The Real Effect of “Piracy”?

The music industry says online piracy’s killing the biz. A UTD prof says it isn’t:

In recent weeks, Liebowitz has become the journalist’s go-to guy on the issue of online music distribution–a very sexy topic, especially if you’re a college student with a broadband connection and a CD burner, a record-label exec terrified of losing your job or a politician taking big bucks from the music industry. In May, Liebowitz published a widely circulated and much-debated study on the subject, and his forthcoming book Rethinking the Networked Economy deals extensively with how the widespread circulation of “pirated” MP3s is–or, rather, isn’t–damming the music industry’s revenue stream. His study, published by the Cato Institute, garnered him considerable attention among fellow academics, industry folks on both sides of the issue and the mainstream media.

Liebowitz’s is a straightforward reading of a complex issue: Despite the industry’s claims to the contrary, the downloading of music on the Internet is not, at this moment, hurting the record industry. It might one day; it just ain’t happening yet.

“The record industry is sort of sitting in a position where–and you can understand their position–they’re saying, ‘We don’t want to take any chances. We don’t want any technologies that might hurt us,'” Liebowitz says. “And I can even see their point. But I have often claimed that the new technologies they said were going to hurt them didn’t hurt them.”

But just try telling that to the Recording Industry Association of America, the music-biz trade group that, so far, has sued out of existence several music-swapping outlets, including Napster and AudioGalaxy, without offering any viable solutions of its own. Try telling that to the major labels that keep offering pricey and, ultimately, unsatisfying alternatives to file-sharing systems such as Kazaa and Gnutella. Just last week, Pressplay, a joint venture between Vivendi Universal and Sony, announced you could download and burn all the content you wanted for $180 a year–even though you’d have access to the back catalogs of just the two labels, and even then, not all their artists.

And try telling politicians like Representative Howard Berman that file-sharing isn’t bad for business. Berman, a California Democrat with financial backing from the music business, just last week introduced legislation that would give the recording industry the right to hack into computer networks if it thought someone was “stealing” copyrighted material. He has the support of the RIAA, which long ago started treating consumers like thieves, anyway. Never has an industry had such contempt for its patrons…..