Music piracy is down: A lesson for Hollywood

Steve Jobs is often credited for offering a revolutionary way to curb music piracy. It wasn’t to drag music fans into court, saddling them with crippling debt and legal fees. It wasn’t about convincing ISPs to institute a copyright alert system to hassle users. No, the Apple co-founder had a much simpler solution: Jobs believed you could convince people to obtain legitimate music tracks by competing with piracy and offering a better user experience.

Nearly ten years after the iTunes Stores debuted, people are still turning away from piracy to buy music from vendors such as Amazon and Apple. And the trend of obtaining officially sanctioned music from legitimate sources is only increasing, according to the NPD Group’s annual survey of music consumer behavior.

Music piracy over peer-to-peer networks declined by 17 percent in 2012 compared to the year previous, based on NPD’s online survey of more than 5,000 U.S. Internet users between December and January. That decline translates into about 12 million fewer American audio pirates between 2011 and 2012. And the number one reason NPD cited for the precipitous drop in music piracy was free, ad-supported streaming services such as Pandora, Slacker, and Spotify.

The ubiquity of services like Slacker Radio increases their utility.

Free streaming isn’t just taking a bite out of P2P piracy either. Other forms of music sharing are also on the decline, such as borrowing and ripping a friend’s CD, trading music files through good ol’ sneakernet, and sharing via online storage services. The decline makes sense. Why bother going through the hassle of ripping a CD yourself or importing files from a USB thumb drive when the same music is only one click away on Spotify or Amazon’s new AutoRip service?

Not-so-coincidentally, the same day that NPD released its Annual Music Study, the International Federation of the Phonographic Industry—a multinational organization representing the recording industry—announced that digital music sales were up 9 percent in 2012, which helped spark a 0.3 percent boost in overall music revenues. That's the first time the industry's revenues have been in the black since 1999.

"Licensed music services are demonstrably meeting consumers' needs," IFPI's press release says.

The Hollywood mish-mash

While music piracy is trending downward, Hollywood is still trying to stamp out piracy the old fashioned way by combatting file sharing head on. The Motion Picture Association of America was a big proponent of the Stop Online Piracy Act that failed in Congress last June. Now, the powers that be in Hollywood are big supporters of the current Copyright Alert System (CAS), dubbed by critics as the “ copyright surveillance machine.”

Don't get me wrong: The music industry is certainly pushing for more legislation to punish copyright offenders and is also behind the CAS. But music makers appear to be in a much better position in 2013 than their counterparts in Hollywood.

For HBO’s Game of Thrones alone, there were 4.3 million downloads of a single episode in 2012, earning it the distinction of being the most pirated TV show of the year, according to Torrent Freak. A quick check of The Pirate Bay’s Top 100 downloads for the past 48 hours shows a list filled with popular TV shows and movies, with exactly zero music downloads cracking TPB’s top charts. And that’s not counting the countless sites offering links to pirate streams of premium movies and TV shows.

HBO

It’s pretty safe to say that video content is the most popular target of pirates right now, and it’s not hard to see why. Unlike the music industry, movies and TV shows are locked down for extended periods of time. Game of Thrones Season 2, for example, only came out on DVD and Blu-ray last Tuesday and hit iTunes in late December, even though the show ended last June.

When TV and movie offerings finally do come online they get fragmented across a staggering variety of service providers. If you want older movies, or titles that have been out on DVD for a while, then Netflix should do, but not always. If you’re looking for Downton Abbey, a Hulu Plus subscription will let you see the first two seasons. But season 3—and later season 4, as well as a fifth season if one is produced—will be available starting in June exclusively on Amazon Instant Video. You need a scorecard just to keep up.

To top it all off, anything you purchase and download—whether it’s a Mad Men episode or a copy of the 1964 film Zorba the Greek—is locked down with digital rights management. That means you're stuck watching your purchased content through Amazon, iTunes, or whichever service you prefer to buy content from.

The music industry may still be wrestling with piracy, but widespread availability and DRM-free content have helped curbed the appetite for illicit downloads. Hollywood, meanwhile, is still playing the exclusivity game, and many of their most ardent customers are leaving them behind, having set sail long ago for The Pirate Bay.

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