Why the LSE’s Piracy Arguments Just Don’t Hold Water

The renowned LSE this week published a paper arguing against implementation of the UK’s Digital Economy Act and calling for policy makers to recognize that piracy is not hurting the music industry but is in fact helping parts of it grow.  To these academic researchers the findings probably feel like some dazzling new insight but to anyone with more than a passing understanding of the music industry they are as if somebody just time travelled back to 1999.  The piracy-helps-grow-the-pie / help-makes-the-sky-not-fall / actually-helps-the-industry arguments were common currency throughout most of the first decade of the digital music market.  In more recent years though, following perpetual revenue decline and the growing plight of struggling ‘middle-class’ artists and songwriters, most neutral observers recognize that the piracy=prosperity argument just doesn’t hold water anymore.  Though of course that won’t stop the pro-piracy lobby fawning over this ‘research’ as more ‘evidence’ for their case.

Why Live Is NOT Saving the Music Industry

One of the key arguments the LSE paper makes is that the total music industry is in fact growing or is at least stable, primarily due to the impact of growing live income.  The ‘artists can sell tickets and merchandize to make up for shrinking music sales’ argument is frequently wheeled out by the pro-piracy lobby but it is one riddled with problems (and of course doesn’t apply at all to songwriters):

  • Live revenues are over reported: as impressive as global live revenues may look, they are not accurate.  Most often they include reseller revenue, which is income that does not go anywhere near the artists or any other part of the actual music industry.  A scalper reselling tickets at extortionately high prices on eBay doesn’t benefit an artist in any way but at a macro level can look like booming revenue.
  • Price hikes drive revenue: Much of the live revenue growth is actually from increased ticket prices, both from venues and resellers.  The average ticket price has increased by 34% in the last 10 years.  Only a portion of this increase gets passed back to artists and their managers.
  • Live income is unevenly distributed: Live simply isn’t working for many artists, those that do best are those are heritage acts.  According to Deloitte 60% of the 20 top-grossing US live acts are aged 60 or over.  This is where promoters and venues focus their efforts and it leaves little oxygen for the emerging acts.
  • The live boom will suffer: The likes of Bon Jovi and the Rolling Stones sell out massive arenas because they sold so many albums in the glory days of the recorded music industry.  What will happen when the generation of artists that do not sell millions get to the age where they hope live will pay the bills? The likelihood is that there will not be another era of heritage live acts such as we are seeing today.

A dependence on live income for building the case for piracy is thus fraught with difficulty and misunderstood assumptions.

The Right to Not Earn a Living?

Any discussion of the music industry makes an assumption about what actually constitutes ‘the music industry’. There is no single right or wrong answer other than the bits that really matter are the artists and the songwriters.  Therefore any proposal or framework for ‘saving the industry’ needs to ensure they can thrive.  Diminishing music sales and the various above-stated issues surrounding live mean that for most ‘middle class’ artists who didn’t make it big in the glory days of the CD are finding it harder to thrive.

Another tired argument that the LSE paper rehashes is the idea that artists should just want to make music for music’s sake.  That because of platforms like Soundcloud they can just make music without expecting or wanting to earn a living.  Of course every single one of us could do the same for our job too. A call centre operative could offer to forgo their salary, a bus driver could drive for free, a doctor could refuse her pay. All of which sound ridiculous of course, so why doesn’t it when applied to an artist?  Well actually it does, and that’s the point. The idea that somehow because music is creative that artists should not pollute this with seeking to earn a living is an utterly insidious concept.  If the LSE scholars truly believe this then I recommend that they henceforth refuse their stipends and insist on lecturing for free for the rest of their careers. And if they start finding the bills stacking up maybe they can start selling t-shirts or something?

When I spoke to Marillion’s Mark Kelly for my forthcoming book he made devastatingly simple comment on the impact of free and alternative business models on artists: “Artists have choice, a choice of what? To not earn a living?”  Piracy is having a hugely tangible and real impact on artists and songwriters, and guess what, it is not a positive one for most.

Does the music industry still need to undergo dramatic change? Of course it does.  Do many record label practices still need changing? Of course they do?  Do Artists need to get even better at making alternative revenue streams work? Of course they do.  Should change be happening more quickly?  Yes, of course it should. But crucial progress is being made on all fronts and what matters most is that all responsible parties and stakeholders (and that includes government) do what they can to ensure that a fair and level playing field is created.  Not for the sake of an ethereal macro economic concept of ‘the music industry’ but for the the struggling indie label boss, the small gigging artist, the part time manager and the aspiring songwriter.  Ask them what they think about piracy and how it is impacting the music world.  That’s where you will heae the answer most grounded in earthy reality, not in an academic reworking of obsolete, half baked piracy lobby arguments from yesteryear.