What The IFPI Report Left Out: Its Own Study Showed That File Sharers Do Buy

from the well,-look-at-that dept

Fri, Jan 22nd 2010 1:37pm — Mike Masnick

We already spent a bunch of time debunking many of the claims in the IFPI's new "Piracy Bad!!!!" report. But the folks over at TorrentFreak have dug up a bit more info. Apparently the research for the report was put together by Forrester, and the underlying research showed that when it comes to the growth in digital music sales, those who partake of unauthorized file sharing are also the best customers of authorized digital music. No, this is not saying that file sharing automatically leads people to buy, or that all file sharers buy. Obviously, that's not the case. But it does suggest that demonizing those people might not be the smartest thing.

But the IFPI report doesn't mention any of that. Instead, it claims that people file share for one reason and one reason alone: because it's free. If that were the case, though, then why would any of those who partake also buy? And why would they be the industry's best customers for digital sales? It seems like the IFPI should be embracing them to see how it can get them to choose to buy more -- but instead, it totally ignores what its own researchers found, insists that it's just because content is free, and then spends most of the report demonizing its best customers and asking governments of the world to kick those people offline.

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Filed Under: buyers, digital music, file sharing, ifpi, study
Companies: ifpi

44 Comments

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Anonymous Coward, 22 Jan 2010 @ 1:59pm

GRAMMER POLICE
"It's own study"?
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CheMonro (profile), 22 Jan 2010 @ 2:04pm

>"those who partake of unauthorized file sharing are also the best customers of authorized digital music."

But doesn't everybody fileshare? I bet if you did a study on the youth demographic of music customers I bet you'd find that like 99% percent of them were active file sharers. I acknowledge that not pissing off your customers if a valid business strategy, but what exactly does it mean to ways that filesharers are the best customers, if in fact they are probably -all- their customers, at least in certain markets.

And if all your customers also fileshare, does that make it right?
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DK2, 22 Jan 2010 @ 2:13pm

I love the piracy statistics, they always assume that every pirated media item would have been a sale. What a ridiculous assumption.
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Michael Ho (profile), 22 Jan 2010 @ 2:21pm

Re: GRAMMER POLICE
got it. fixed. thank you, grammar police! :)
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:Lobo Santo (profile), 22 Jan 2010 @ 2:27pm

Re: Piracy Stats
Yeah... most pirates I know download something and then say "glad I didn't pay for THAT garbage."
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wallow-T, 22 Jan 2010 @ 2:29pm

Danger, Will Robinson
I'm not sure how one should interpret this Tweet from Mark Mulligan, who is quoted as the source for the TorrentFreak article:

http://twitter.com/Mark_Mulligan/status/8074993556

"RT @flypapertv Pirates are most valuable customers. http://vf.cx/jlB $$ Only problem with my quotes: I didn't even speak to the journalist!!"

(I've followed Mark Mulligan's twitter feed for a while. It's him.)
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Anonymous Coward, 22 Jan 2010 @ 2:30pm

Re: Re: Piracy Stats
http://en.wikipedia.org/wiki/Sturgeon's_law

"Ninety percent of everything is crud." - Theodore Sturgeon
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bob, 22 Jan 2010 @ 2:34pm

Re: Re: Re: Piracy Stats
I always liked Teddy
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Anonymous Coward, 22 Jan 2010 @ 2:38pm

monlyeys in aroom syndrome
the idea that if you put one million monkeys in a room somehting good comes
think about us pirates as the monkeys we then show you whats good
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Anonymous Coward, 22 Jan 2010 @ 2:39pm

some time ago i was looking for a track from a game i had played many years before. while i could find the soundtrack the previews left alot to be desired so i turned to unauforized file sharring to find the track that i so badly wanted. after wading through the crap i wasnt interested in and eventually finding what i wanted i bought the bands album and have enjoyed it since.
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Anonymous Coward, 22 Jan 2010 @ 2:44pm

