A perfect exposition of the difficulty of adapting what’s inside executives’ and industry leaders’ heads in a period of change appeared in the FT this morning, in the form of a letter from BPI head Geoff Taylor responding to a somewhat downbeat piece on the futility of fighting piracy.
The figure 13% is a bit of a bloody disaster if you ask me – the fact that it is so low shows far greater success in holding back the electrification of the music industry than it does ‘substantial progress’. But this picaresque tour of the problems and concerns shows that the lobbyists either do not wish, or are not equipped, to deliver a nuanced and complex message which reflects the complexities of the world they are trying to change.
The fact that they are not willing to spend more than a few million per year to recapture the £200m claimed foregone revenue shows that either they do not believe the number themselves, or that they do not believe that enough of them believe it.
There is a strong case to be made on behalf of all the affected industries that incentives are misaligned to the point that public value in digital networks is being destroyed almost as fast as it is being created, but it won’t come out of something that relies, Chauncey Gardener-like, on hovering along a continuum between cab-driver common sense and a fundamentalist credo.
The letter is below, and online here.
UK record labels have refashioned their businesses
Published: July 27 2009 03:00 | Last updated: July 27 2009 03:00
From Mr Geoff Taylor.
Sir, The suggestion that “the music industry is no closer to solving the problems created by digital piracy” overlooks substantial recent progress made in the UK (“Pirates on parade”, Analysis, July 22).
UK record labels have refashioned their businesses to bring music to consumers online. Digital music services such as iTunes, Amazon mp3, WE7, Spotify and Comes With Music now contribute 13 per cent of overall revenues, and groundbreaking new offerings, led by internet service providers, are coming online.
The memorandum of understanding signed with the government last year saw ISPs publicly accept their responsibility to deal with online filesharing. The UK government explicitly committed to achieving a 70 to 80 per cent reduction in illegal downloading in two to three years, and the forthcoming digital economy bill will propose new duties on ISPs, enforced by Ofcom, to tackle illegal filesharing. It will also give Ofcom the power to impose stronger regulation if that is needed to solve the problem.
For the record, independent research for BPI by Jupiter shows that this year music labels will forgo £200m ($329m) in lost revenue due to illegal downloading. Between 2007 and 2012 the cumulative loss will be £1.25bn. These figures discount heavily for downloads that may not have been purchased, contrary to the assumption frequently levelled at the industry that we treat every illegal download as a lost sale. The jobs that are being lost as a result, and the threat to future investment in creativity, should be of concern to everyone in the media industry, including the FT.
Geoff Taylor,
Chief Executive,
BPI (British Recorded Music Industry), London SE1, UK