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The BPI’s blatant misrepresentation of the actual impact of file sharing

Not my words: that’s a comment by respected industry analyst Mark Mulligan from Jupiter Research. He says:

They claim that file sharing has cost the UK music industry 1.1 billion pounds over the last 3 years. I’m sorry but that is piffle. The UK music industry in 2002 was worth just over 2 billion pounds. In 2005 it was worth 1.85 billion. That is a total cumulative decrease of 0.29 billion. Where’s the extra 0.81 billion?

The BPI should

a) know better than to infer that consumer survey data is actual national market revenue data (however much it might help their PR push)

b) accept the fact that there are many bigger reasons impact declining music sales (prices too high, physical piracy (a MUCH bigger factor according to sister organization IFPI), competing expenditure (DVDs, games consoles etc.)

I couldn’t agree more. As Mark points out, the BPI’s figures mean that each and every file sharer has suddenly stopped spending £186 on music – which is far, far more than the average spend (most people buy around six CDs per year) and doesn’t take into account other forms of spending. For example, sales of ringtones are expected to hit £142.6 million in the UK this year; in 2005, sales of computer games in the UK hit £1.35 billion, making it the best year ever.

Sure, some people are file sharing instead of buying music. But I suspect that the number of people buying games instead of CDs is much higher.

Update

You’ve got to love No Rock’N’Roll Fun, which covers the same story: BPI Responsible For The Deaths of 3,759 People In The UK. As Simon writes:

No, they’re not, actually, but since they’ve decided to announce that illegal downloading has cost the UK music industry a billion pounds, we thought we’d pluck an eyecatching figure out the air and use it as a headline, too.