Re: monlyeys in aroom syndrome
Pirates are modern-day pamphleteers, the only difference being that they hand out all the pamphlets.
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A Dan (profile), 22 Jan 2010 @ 2:49pm

Re:
No, but it means that if they're all kicked offline, there'll be nobody left who'll buy your product.
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Anonymous Coward, 22 Jan 2010 @ 3:07pm

Re: Danger, Will Robinson
Hmm, maybe some form of CYA.
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TW Burger (profile), 22 Jan 2010 @ 3:10pm

It Makes Sense to Download Before You Buy
Software is sold by allowing free downloads of a limited time or reduced feature version of the product. It makes sense that downloaders get an unauthorized version first and then, when it's decided that the music is worth it, buy a legal copy that will generally (hopefully) be of far better quality.

I have never understood why anyone believes the rubbish published by the International Federation of the Phonographic Industry (IFPI) or the RIAA or MPAA that calculates losses solely on the basis of the presumption that an unauthorized download is a lost sale. As someone stated earlier: 99% of everything on the Web is crap. Most downloads are of material that would not have been purchased.

All of the music I listen to I own the original CD of, but I knew what I was buying first.
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Brian (profile), 22 Jan 2010 @ 3:17pm

I think the whole problem comes in with the fact that the recording and movie studios feel that people should buy things just because they exist, they shouldn't have to be given any reason to buy.
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IshmaelDS (profile), 22 Jan 2010 @ 3:19pm

Re: Re: Danger, Will Robinson
Who knows, I did put up a comment asking them about it though.
http://torrentfreak.com/pirates-are-the-music-industrys-most-valuable-customers-100122/#comment-63 5429
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Anonymous Coward, 22 Jan 2010 @ 3:26pm

Re: GRAMMER POLICE
"GRAMMER POLICE"?
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Michael Ho (profile), 22 Jan 2010 @ 3:41pm

Re: Re: GRAMMER POLICE
The Grammar Police is a separate department from the Spelling Authorities. They have all the same evidence, but sometimes they don't connect the dots....
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Anonymous Coward, 22 Jan 2010 @ 3:43pm

Now I cant say this applies to me with music, but with movies I'd say its true. I download a cheap divx avi rip of some movie with crap ass stereo sound and wonderful artifacts at larger resolutions. Now if I actually liked the movie, I'll go out and but it, watch it on my big screen with my DTS system and enjoy it. If I didn't like it, well I'm sure glad all I wasted was time.
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Anonymous Coward, 22 Jan 2010 @ 3:44pm

Re: Re: Re: GRAMMER POLICE
I thought it was the Speliing Authorities?
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:), 22 Jan 2010 @ 3:59pm

Push Harder.
The more the IFPI and their sisters around the world push the more alternatives come up for me is funny for them must be terrifying.

And it is great that we have blogs all over the place bringing in the real news.

Who needs anyway "that kind of artist"?

Go to places where your rights are respected and give you in writing through liberal licenses what you want and not just promises.
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interval, 22 Jan 2010 @ 4:04pm

Re: Re:
What you pack of thieves aren't understanding is that were it not for file sharing, users would simply sign their paychecks over to the labels and studios. They would spend MUCH MORE of their hard-earned cash to those entities. Who, in the end, utterly deserve all wealth. For as you know, selling a smash hit single is much more important than anything else human beings can possibly endeavor to do. Stopping you pirates is a no-brainer. Sheesh.
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Capt Obvious, 22 Jan 2010 @ 5:17pm

Re:
"But doesn't everybody fileshare? "

Answer: No.

Assuming the word "file" means soft copy, then one could say that not everyone shares files because there are some who do not use a computer. Those who use a computer which is connected to the internet share files. That is the way the internet works.
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William Shakespeare, 22 Jan 2010 @ 5:20pm

Re: monlyeys in aroom syndrome
Wow, you got that one all messed up.

http://en.wikipedia.org/wiki/Infinite_monkey_theorem
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Anonymous Coward, 22 Jan 2010 @ 6:44pm

Re: Re: Re:
/sarcasm
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Anonymous Coward, 22 Jan 2010 @ 6:47pm

Re: Re: Re: Re: Piracy Stats
"I always liked Teddy"

yeah so do I, my girl friend has alot of them
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Anonymous Coward, 22 Jan 2010 @ 6:54pm

Re: It Makes Sense to Download Before You Buy
"Software is sold by allowing free downloads of a limited time or reduced feature version of the product."

