The International Federation of Phonographic Industries (IFPI) is masterful at
presenting ambiguous data in a way that supports its reactive agenda. Taking the SoundScan study that was released a
couple of weeks ago (and deconstructed by me
here), the IFPI has added more data sources to
hammer home the message that authorized downloading
tripled, year-over-year, in the first half of 2005.
"At the same time research suggests there has been a clear shift of consumer attitudes in response to the
well-publicised legal actions against file-sharers in 11 countries. More than 1 in 3 file-sharers surveyed in the US
and the UK cites "fear of legal action" as the main reason for stopping illegal file-sharing."
But this does not address how many people have actually stopped file-sharing. In theory, it could be only
three people who stopped, one of whom was afraid of getting caught. The IFPI cites an NPD
study, which says in part: "...only 55 percent
of consumers who tried legal services came back for more in subsequent months. By comparison, 85 percent of
peer-to-peer (P2P) users engaged in repeat usage in 2004." So we see that P2P offers a more satisfying experience
in ways that are important to consumers. The industry might roll out the tired "can't compete with free" argument, but
what consumers probably want is better selection and files that work in all players.
NPD also presents a graph of authorized
downloading compared with P2P use, indicating that the former is growing while the latter remains steady. That makes
sense—the entire digital music arena is expanding. But it does not indicate that P2P is being vanquished in any way. To
the contrary, it appears evident that P2P has settled into its role as a permanent channel for music distribution. Like
every other entertainment channel in the world, it will thrive or wither depending on how it matches up against other
channels. Right now, P2P offers convenience and selection that, to many consumers, are worth the channel's drawbacks.
The music industry needs to offer something clearly better to nearly everyone if it hopes to starve P2P. People have
been saying this for years, but the industry still doesn't get it, and persists in claiming that authorized services
are perfect replacements of P2P.
John Kennedy, the CEO of IPFI who has a chronic case of foot-in-mouth disease, says: "Many still appear to be
gripped by a bad habit they are finding hard to break." No, Mr. Kennedy. They are making a choice.
