Wednesday, June 24, 2009

Feargal Sharkey counterblasts

Charles Arthur's piece in the Guardian a couple of weeks ago has sent Feargal Sharkey off to the study, to don his UK Music hat and fight back:

Charles Arthur, the Guardian's technology editor, says: "We saw the release last week of some 'research' that said 7 million people 'use' illegal downloads in the UK, 'costing the economy billions of pounds and thousands of jobs'" (Filesharing isn't music's biggest foe, 11 June). He points out that these numbers don't stack up - that you can't equate every illegal download with a "lost sale"- and asks why the music industry keeps putting them forward.

It's a fair question. So why do the music industry keep putting them forward, Feargal?
Writing as chief executive of UK Music, the umbrella body representing the commercial music industry, the simple answer is: we didn't.

Strictly speaking, this is true - UK Music, specifically, hadn't said it the other week. But this is a standard stand-by for the music industry for years. But let's just concentrate on this one example. Do carry on, Feargal:
The report referenced came from the Strategic Advisory Board for Intellectual Property (Sabip) - an advisory board to the Intellectual Property Office.

Well, yes, it did. And where did they get that figure from, Feargal? Ben Goldacre, you'll recall, tracked it down:
I hunted down the full Ciber documents, found the references section, and followed the web link, which led to a 2004 press release from a private legal firm called Rouse who specialise in intellectual property law. This press release was not about the £10bn figure. It was, in fact, a one-page document, which simply welcomed the government setting up an intellectual property theft strategy. In a short section headed "background", among five other points, it says: "Rights owners have estimated that last year alone counterfeiting and piracy cost the UK economy £10bn and 4,000 jobs." An industry estimate, as an aside, in a press release. Genius.

That this was a figure cooked up by the creative industries, Feargal seems to believe, proves his point, rather than blows it out the water:
This was not focused solely on music, but on digital consumption across Britain's creative economy.

Ha! You see, music doesn't say that illegal downloads are lost sales, because it's said by a whole group of people making money out of intellectual copyright. That's completely different.

So if a gang of us got together and chanted "Feargal, you've lost it", none of us would actually be saying it, because we all would.

But even if you accept that - and, frankly, you'd probably be advised to keep away from knives and driving if you do - there is still the difficulty that people believe the music industry keeps claiming an unlicensed download is equal to a lost sale because, erm, the music industry has said so. Under oath:
However, the RIAA and Lionsgate Entertainment had both submitted requests for restitution—they had argued that each individual copy of content downloaded through Elite Torrents was the equivalent of a lost sale. For example, the RIAA said that 183 albums were transferred through Dove's server 17,281 times, then multiplied that by the wholesale price of a digital album in 2005 ($7.22) to conclude that its member companies were owed almost $124,769 in restitution, or $47,000 if Dove agreed to be part of an RIAA "public service announcement" about piracy. Similarly, Lionsgate said that it owned copyrights to 28 of the 700 or so movies that Dove served up—Lionsgate argued that Dove caused the movie industry to lose some $22 million, and since Lionsgate owned copyrights to about 4 percent of the available movies, it was owed $880,000.

Surely Feargal knows about this sort of claim? Would he be the right person to be chief executive of a musical umbrella if he didn't? But if he does, why would he try and pretend that it isn't at the heart of one of the key claims many of those sheltering under that umbrella?

Sharkey runs through Arthur's stance that music is losing out not to piracy, but to people spending their money in other places. And then:
Of course music faces intense competition for wallet share from games, movies and a host of others. It's a fact of digital life that the switch from physical to online purchasing results in revenue displacement - something most newspaper proprietors would acknowledge.

The music business is embracing these challenges. Music has never been so accessible or affordable. The UK has more licensed digital music services than any country in Europe. Fans can download MP3s for as little as £0.29, or use streaming services like Spotify or We7 for free. Universal Music recently announced plans for the world's first unlimited download subscription service.

Erm... wasn't Nokia's Comes With Music the first unlimited download subscription service? No matter.

