Thursday, July 30, 2009

The Tenenbaum trial: People say the funniest things under oath

So, the Tenenbaum trial is now basically about how large the "damages" should be, as Judge Nancy Gertner granted a summary dismissal on the fair use defence. Because, hey, why should we even bother listening to the arguments properly, right?

Now the trial is burrowing into the issue of losses sustained by the music industry, which led to this surprising claim:

Turning to the critical issue of harm, plaintiffs called their expert Stanley Liebowitz, an economics professor at the University of Texas at Dallas, who opined forcefully that file-sharing has harmed the market for recorded music. Liebowitz displayed a graph that showed the revenues from recorded music rising fairly steadily from 1973 until 1999, when they dropped dramatically and continued to fall through 2008, the last year for which he had data.

The cause of the sudden turn for the worse in 1999? Napster, testified Liebowitz. Recorded music revenues dropped from $18.5 billion in 1999 to $8.5 billion in 2008 (both in 2008 dollars). Liebowitz explained how he considered various explanations for the drop in revenue: overall economic conditions, change in prices, and consumer shifts in entertainment purchases away from music to DVDs and videogames. But, he said, the data simply didn’t support any of these explanations, leading him to conclude that the real culprit was consumers’ newfound ability to obtain music on the Internet without paying for it.

Now, I can see that you might be able to construct an argument that unlicenced file-sharing harmed the recorded music industry. But to suggest that there's no data which supports other theories as to cause of the decline is flabbergasting. The shift of CD sales from specialist stores to supermarkets, and the consequent repricing of the highest sellers from luxury purchase to impulse buy can't, in any way, explain the drop in value of music sold? Seriously? The rise of the DVD, combined with the end of a golden age of people repurchasing their vinyl records as CDs - that isn't apparent in the data Liebowitz has seen?

To say nothing of his apparent - fallacious - assumption that the music industry would naturally carry on selling more and more, year on year. Is it not possible the CD and the lure of buying your collection over and over again disguised what would otherwise have been a drop in sales from the start of the 1980s? After all, if you look at sales, Thriller is the one to beat. That came out in 1983, just as CDs were becoming commercially available. Could it be the decline in sales is more because the industry became obsessed with repackaging its old shit instead of focusing on fresh?

Apparently not, according to Liebowitz's testimony. Napster, and Napster alone, broke five multinational companies.

The case continues.

To say nothing of not even consider


Robin Carmody said...

Record sales *did* drop at the start of the 1980s, at least in the US. Thriller saved the industry's skin back then.

Cobardon said...

That's rubbish, Robin Carmody.

It might have had a hand in saving the record company it was on, but it's hard to see how it 'saved' other labels - plenty of multi million selling acts in the era (the Police, Phil Collins, U2, hell, Bucks Fizz!)

The idea that 'Thriller' single handedly rescued, say, Virgin or A & M is perverse in the extreme.

brian gladys said...

Thank you, your article is very good

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