File Sharing Down?

Brian Hindo/Business Week asks, Did Big Music Really Sink the Pirates? regarding lawsuits against file sharers. Hindo says that the PEW and comScore Media Metrix survey showing a decrease in KaZaA, Grokster, BearShare, and WinMX traffic show a narrow view of what's happening with filesharing. He says they don't consider that there are actually more files available on the networks for download, as well as a migration of users from those networks listed above to hipper systems like eDonkey and Bit Torrent which weren't measured. Also, PEW's methods of calling people may not get results because people may not now want to admit to filesharing. Also noted, according to:

Nielsen SoundScan, in 2003 CD album sales slipped 2% -- a less dramatic drop than the 9% slide the previous year. Also, fourth-quarter 2003 sales picked up 5.6% over 2002.

An interesting statistic, which could be interpreted to mean that the recession had an effect on music sales over the last three years, and now that the recession seems to be ending, people are spending more on music again. Seems like a conclusion in sync with the rest of the economy and sales figures for goods.

The major issue Hindo left out was that private file sharing networks may also be having an effect, causing users of KaZaa, etc. to move to networks that are private, small friend networks, encrypted and not detectable. Right now, we have no way of knowing what happens on those kinds of networks. Though his conclusion is what we've been saying for a long time:

What's clear, though, is that until the music industry gets fully behind online music sales, file-swappers will flock to next-generation sites like eDonkey -- which has seen 150% growth in the past year, according to independent tallies by both BayTSP and BigChampagne.

"This stuff is not going to go away," Gartner's (Michael) McGuire says. "The industry needs to provide a compelling legal alternative." Until that happens, pirates will continue to rule the online music seas.

Derek notes Coke's new service:

If I got my conversions right, you can stream any song for 20 cents and buy songs and albums for as low as $1.4 and 11.4, respectively.

Not quite cheap enough to be compelling, especially since $1.40 is 41 cents more than iTunes.

Posted by Mary Hodder at January 19, 2004 01:05 PM