Illegal downloading did not cost the UK record industry £1 billion

Fun with bullshit statistics: the BPI says dodgy downloads cost record companies nearly £1 billion this year. But as the Guardian points out, even the BPI knows that figure is massively exaggerated:

While the notional worth of the 1.2bn illegal downloads was almost £1bn, the BPI estimated the actual loss from “forgone spend” was £219m in 2010.

Andrew Orlowski at The Register has a wonderful take on the news:

The British record industry group estimates there are 8 million people, or 23 per cent of the UK online population, using P2P software.

That means around two-thirds to three-quarters of people don’t indulge in piracy – a figure rarely mentioned in this debate, and a remarkable figure considering the risk of being caught (which are negligible) and potential savings (which are considerable). That means most people are fairly honest, and a considerable amount of money is not being tapped by the legitimate music business.

The BPI figures also neglect to mention that the music business is growing. Yes, sales of physical products are declining, but overall it’s party time. A report by PRS last year showed a changing industry:

retail product sales have declined, but the other parts of the industry have grown noticeably more than the decline in retail sales. This growth has come from a few sources. Live show attendance has increased more than retail sales have decreased. Consumers have actually spent more. On top of that, the business to business side of the industry (sponsorships, licensing, advertisements, etc.) has grown as well, opening up new and lucrative means of making money.

It’s not all good. There are real concerns that the money’s coming largely from established acts, the U2s and the Muses and the Rihannas and so on: they get a disproportionate share of the money pie, and there are fears that there isn’t another generation of enormo-acts behind them.

That may be true, but the reason for that isn’t piracy: it’s a whole mess of factors including an increasingly fragmented media landscape, the rise of alternative forms of entertainment such as videogames and so on.

Another big factor is the way in which record companies have changed: increasingly the landscape is one of mega-corporations whose need to satisfy shareholders means they want results now, not ten years from now. As the cliche goes, if U2 were around today, they probably wouldn’t get signed – and if they did get signed, they’d be dropped before their third album.

Over at No Rock, Simon H B adds:

Taylor [Geoff Taylor of the BPI] ends with a plea for more legislation. The BPI always think that what is needed is more unenforceable legislation.

How could the record labels ensure their demands get a sympathetic hearing? Here’s one idea: Private Eye reports that Universal Music gave £80,000 to the Tories in July.

Back to Simon:

The trouble is, with the bunch of turnips sitting in Westminster at the moment, they might get their wish. More time, money and effort trying to buck the marketplace. It’ll still fail, though.