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Is it threats or availability?

By Scott Bradner

It looks like the concept of paying for digital music may catch on after all. Some in the music industry seem to be convinced that if it does it's only because the music industry has been gang tackling little kids -- I'm not so sure.

In mid January the International Federation of the Phonographic Industry (IFPI) (www.ifpi.org) released a Digital Music Report (http://www.ifpi.org/site-content/library/digital-music-report-2005.pdf

) that said that legal music downloads in 2004 in the US, Germany and UK together totaled over 200 million songs, that there are now over 230 sites which offer legal downloads and that the 2004 digital music market was over $330 million. This is up very significantly from the previous year and the estimates are for the digital download business to double this year. In a possibly related story Apple Computer reported that they had sold over 10 million iPods during 2004. Many on-line music stores now have more than a million songs available for download.

The legal download world has changed dramatically in a year, what about the illegal download world? The same IPFI report says that the number of "infringing music files" available on the Internet declined by 30 million to 870 million since January 2004 and that the number of users of one of the downloading networks (Kazaa) had dropped from 3.2 million to 2.3 million over the year. The IPFI counts the number of music files offered but I did not see where they count the number of these files that are actually downloaded so I'm not quite sure what the relevance of the number of infringing music files is to anything real. In any case, it looks like the illegal download world has shrunk a bit while the legal download world is growing quite well.

The IPFI report and pronouncements by other parts of the music industry focus a lot of attention on the very aggressive 'sue your potential customers' mode of educating the public to the illegal nature of free music downloads. Statistics do show that awareness that music, even if some people claim it should be free, is anything but has risen in the last few years. It is possible that this increase in awareness is at least partially as a result of the early lawsuits but since the latest batch of suits received almost no news coverage I doubt that many if any of the target audience will be educated in this way going forward.

For a number of years I, and many others have been saying that lots of people, though not everyone, would prefer to be honest if there were an easy way to do so. (See for example http://www.nwfusion.com/columnists/2003/0512bradner.html) I think that we are seeing that honesty sells if someone is selling based on it. Another reason I think the industry reliance on lawsuits is not a factor here is that many of the people who use the Kazaa like services are young - the very group that, on the whole, assumes they would never be caught. Thus, in their mind they have no reason to fear the lawsuits. I think it's the wonderfully integrated player with download service package and a reasonable price for just what you want that has made the difference not an industry operating in bully-mode.

disclaimer: I'm not sure there is a way to say Harvard is not a bully without annoying someone so I won't - sufficient to say that the above observation about success from bullying is mine alone.