they are just forcing users who are willing to pay to used only the free ones. Pressplay and MusicNet aren't even close to a good alternative.

by Mazer
PressPlay and Music Net are scams that attract suckers, they get people to pay for something they're not getting.

I agree. Users are basically "renting" mp3's and that's just not acceptable. I want to own my music so that I can burn them for the car, my stereo, etc. The recording industry is running out of excuse when it comes to p2p. There seems to be enough users willing to pay, so it comes down to their fault that they aren't creating a service that will make the users and themselves happy. If they continue this philosophy then I have no guilt in continuing to use free p2p programs. There is no way I'm going to pay $20 for a CD when I only want 1 or 2 songs. Not every band comes out with a single and CD prices are way too high anyhow.