If you were coming new to this story, you might be impressed to hear that the music industry has been go-ahead, embracing digital distribution and cutting their prices to reflect the new realities. You might be surprised - "why", you might say, "I would have assumed that the music companies would have reacted with paranoid petulance, dragging their feet slowly to develop digital services, and even when reluctantly doing so, trying to keep prices artificially high in the hopes of making the same revenue for a digital product as they used to for an item which required manufacture, storage and distribution. I may even have assumed the price would have been set low - against the labels' will - by public realisation that the supply of digital music was now virtually infinite and that the price should tend towards zero."

Having slapped the music industry on the back - the back they've been so long staring wistfully over - Sharkey then wags his fingers:
However, to deny that a totally free, unregulated peer-to peer ecosystem - which redirects revenues from UK creators, artists and entrepreneurs towards Pirate Bay and other unlicensed businesses - has a negative impact on jobs is illogical.

Well, no it isn't, Sharkey. In fact, it flows perfectly logically from Charles Arthur's belief that filesharing isn't having much, if any, impact on sales. If it isn't affecting sales, it can't be affecting jobs. You might dispute Arthur's central contention, but that doesn't undermine the logic.

For my part, I'm not quite sure how a system can be "totally free" and have its revenue redirected. That seems to be a bit illogical.
Arthur concludes that such a correlation is "idiotic". "The music industry's deadliest enemy isn't filesharing - it's the likes of Nintendo, Microsoft and Sony, and a zillion games publishers", all of whom persuade consumers to spend £40 on a game as opposed to a "CD for £10 containing two good tracks and eight somewhat less inspiring efforts".

Yes, yes he does.

To most readers, what Arthur was saying was that, frankly, most albums aren't really all that good and crowded with filler. Given the way the music industry mutters about individual downloads, instead of album-sized packages, you might assume that this was uncontentious - most labels know that, given the chance to choose, most consumers wouldn't bother with many tracks off an album because they're only interested in one or two tracks.

Feargal, though, isn't having any of it:
Such stereotypes do his argument no favours. The UK leads the world in terms of musical diversity and creativity. British artists and the UK's music business are innovating and experimenting. We want to work with music fans and have them use legal, licensed services.

Stereotypes? Good god, is Feargal suggesting that saying many Top 40 albums aren't entirely chock-full of value is stereotyping, like racism or sexism? Will the next deputy mayor Boris loses be canned when he's overheard saying that the new Kasabian one could lose four or five tracks without anybody being too upset?

You'll also notice that his little outraged flounce allows Sharkey to completely ignore Arthur's point that most albums aren't as attractive a purchase when compared to the value given by a computer game. He's so busy crying "people who make albums are creatively creative" that he somehow neglects to pick that one up.
We are not alone in this dilemma. Every copyright-based business has been affected by online distribution and online power-shifts. Music was the first; we are moving forward, but none of us have a monopoly on the challenges, opportunities or solutions.

Indeed, Sharkey actually doesn't really seem interested in talking about that charge - that the record industry is a victim of its own ropey products, instead using the column to talk about how hard it all is, and how hard the industry is working. And no wonder - given the amount of special new rules the private companies that control mainstream music are seeking from government, they're not going to want to enter into the fundamental question of if they're any good for music.


Anonymous said...

"to deny that a totally free, unregulated peer-to peer ecosystem ... has a negative impact on jobs is illogical."

Another point that people in Sharkey's position never seem to consider is where exactly these job losses are happening. What I mean is that they are reluctant to admit that there are a number of jobs that have been created over the years that are utterly superfluous to the actual music (that's the tunes and singing, in case Feargal has forgotten). Jobs of this sort have been lost because they never should have existed in the first place.

tomsmiled said...

Simon - see this blog post from JP Rangaswami, MD of BT Design, and blogger at, in which he refers to Frank Zappa's 'Proposal for a system to replace ordinary record merchandising' from 1983. JP makes some interesting points re piracy, value and perceived value.

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