Who’s Got The BPI’s Missing 0.81 Billion?

The BPI have just announced another round of law suits against file sharers. I’ve written extensively about this action before so won’t repeat myself now.

What I have an issue with this time is the BPI’s over emphasis on the the actual impact of file sharing. They claim that file sharing has cost the UK music industry 1.1 billion pounds over the last 3 years. That is simply not the case. The UK music industry in 2002 was worth just over 2 billion pounds. In 2005 it was worth 1.85 billion. That is a total cumulative decrease of 0.29 billion. Where’s the extra 0.81 billion?

Perhaps they mean that the impact goes back before the 3 years? Well if you go back to BF (before file sharing) 2000 was the first year that there was any meaningful file sharing in the UK. The UK music industry then was actually smaller then than in the following year, so the cumulative loss is actually smaller: 0.14 billion pounds.

The BPI should
a) know better than to infer that consumer survey data is actual national market revenue data (however much it might help their PR push)
b) accept the fact that there are many bigger reasons impact declining music sales (prices too high, physical piracy (a MUCH bigger factor according to sister organization IFPI), competing expenditure (DVDs, games consoles etc.)

File sharing is a crucial factor for the future (in the way it is changing behaviour patterns amongst youth) but is currently just one element of a wider mix. File sharers represent just 10% of UK Internet users and just 5% of the total UK population. If, (and this is a highly hypothetical IF) these 3.3 million file sharers are really responsible for 1.1 billion in lost spending, that means that they had to not spend 110 pounds each per year, which puts them above average spending for UK music buyers. If that really is how much they would have otherwise spent, then the music industry has got a bigger problem than it could have imagined – that would mean that all the music aficionados have switched over to file sharing. But of course they haven’t, because that spending simply wasn’t there before file sharing.

To finish off, I am not under estimating the importance of tackling file sharing. It needs to be hit head on, and legal action against individuals is a necessary part of the strategy. But it certainly isn’t responsible for what is actually the 60% of the current size of the UK Music industry.