When we look at the statistics, we see that the cultural sector is making as much money now as it did ten years ago (or slightly more, due to the general increase in standard of living). People are spending as much money as ever on culture, regardless of the fact that they can download just about anything for free, and frequently do.
If they no longer spend the money on one thing, they spend it on something else. Music fans are spending just as much money as they used to on music, but since they are spending less on plastic discs, they are spending more on going to live concerts. This is bad news for the record companies, but it is great news for the artists, who get a bigger piece of the pie.
More money than ever before goes into the cultural sector, but sometimes through a different route.
It is quite natural that this should be the case, if we think about our own every-day experience of how an ordinary private economy works. When you get a salary every month, you first spend most of it on rent, food, bills, and other boring things. Then, if you’re lucky, you have a little bit left that you can spend on entertainment, i.e.: culture.
If you no longer spend that money on buying plastic discs, you can afford to go and listen to some live music instead. You’re going to spend the money one way or another, so someone in the cultural sector will get it.
It is still very difficult to make a living as an artist, it always has been, and it always will be. But at least it has become a little bit easier than it was before the Internet and p2p file sharing. In the music business, total revenues have increased slightly, while the big record companies are getting a smaller piece of the pie. This has left more money for the creative people who actually make the music (rather than just distribute it).
File sharing is not a problem that needs to be solved. It is something that is positive for both artists, consumers, and society as a whole. All we need to do now is to get copyright legislation in line with this new and positive reality.
By reforming copyright to legalize p2p file sharing that is done without direct commercial intent, we can put an end to the criminalization of an entire generation, while at the same time improving conditions for a vibrant cultural sector in Europe.
Studies On The Cultural Sector In The File Sharing Era
There is quite a lot of academic research on how the cultural sector, including the music business, has fared in the file sharing era. These studies make very interesting reading, and should be obligatory reading for all politicians involved in copyright policy making.
First, three studies on the music business in various member states:
• UK 2004 – 2008 : Record companies lose, artists gain from file sharing
• Sweden 2000 – 2008: More Charts The Record Labels Don ’ t Want You To See: Swedish Musicians Making More Money
• Norway 1999 – 2009: Artists Make More Money in File-Sharing Age Than Before It
All three studies conclude that although record sales are down, revenues from live performances have increased dramatically, in a way that more than compensates for the drop in sales of recorded music.
The Dutch study
A Harvard study from 2009 takes a look at the wider implications of file sharing for society, and finds that since the advent of file sharing, both the number of music albums and films released per year have increased. Canadian law professor Michael Geist summarizes the study under the heading
The Hargreaves report was commissioned by the UK government, and published in May 2011. It makes a strong call for evidence-based policy making in copyright matters, as opposed to having policy determined by the weight of lobbying.
Although the report is by no means a “Pirate Manifesto”, it makes several concrete proposals for policy changes that would at least go in the right direction.
The studies that have been mentioned here are summarized in a little more detail in the following sections.
UK 2004 - 2008: Record Companies Lose, Artists Gain From File Sharing
Above you find
Times Labs has made an analysis of the music market in the UK for the last five years, based on data from the UK collecting society PRS.
In the graph, the top field is what the record companies make. The four other fields are what the artists make. The conclusion is very clear:
Record companies are making less, artists are making more, and the total amount is constant.
The reason record companies are making less money than they used to is probably due to file sharing. We Pirates happy to concede that. File sharing is a much better way to distribute music, so the service that the record companies provided is less and less in demand. It is only natural that they are in decline.
The best thing about this, is that the artists are making more money. People are spending just as much as they used to on music, but the record companies are getting less. Instead, the artists have increased their share to soak up the money that has become available.
This is an excellent development, and something we should embrace. File sharing should be legalized. The artists are the ones who have the most to gain.
Sweden 2000 – 2008: More Charts The Record Labels Don’t Want You To See: Swedish Musicians Making More Money
Mike Masnick at
We’ve already discussed the research on the UK music industry that shows both that live revenue is more than making up the decline in recorded revenue and that musicians themselves are making more revenue than ever before. Some
