Benom Plumb, Assistant Professor of Music Industry Studies at the University of Colorado Denver, reviews the biggest stories of the week affecting music royalties. He is a music industry professional, not an attorney.
Benom’s Take: In light of ongoing revenue growth reports in the music business, this week’s news brings some sobering balance. The RIAA submitted its annual report of the worst music piracy websites to the United States Trade Representative and the report is very telling.
The most sobering part of the report says that “...the commercial value of music digital piracy in 2015 was $29 billion worldwide, and estimated that it could grow to $53 - $117 billion in 2022.”
With approximately 80% of U.S. record label revenue coming from digital sources, it’s clear online piracy remains an issue. The letter accompanying the report puts it in poignant terms: “The prosperity of the music industry is greatly undermined by what is essentially illegal trafficking in stolen goods - our sound recordings.”
So yes, while the music industry’s recovery is very real, we’re not quite out of the woods yet.
A common analogy for battling online piracy has been likened to a big game of “Whack-A-Mole.” As the report states, “...there are thousands of websites on the Internet that are dedicated to piracy, with new ones appearing all the time and existing ones frequently changing their online location…”
As soon as authorities identify and shut down one piracy site, others pop up in its place. It’s nearly impossible to catch every single one. The report doesn’t deny this fact, and states clearly that the focus of the report is on sites and services that inflict the most damage to the U.S. recording industry.
The report breaks down the piracy sites into several groups:
- Stream Ripping Sites (such as Mp3juices)
- MP3 Search and Download Sites (such as newalbumreleases.net)
- BitTorrent Indexing Sites (such as the infamous Pirate Bay)
- Cyberlockers (such as Rapidgator)
- Unlicensed pay for download sites (multiple sites primarily located in Russia)
- Third Party App Stores (such as DownloadAtoZ.com)
It also details the highly technical methods these sites use to avoid law enforcement and calls out specific nations as major contributors to the problem. Key among them are countries like Nigeria (with over 200 active piracy websites), as well as Russia and China in both the physical and digital markets.
I can personally attest to the trouble with getting royalties out of Russia and China. With music of any international popularity, royalty payees will see a steady flow of income from almost any developed nation around the world except for Russia and China.
Even though the Russian and Chinese economies are extremely important to the global financial order, they do not reciprocate music copyright governance as other nations do. For example, the US, UK, Canada, greater-Europe and Australia are all strong royalty producing nations with reciprocal royalty collection agreements.
But here we are 18 years after Napster and we’re still talking about losses due to online piracy.
And now for this week’s other headlines:
- Paid Streams On Spotify Pay 515% More Than YouTube (Hypebot)
- Spotify Reports Surging Revenue But Heavy Losses in First Half 2017 (Billboard)
- Kobalt Raises Another $14 Million in Funding (Music Business Worldwide)
- French Performing Rights Society SACEM Reaches Royalty Agreement with French TV Giant, Canal+ (Music Business Worldwide)