The problem right now is that RIAA, the MPAA, and etc. Are alienating the people doing the downloading, The people who will buy in the end.

I think it might be a guilt thing ... "we have conned these people so long, and ripped off so many artists we cant trust anyone to do the right thing" maybe a bit of paranoia mixed in .... hmmmm

Hephaestus ;)
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The Anti-Mike (profile), 22 Jan 2010 @ 6:56pm

Good morning from Thailand, where piracy is as strong as ever and the latest movies are for sale on every street corner!

I have to say that this is one of those deals where if you look at the numbers in one specific way, you can find a way to support the Torrent Freak story. But the 2nd page (of the two page link near the bottom of their story) shows the real truth:

File sharers spend 1/3 less on music than the highest category, "digital music buyers". I can understand there is some confusion, as the categories are not "either or" but rather than people can appear in more than one. It is clear however that those who share music tend to buy less of it (rather than more), even though there are some who do buy music (and are part of digital music buyers).

The real key to understanding the numbers is in the very firsst graph, showing how few file sharing people actually buy physical product. As physical product is still the largest part of the pie (in income), the rest of the story writes itself.

I think the most interesting numbers here are in the Ipod owners, who are not particularly heavy music buyers, but who are typically huge music consumers. Under normal times, someone with a device with 1000+ songs on it would likely have spent thousands of dollars to have such a collection. The numbers reported here show about $150 a year (or less) spent on music, which would mean they would have to spend for about 8 years to have the 1000+ songs on their pod. You would have to think that Ipod owners are likely also some of the most aggressive music sharers out there.

So even when presented with the alternatives, file sharers don't buy anywhere near as much music overall as the general public, which sort of shuts down all the "file sharers are great customers" spiel. It just isn't supported by the numbers, unless you want to ignore 75% of the market first.
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Anonymous Coward, 22 Jan 2010 @ 8:08pm

Re:
You "ignore 75% of the market" because these people would never be buying useless plastic discs in the first place.
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Anonymous Coward, 22 Jan 2010 @ 9:20pm

Re:
Good morning from Thailand, where piracy is as strong as ever and the latest movies are for sale on every street corner!

I hope you alerted the proper authorities?!?
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Sam I Am, 22 Jan 2010 @ 10:48pm

People who use privacy statute's to do unlawful things, also do lawful things.

Now there's a story.
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Phil, 23 Jan 2010 @ 1:02am

Re:
"...they would have to spend for about 8 years to have the 1000+ songs on their pod"

What do you find so suspicious about having thousands of songs on an iPod. One doesn't have to be a pirate at all to have that much music. Most of the iPod owners I know have burned their entire CD collection, and can carry it with them on their iPod. In some cases, their collection stretches back many years, and includes music they've burned from their vinyl records. Note that the article shows that 2/3's of iPod users don't use P2P to obtain music. More than 1/2 of iPod users buy actual plastic disks at least monthly. At just one CD per month that's going to be in the neighborhood of 130-150 songs per year. So... yes, 8 years would put you over 1000 songs, even at just one purchase per month.
So why do you find this troubling Anti-Mike? -- Could it be that you don't like fair-use and think the iPodders should have bought the music twice so they could have the second copy on their iPod.

BTW the iPod was introduced just over 8 years ago.
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Mike Masnick (profile), 23 Jan 2010 @ 3:47am

Re: Danger, Will Robinson
I'm not sure how one should interpret this Tweet from Mark Mulligan, who is quoted as the source for the TorrentFreak article:

http://twitter.com/Mark_Mulligan/status/8074993556

"RT @flypapertv Pirates are most valuable customers. http://vf.cx/jlB $$ Only problem with my quotes: I didn't even speak to the journalist!!"

