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Pirate Flags: Music Business Says Piracy Still Threatens Its Future – Forbes

PARIS, FRANCE – JANUARY 06: In this photo illustration, the logo of the Swedish music streaming … [+] service Spotify is displayed on the screen of an iPhone on January 06, 2017 in Paris, France. Spotify announced, via a tweet published Thursday, that it now has 70 million paid subscribers. As a comparison, in September, Apple Music claimed 30 million subscribers and Deezer had fewer than 10 million subscribers. Spotify, the world’s largest streaming music company, is expected to be listed on the Wall Street stock market in the first quarter of 2018. (Photo by Chesnot/Getty Images)
As far as the record industry is concerned, the existential (and the literal) threat of piracy has not been negated by the rise of streaming. Legal action continues and studies claim the issue steadfastly refuses to disappear despite the very idea of owning MP3s feeling anachronistic to most music fans.
The litigation focus has moved in the past decade away from dedicated pirate sites towards software creators that allow users to “stream rip” tracks from existing services, notably YouTube – which offers a mix of videos uploaded by the content owners alongside UGC that may contain music but which rights owners can claim and monetise
The scale of the litigation against stream-ripping can be enormous. The RIAA, representing US record companies, recently won a case against YouTube-rippers FLVTO.biz and 2conv.com (both of which had were previously required to block access to individuals in the US). This legal action could see the trade body receive $83 million in damages. 
This legal action coincided with the publication of a white paper published by Muso, a digital piracy monitoring and measurement company. It claims to have analysed 182 billion visits to piracy websites last year to gather the information for its report, adding that this was an increase of 15.2% from 2020 in terms of the data it was processing. 
Muso piracy report
It stated that the US was the biggest piracy market, accounting for 10.6% of all global traffic here (equal to an average of 68 visits to a piracy site per internet user). The music business can take some relief from the fact that TV piracy dominates, accounting for 50.3% of all traffic globally; film made up 11.2% while music was just 8.1%. 
“The music industry’s decision to not encourage exclusive content on streaming platforms has had a positive impact on music piracy over the past 5 years,” Muso suggested. 
Exclusives were briefly in vogue in the early days of Tidal and Apple Music where artists would give them exclusive release windows before allowing their music to go onto rival services. Such deals were struck, in part, to try and close the gap on Spotify’s market-leading position. 
Muso did, however, point to stream-ripping as a growing driver here of music piracy. “These sites accounted for 39.2% of music piracy in 2021, up from 33.9% in 2020,” it noted. 
For the first decade and a half of the 21st century, coverage of the record business was packed with rolling stories about the threat and impact of digital piracy, as well as the swing into litigation against both P2P services themselves and the serial uploaders who enabled vast numbers of tracks to be accessible for free. 
Since the arrival of Napster in late 1999, downloading of unlicensed MP3s grew at a phenomenal rate. There were arguments this was killing the record business, but also counter-arguments that users of sites such as Napster and the many which came in its wake were treating such downloading as a “try before you buy” opportunity
381116 07: Napster founder Shawn Fanning appears at a press conference October 31, 2000 in New York. … [+] Bertelsmann eCommerce Group announced it is teaming with the Internet music-swapping service Napster to develop a new membership-based distribution system that would guarantee payments to artists. (Photo by Chris Hondros/Newsmakers)
The arrival of iTunes Music Store in 2003 was the first success in getting people to pay for downloads at scale. The steady rise of streaming, however, saw consumption of music move to a model based on ownership (of CDs, of MP3s, of LPs) to one built entirely around access (via streaming services that were free, but running on advertising revenue, or based on monthly subscriptions).
Streaming is now the bulk of the record business globally and has helped industry revenues to rise again after many years of decline. (How that streaming income is paid through to songwriters and recording artists, is, however, a whole other debate.)
Streaming made up 62.1% of the global record business in 2020 according to IFPI. Of the $26.1 billion generated that year for the record business, $13.4 billion came from streaming, $4.2 billion came from physical sales (such as vinyl, CD and cassettes) and downloads accounted for just $1.2 billion – a mere 4.6% of the total market. 
The ongoing issue for the record business is that, even with huge changes in consumption and the fact that ownership is massively overshadowed by access, piracy still endures among a particular subset of people online. Part of this is ideological, where they feel they are striking a political blow against corporations. Another part of this is habitual – they use pirate sites because they have used them for many years and have no interest in shaking the habit. 
PARIS, FRANCE – APRIL 08: In this photo illustration, the logo of the music streaming platform Apple … [+] Music is displayed on the screen of an iPhone on April 08, 2019 in Paris, France. The number of paying subscribers to the music streaming service of Apple Music has for the first time exceeded that of Spotify customers in the US. The two platforms now have 28 and 26 million paying users, respectively, sources told the Wall Street Journal. (Photo by Chesnot/Getty Images)
Back in 2006, John Kennedy (then the head of IFPI) said of online music piracy, “It will never go away completely.” At the time, this was seen by some in the record industry as a dangerous admission of defeat by the head of the trade body that was supposed to protect their interests globally. 
A decade and a half later and that line takes on a different resonance. Piracy will continue to exist, but for the record business its revenues are steadily growing rather than declining; it is therefore something it can, as much as it might be politically upsetting to accept, live with. 
As such, piracy in 2022 feels more like paper cuts than the flesh wounds of the early 2000s.

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