Fast Company

Survey Shows MP3 Pirates Also Buy the Most MP3s, So Why All the Fuss?

A survey conducted in Norway found that music consumers who regularly download illegally pirated music tracks are also the largest purchasers of legitimate digital music files, by a factor of 10 over non-pirates. So, you have to wonder, why there's all the legal bother?

In conducting the survey, the independent group, the BI Norwegian School of Management looked at the music purchasing habits of 1900 respondents, each over 15 years of age. Among the results,other than the fact that about as many people aged 15-20 bought a physical CD as paid to download music in the last six months, the most striking fact is the high rates of legitimate purchases made by pirates.

Though the survey doesn't inspect the reasons behind the result, the implication is slightly staggering: Pirates are actually the greatest consumers of legal MP3s. And in a world where physical CD sales have been spinning rapidly down the toilet for some time while downloads have been rising, this implies that the music-buying audience that will be most responsible for future income for the recording industry is actually the group that the industry has been vilifying.

Bjørn Rogstad of EMI responded to the survey predictably, denying that the data proves that pirating promotes legitimate sales--something that the data doesn't actually infer anyway. Instead he suggests that there's one inescapable fact, "the consumption of music increases, while revenue declines. It can not be explained in any way other than [...] illegal downloading."

But he's wrong--it can be explained in another way: It's a pure demonstration of how behind the times the business model of the record labels have fallen. The industry is simply failing to seize the opportunity to successfully monetize online and digital distribution, and in an unhappy economic climate too. Much of the power now rests in the hands of digital retailers like iTunes--America's number one music retailer--and Amazon MP3, as well as the tech-savvy users who know their way around the Internet. 

The vast majority of music will clearly be sold online in the near future so maybe the recording industry needs to look at how to make money by selling its wares, rather than suing for them.

[BI via Reddit]

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5 Comments

  • Kurt Lazaroff

    This article's essential statement fits basic consumer needs (wants?) modeling. But, the music industry is sounding like General Motors (over the last 20 years). The customers are "unpatriotic" (or uninformed/stupid) for not buying our products; it isn't because our products don't fit their needs, it's because of something else. Seeing how the industry has little to do with the actual creativity of the product, you'd think they'd have enough resources in marketing to investigate potential outlets rather than plastic disc technology and quit blaming customers for meeting their own (customer) demands for digital product. (and $18 for a plastic disc is outrageous and $1 for a digital download even more so, where are their costs in relation to the price of the product?) In buying some and "borrowing" others I'm just averaging out my own investment.

  • Kit Eaton

    @Ethan. Yup--changing markets are always the most challenging, particularly when the "old model" brought in so many millions of dollars. It's also interesting that individual bands are trying new digital distribution methods by themselves, independent of the labels: I'm thinking of Radiohead's "pay what you like to download" experiment.

  • Ethan Smith

    I admit it. I fall into the category of pirate/consumer. I spend more money on music now than I ever have before, despite having pirated a sizable portion of my library. Which is why the comment by Bjørn Rogstad of EMI seems disingenuous (at best). There are 11 CD's sitting on my desk. Exactly one of them is for a band on a major label. Rogstad's problem isn't simply that people are spending less on music, it's that they are spending less on EMI's music. It's no secret that the MTV-centric business model of the major labels have been bleeding the industry dry. Music fans today don't learn about new music through old media. Radio, television, corporate sponsorship, and for-sale "singles" just don't sell music like they used to. Instead, we use blogs, live performances, digitally enhanced "word of mouth," and, yes, pirating. If EMI finds this frustrating, they would be better served by adapting to the changing market instead of using litigation to try to stop the market from changing.

  • Ethan Smith

    I admit it. I fall into the category of pirate/consumer. I spend more money on music now than I ever have before, despite having pirated a sizable portion of my library. Which is why the comment by Bjørn Rogstad of EMI seems disingenuous (at best). There are 11 CD's sitting on my desk. Exactly one of them is for a band on a major label. Rogstad's problem isn't simply that people are spending less on music, it's that they are spending less on EMI's music. It's no secret that the MTV-centric business model of the major labels have been bleeding the industry dry. Music fans today don't learn about new music through old media. Radio, television, corporate sponsorship, and for-sale "singles" just don't sell music like they used to. Instead, we use blogs, live performances, digitally enhanced "word of mouth," and, yes, pirating. If EMI finds this frustrating, they would be better served by adapting to the changing market instead of using litigation to try to stop the market from changing.

  • Ethan Smith

    I admit it. I fall into the category of pirate/consumer. I spend more money on music now than I ever have before, despite having pirated a sizable portion of my library. Which is why the comment by Bjørn Rogstad of EMI seems disingenuous (at best). There are 11 CD's sitting on my desk. Exactly one of them is for a band on a major label. Rogstad's problem isn't simply that people are spending less on music, it's that they are spending less on EMI's music. It's no secret that the MTV-centric business model of the major labels have been bleeding the industry dry. Music fans today don't learn about new music through old media. Radio, television, corporate sponsorship, and for-sale "singles" just don't sell music like they used to. Instead, we use blogs, live performances, digitally enhanced "word of mouth," and, yes, pirating. If EMI finds this frustrating, they would be better served by adapting to the changing market instead of using litigation to try to stop the market from changing.