There have been four very interesting pieces of news over the past few weeks that, although apparently unconnected, are anything but.
First, Apple’s third fiscal quarter sales were released earlier this week, showing that the company generated sales of US$4.485bn from the iTunes store, up 12% from 2013. A large chunk of this came from app sales and the like, but also illustrates well the strength of music download sales.
Second, Spotify announced just a couple of months ago that it had over 10 million paying subscribers.
Third, the BBC News website reported late last week that persistent internet pirates in the United Kingdom will soon begin receiving warning emails, mirroring actions taken in various other countries.
Finally, just a couple of weeks ago the United Kingdom music sales charts again began to mirror similar moves elsewhere by including YouTube streaming.
In combination, do these pieces of news signal that the much-vaunted multi-faceted strategy to defeat music piracy is beginning to take effect?
Let’s be clear - it is not as though piracy has been defeated - we have had theft as long as we have had “stuff”, and there is no evidence we are on the verge of a new dawn in morality. But as increasing numbers of people face legal action for piracy, pay for downloads and streaming rights, or otherwise watch music videos for free in return for accepting advertising - following the maxim that, unless you are paying for it, you are the product - could the piracy tide be about to turn?
The early research on internet piracy told us what we knew already. It tended to be committed by young males with good internet skills, questionable respect for the law, and low disposable income relative to the cost of music. At the dawn of the internet it was committed only by The Comic Book Guy from The Simpsons and the kid out of the 1983 movie War Games who nearly caused World War III just because he wanted to play tic-tac-toe online. Both were prime candidates to be pirates, as they were interested in pop culture, had no spare cash, knew how to use the internet to get what they wanted, and had little understanding of the impact of their actions.
Now a far greater portion of internet users are the type of person who simply doesn’t want, or doesn’t have the time, to get involved with the hassle associated with piracy. A middle-aged, middle-class married father of two small children like me could easily pirate music, but first I just think it’s unfair to the musicians, and second it’s simply far easier to give Apple my A$1.29 per track or do a one-off sign up for a Spotify account.
A research paper I published a few years ago shows that there are also more sophisticated psychological reasons to suspect that piracy may be about to slow.
The most important factor underlying the decision to pirate or purchase was a desire to keep up to date with what friends are doing. The more that one’s friends eschew piracy and instead pay for downloads or stream, so the more we do so ourselves, and a reduction in piracy gets a momentum all of its own. This is helped further by the increasing ease of access to legal music online, so that we can keep up to date without having to break the law.
A second factor in piracy and purchasing was a wish to control the music: as portable devices become increasingly commonplace (and iTunes, Spotify and YouTube provide easily navigable interfaces) so it is again easier to obtain the music we want when we want: there is less need to resort to piracy in order to get control over access to music.
A third interesting driver of music purchasing was a wish to experience the music repeatedly. Since YouTube and Spotify have now established business models that allow this for free, there is simply no need to resort to piracy just to be able to listen to the song again and again without paying any money.
To paraphrase Churchill, this is not the end of piracy or even the beginning of the end, but it might just be the end of the beginning.
As I’m writing, let’s also take a brief moment to mourn the imminent demise of the iPod. The Apple sales figures this week also showed that iPod sales were down to US$442m from US$733m a year ago. Like a famous prize fighter, I would prefer to remember the iPod slaying the opposition rather than scrapping with no-hopers in a dingy sports club, and so please Apple, do the decent thing when you announce the new iPhone in a few weeks and retire this gentle giant gracefully.