The $8 Billion iPod: Entrepreneur Rob Reid Ridicules Music Piracy Claims

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Rob Reid, co-founder of, the company that started music service Rhapsody, delivered one of the most popular talks at the TED conference I attended recently. Launched in the late ‘90s, Rhapsody, along with Napster and other services, revolutionized the music industry. At TED, Reid explained something he called Copyright Math, a way of explaining the sometimes inexplicable numbers cited by both the Motion Picture Association of America and the Recording Industry Association of America as arguments against piracy.

The $8 Billion iPod: Entrepreneur Rob Reid Ridicules Music Piracy Claims finally put the five-minute talk online late this morning and it already has more than 40,000 views. It received one of the few standing ovations at TED.

$150,000 lost per song theft?

The video is definitely worth a watch, but here are a couple highlights:

  • The RIAA argues that $150,000 is lost for every illegal copy of a song. Based on this argument, an iPod Classic could carry up to $8 billion in pirated music.
  • The MPAA says that $58 billion and 370,000 jobs are lost annually to piracy, yet, Reid argues, only the music industry is down in revenue since 2000 and by nowhere near $58 billion.

When I talked to Reid at TED, the music veteran (who's married to G4 star Morgan Webb) suggested that piracy cannot be stopped by aggressive, SOPA-style laws or exaggerated stats, but by creating services like that makes acquiring music legally painless.

“I think the right answer is that there is nothing you can do to enforce prohibition in any area. The only solution is to make legal services so compelling that it is ludicrous to do it any other way,” Reid said.

"Any real music lover will appreciate Spotify: They can sample songs and taste different genres," he said. "They would never choose a cumbersome, download-one-song-after-another trench warfare approach over Spotify. It is a simple interface, click and play, with immediate access. That’s how you fight piracy.”

Reid’s first book, Year Zero, will be out this summer.

This story, "The $8 Billion iPod: Entrepreneur Rob Reid Ridicules Music Piracy Claims" was originally published by PCWorld.

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