CRIA's Own Study Counters P2P Claims

This article is by Dr. Michael Geist, from his website, from March 17, 2006.



Dr. Michael Geist is the Canada Research Chair of Internet and E-commerce Law at the University of Ottawa. He has obtained a Bachelor of Laws (LL.B.) degree from Osgoode Hall Law School in Toronto, Master of Laws (LL.M.) degrees from Cambridge University in the UK and Columbia Law School in New York, and a Doctorate in Law (J.S.D.) from Columbia Law School.

While CRIA regularly trumpets commissioned studies as evidence for the problems posed by P2P, this week it released a major study without any fanfare whatsoever. Conducted by Pollara last month, the study serves as part of CRIA's submission to the CRTC's Commercial Radio Review. What makes this particular study interesting (aside from the fact that it finally includes full details on responses and the actual questions posed), is that much of the data challenges many familiar CRIA claims.

Particularly noteworthy findings in the 144 page study report (appendix one) include:

* The survey asked for the sources of music on people's computers. Among those who download music from P2P services, the top source of music was ripping copies of their own CDs (36.4%), followed by P2P downloads (32.6%), paid downloads (20.1%), shared music from friends (8.8%), downloads from artist sites (5.6%), and other sources (2.9%). In other words, even among those who download music from P2P services, the music acquired on those services account for only one-third of the music on their computers as store-bought CDs remain the single largest source of music for downloaders (page 53).
* For all the emphasis on the teenage downloaders, it is interesting that the 35 to 44 age group had the largest spread between CDs and P2P as the source of music. Among that demographic, 31 percent of their music comes from P2P services and 27 percent from ripping their own CDs (page 69).
* Consistent with many other studies, people who download music from P2P services frequently buy that same music. The study found that only 25% of respondents said they never bought music after listening to it as a P2P downloaded track. That obviously leaves nearly 75% as future purchasers, including 21% who have bought music ten times or more. Note that demographically, the lowest percentage of non-buyers actually belonged to the 13 to 17 year old demographic (page 70).
* The 13 to 17 year old demographic also happens to be the largest purchasing group of music, buying an average of 11.6 music CDs or DVDs in the past six months. Close behind are the 18 to 24 age group at 10.9 music CDs or DVDs. By comparison, the older demographics may not download much music but they don't buy much either. The 55 - 64 age group bought 4.2 music CDs or DVDs, while the 65 and up age group bought 2.8 music CDs or DVDs (page 92).
* As for music buying trends, the study also asked whether purchasing patterns had increased or decreased over the previous year. The data was inconclusive with 28% buying more, 35% buying less, and 37% saying they didn't know (page 93).
* More interestingly, the survey also asked why people bought less. Only 10% of respondents cited the availability of music downloads. Instead, people cited a long list of alternatives that have nothing to do with downloading including price (16%), nothing of interest (14%), lack of time (13%), collection is big enough (9%), don't buy (7%), listen to radio (7%), change in tastes (6%), no CD player (3%), have an MP3 player (2%), lack of opportunity to buy (2%), watch more tv (2%), age (1%), only buy what I like (1%). Simply put, P2P simply is not a major factor behind decisions to buy less music (page 95).

In summary, CRIA's own research now concludes that P2P downloading constitutes less than one-third of the music on downloaders' computers, that P2P users frequently try music on P2P services before they buy, that the largest P2P downloader demographic is also the largest music buying demographic, and that reduced purchasing has little to do with the availability of music on P2P services. I've argued many of these same things, but now you don't have to take my word for it; you can take it from the record labels themselves.

Update: Howard adds to the coverage of the Pollara report by noting the enormous difference in the response to the question about Canadian copyright law and international standards. CRIA reported that 72 percent of Canadians favoured meeting international standards in December, while two months later that number declined to 46 percent. As Howard notes, the difference highlights the lack of reliability of public surveys about complex legal treaties since most people have not taken the time to become fully informed about the issue. Of course, asking about copyright law and international standards increasingly means more than just WIPO as it may also include the dozens of exceptions contemplated by the Australian parliamentary committee, the mandatory DRM compatibility being considered in France, fair use provisions in the U.S., and the provisions being floated as part of an Access to Knowledge Treaty.

Update II: Pollara has responded to this posting and I've replied with a few comments.
Write Comment View Comments (21 Comments)
Comments

Why The CD Sales Fall Off - I think the study misses several things -

Many music downloaders are "packrat" collectors. I thought I was bad with 20Gb of stuff (including rips of my 500 CD's). Then I hear from a relative about his friend, a truly obsessive-compulsive, who has 250Gb of full albums he's downloaded.

I think part of the "drop off" in sales is explained the same as it is for me; I have spent 20 years replacing my vinyl, and buying the albums I wished I'd bought on vinyl. I'm done.