I've seen the evidence that Mark did, in fact, talk to the journalist. He may be confused because it happened a few weeks ago, not this past week.

Either way, I'm at a conference and Mark is around (he's speaking right before me tomorrow), so I'm going to see if I can track him down to talk to him.
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The Anti-Mike (profile), 23 Jan 2010 @ 3:56am

Re: Re:
The proper authorities operate many of the stands. I think they know already.

Going price for photoshop CS4 with all the extra ads ons is about 200 baht (under $7 US). A few quick questions shows that these are downloaded online and burned to disk, as the cost of an internet connection to download it can often be higher than just getting the disc. Sort of interesting outcrop of filesharing, if you ask me :)

You "ignore 75% of the market" because these people would never be buying useless plastic discs in the first place.

I can't follow your logic. That is like suggesting that if we ignore rain, we won't get wet. How odd!
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Jeremy (profile), 23 Jan 2010 @ 7:45am

Re:
I've been buying music for a lot more than eight years. It was a good attempt at twisting the facts though.
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Anonymous Coward, 23 Jan 2010 @ 10:17am

Re:
Civil disobedience might be unlawful but you can understand why the public engages in it.
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Anonymous Coward, 23 Jan 2010 @ 10:18am

Re: Re: Re:
Did you at least lecture them on how they're hurting the artists and rights holders?
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Marcus Carab (profile), 23 Jan 2010 @ 12:42pm

Re: Re: Re: Danger, Will Robinson
The thread there has turned into a huge argument about piracy, and you haven't gotten an answer yet. Hopefully Mike has more luck, because I'm pretty curious about this too.

And just think, in a newspaper we never would have learned any of this.
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Mike Masnick (profile), 23 Jan 2010 @ 4:54pm

Re: Re: Re: Re: Danger, Will Robinson
The thread there has turned into a huge argument about piracy, and you haven't gotten an answer yet. Hopefully Mike has more luck, because I'm pretty curious about this too.

Mark did, in fact, email the TorrentFreak guy and did say what they claimed he said. I have the email in my possession. I think Mark is confused because that email conversation happened many weeks ago -- not this past week. Mark may have forgotten and not realized.

Will still try to talk to Mark tomorrow though.
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Marcus Carab (profile), 23 Jan 2010 @ 6:44pm

Re: Re: Re: Re: Re: Danger, Will Robinson
I certainly would have been surprised if TorrentFreak had made it all up -- but it also seemed like such a serious accusation on Mark's part! I hope you're right and it's all just a misunderstanding.
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Burgos, 24 Jan 2010 @ 7:19pm

Re: Re:
Assuming the word "file" means soft copy, then one could say that not everyone shares files because there are some who do not use a computer.

It depends on what you mean by "computer". Desktops? Laptops? Cellular phones? Portable media players?

Those who use a computer which is connected to the internet share files. That is the way the internet works.

The Internet isn't the only venue for file sharing. Haven't you ever heard of Bluetooth? What about microSDs?
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Marcel de Jong (profile), 25 Jan 2010 @ 4:11am

Re: Re:
Let me show you the pics I made last weekend.. oops that would make me a filesharer, I'd better not give you the link to my gallery, there might be something on those images that's copyrighted (like a branded t-shirt or some such).
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Anonymous Coward, 25 Jan 2010 @ 10:05am

Re: Re: Re:
Haven't you had your lawyers go through those pictures to determine if you can upload them to the internet!?!
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another mike (profile), 25 Jan 2010 @ 3:52pm

my music habits
For matters of comparison, let me state that I don't buy music. But I also don't steal it, either. There's just so much music available for free out there it isn't worth buying or stealing.
The only time I "pay for music" is if a band I like is playing locally, I might get tickets to go see them. Or a cover charge, or a couple drinks. They've got the CwF + RtB; mass market label issued dreck just can't resolve the equation.
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