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'Net Insider

Is it threat or availability?


By Scott Bradner

Network World, 01/31/05

Scott Bradner


It looks like the concept of paying for digital music might catch on after all. Some in the music industry seem to be convinced that if it does it's only because the music industry has been tackling kids. But I'm not so sure.


In mid-January the International Federation of the Phonographic Industry (IFPI) released a Digital Music Report  that says legal music downloads in 2004 in the U.S., Germany and the U.K. together totaled more than 200 million songs; that there are now 230-plus sites that offer legal downloads; and that the 2004 digital music market topped $330 million. All those numbers are up significantly from the previous year, and estimates are for the digital download business to double this year.


In a possibly related story, Apple reported that it sold more than 10 million iPods last year. Many online music stores now boast more than a million songs available for download. The legal download world has changed dramatically in a year, but what about the illegal download world?


The same IFPI report says that the number of "infringing music files" available on the Internet declined by 30 million, to 870 million, since January 2004 and that the number of users of one of the downloading networks (Kazaa) had dropped from 3.2 million to 2.3 million over the year. The IFPI counts the number of music files offered, but I didn't see where the group counted the number of these files that are actually downloaded, so I'm not quite sure what the relevance of the number of infringing music files is to anything real. In any case, it looks like the illegal download world has shrunk a bit, while the legal download world is growing quite well.


The IFPI report and pronouncements by other parts of the music industry focus a lot of attention on the very aggressive "sue your potential customers" mode of educating the public about the illegal nature of free music downloads. Statistics show that awareness has risen in the last few years that music, even if some people say it should be free, is anything but. It is possible that this increase in awareness is at least partially a result of the early lawsuits. But because the latest batch of suits received almost no news coverage, I doubt that many if any of the target audience will be educated in this way going forward.


For a number of years, I and many others have said that lots of people, although not everyone, would prefer to be honest if there were an easy way to do so.


We are seeing that honesty sells if someone is selling based on it.


Another reason I think the industry reliance on lawsuits is not a factor here is that many of the people who use the Kazaa-like services are young - the very group that, on the whole, assumes they would never be caught.


Thus, in their mind, they have no reason to fear the lawsuits. It's the wonderfully integrated player with download service package and a reasonable price for just what you want that has made the difference, not an industry operating in bully mode.


Disclaimer: I'm not sure there is a way to say Harvard is not a bully without annoying someone, so I won't. Suffice it to say that the above observation about success from bullying is mine alone.