I refuse to pay $15 for that one song from the 60's I'd really like. I'm not buying online music because it will only play on 1 of my 3 MP3 players (yes, the iPod). I'm too lazy to 'burn and rip" to bypass DRM, and I find that DRM-stripping-from-iTunes software is not easily found. So, if I find something traded, I'll take it.

Oh,yeah - all that money I spent on CD's? It's going to DVDs now. I think I'm at 200 DVDs. Hmm, $20 for a 2-hour audiovisual treat, or $15 for a 3-minute audio treat.(Or $1 for a crippled 3-minute treat...) Some sellers have to get their price into perspective.

(Side note: what does this say for the HDTV market? I'm well satisfied with the quality of a DVD; unlike the contrast between vinyl and CD's, I have yet to be convinced the difference between DVD and HDTV discs -whichever wins - is worth the extra cost. Plus the DRM issue again - I'm told my early HDTV without digital input won't play full 1080i - so I'll be on the sidelines...)

But, I'm that demographic that has bouhgt the occasional CD the last year or so, after listening to the music on download... And part of that is a "moral imperative", a desire to use my wallet to express support for artists I like.

However, most of the crap that allegedly is "modern music"? No wonder nobody's buying it.

(Written by MD on 12:05:18 AM March 23rd 2006 )

Mr. Geist not saying much about Pollara - I notice there's no Geist post about Pollara's comments about how he selectively used research, took things out of context and creatively added some figures to support his conclusions. Why is that Michael? Don't you want an "open and honest" discourse? Of course not. That would expose you as the fraud you are.

(Written by Tired of this... on 06:44:57 PM March 21st 2006 )

For me its:
* size does matter. I can get a lot more music on a disc in MP3 format. In the car that means much less changing of discs.
* Toss out songs I don't like
* Rearrange songs, not just from one album or one artist, but into an order I like across all my music.
* Purchasing only music I like, right down to the song. No more "11 out of 12 songs stink" syndrome.
* Try before you buy; this includes quality of the recording, quality of the song, quality of the compression.
* Flexibility to play anywhere we want, and not being restricted to DRM versions, operating systems (brand and versioning), backward compatibility, nor the output devices.
* Security. No DRM on mp3's, plus we are protected from theft (only the copied mp3 disks would be stolen since the originals are locked away, and a homemade mp3 disk has little value to thieves)
* Simplicity. Mp3 just works, no fuss and no bother.

Our music in this house is all bought and paid for, about 90% of it is on CD originally but copied to mp3. The rest is online purchases, often directly from the artists site.

Until the record industry wants to cater to my needs, I don't plan to hand them a great deal of my money.

CRIA and RIAA labels are bypassed when we look for new music; we would rather support independent artists. We feel our money goes more directly to the artists, rather than to corporate corruption, obsolescent business models, large scale political lobbying, and an seemingly infinite legal fund. We just want our money to get to the artist, and we would really love to know where to buy to ensure they get their money.

Reduction of the middleman. Especially ones we simply don't respect. That would really make buying music more fun for us.

(Written by Trelly on 12:50:22 PM March 21st 2006 )

P2P - Let me first of all say that the music industries' troubles have to do with a few things. 1) Greed. Artists and companies make way too much money. 2) the music that it produces isn't all that good. Music is so formulaic and robotlike these days.

I P2P, bittorrent music, etc. Why? A few reasons. One, music is expensive. Two, music is not always made available online at high bitrates. Sorry, iTunes 128Kbps doesn't cut it. Three, and probably most importantly, I download music that I have already bought.

This has really gone unnoticed as an argument by most everyone. I treat my CDs like garbage. As a result, they get scratched up. What do I do to get them on my computer? Download new ones.

I also have CD's that have been stolen from me. Do I take the hit? No. Why would I if I can just download the music?

The ads that are on DVDs and movies that urge people not to download movies because you wouldn't steal a car (so why would you steal a movie) clearly goes against most people's reason. If car's could be replicated as easy as music...I think a lot of people would be willing to "steal" a car. Why wouldn't you? You could replace a car ad infinitum.

(Written by Jonathan on 02:17:15 AM March 21st 2006 )

CD is dead, long live MP3 - It's two things really that reduce my cd buying. Remember when walkmans came out, and you still were buying LPs, then had to record it to tape? Well the LP was basically dead, the converting is the sign that it's over. Well I don't buy cd's very much anymore, because I have to convert them, I have MP3s on the computer for music and that's what I listen to at my desk, an IPOD to take with me, and either the radio, or the IPOD plugged into the head unit in the car. So after a while I find if I don't rip my cd's I just don't listen to them. And even the disks I bought I don't like all the songs. With all the music backed up anyway I'll probably just have a garage sale for the cds

(Written by p2p guy on 11:56:01 AM March 20th 2006 )

P2P vs CD's - I p2p download, I'm mid 30s and yes I have bought cd's after having listed to a few p2p tracks. But I would say that having been burned so many times when I was younger buying an album with 1 or 2 good songs, and the rest were junk, I'm a lot more careful now.
If I listen and like MOST of the songs I buy the album. but really most of my p2p downloads are just one hit wonders. The music industry might get my buisness if they brough back the single.

(Written by Non reformed downloader on 11:52:27 AM March 20th 2006 )

Where are the real artists? - I keep finding good music by accident. It's the only way these days: the recording industry keeps trying to sell me Britney Spears' or Christina Aiguilera's breasts. I'm not buying. These days I'm really into Jim Guthrie (google him), and thanks to Brent Bambury, I'm starting to catch on to Antony and the Johnsons. Big Music won't touch the unpretty stuff with a pole. They'd rather blame the customer for being wrong.

(Written by WJM on 10:02:45 PM March 19th 2006 )

Thanks for pointing this out - It's nice to see something offsetting the usual fear-mongering.
My post:
Big Surprise

(Written by Eric E on 11:38:41 AM March 19th 2006 )

Dropping CD sales -

P2P isn't the problem - the problem is what the recording companies offer. While Christina Aguilera looks great in tight clothing, I can't stand her music. Same with most of the new "stars". Most current music has no substance.

Where are the real artists? People like Johnny Cash, Joan Baez, and Bob Dylan? Guess what - they aren't pretty enough to get a recording contact. But the music they recorded had bite.

Think of such classics as "The Sounds of Silence", "Sixteen Tons", or "One Tin Soldier". That sort of music isn't available from any of the major labels, and they are suffering because of it.

You can still here this sort of stuff - there are many folk artists producing amazing music, but from the record companies think it isn't marketable. One of the most haunting songs I ever heard is called "Voices". My wife (Heather Borean) wrote it one night - she doesn't know where the idea came from, and it scared her at the time - but it's a beautiful haunting song. Talis Kimberly's "Velvet" is another killer song. "Kerowyn's Ride" by Leslie Fish and Mercedes Lackey is another incredible song. All three have been recorded - but not by the mainstream recording companies.

And they won't be. None of the songwriters is "Hollywood" material. The recording companies are mistaking image for talent. Bob Dylan wasn't handsome. Joan Baez was average looking. Johnny Cash looked like a wreck. But man could they write (and sing). The current crop of artists looks good, but most of them don't have soul.


(Written by Wayne on 11:11:53 AM March 19th 2006 )

a new era.... - What is undeniable is that we have entered a new era in which access to information is at all new highs. The major labels demonstrate the inability of bloated, inefficient, cumbersome, and unimaginative corporations to understand when a revolution is staring them in the face. For a great example of their lagging, visit any of the artist websites that are created and run by the label. They are among the least creative and interesting pages out there. Since the 70's, these companies have been increasingly led and staffed by non-music people. I am glad to see a shake up in this department primarily because I know that the relationship between music and commerce is a relatively new and in my opinion, bizarre one. The mere notion that the RIAA could and would actually fine citizens for sharing information is inconceivable to me. I also love to watch millionaires like Metallica get up and act as if they really stand for something other than the almighty dollar. Hilarious.
When I was young, my parents would buy records based on one single on the radio. Sometimes that was the only song they ended up liking. I feel that the current situation of p2p serves as a market correction for the years of companies duping their customers, as they still try to do now with their fraudelent "customer reviews" on iTunes. Let it go back to being a singles business. People who know and love music will find what they like for themselves in this unparalleled age of information.

(Written by Art Hays on 11:06:51 AM March 19th 2006 )

In reply to A Tired Reader - I believe the study WAS commissioned by the music "business" and Michael's breaking it down for us has got THOUSANDS if not MILLIONS of people interested in it. You, Sir/Madam, smack of a sore losing industry insider and ARE the only uninterested person (interested enough to post though) around here.

(Written by An Interested Voter on 09:01:51 AM March 19th 2006 )

P2P VS Used CD stores - FIGHT! - Either buy music from CD stores, or download it from the interweb, both ways artists are not making money. If the recording industry made available samples of the music so people could listen to a entire album before they buy it, I would almost guess that sales would go back up. I personally have picked up a album from a new artist that is getting radio play, I liked the radio version of the song and thought "Well I'll pick up the album because I liked that one song a lot" only to be disappointed by the other tracks that are on it. If I had known about it a head of time I would have saved my money and got some other CD and have picked up that individual track somewhere, or maybe even just the single. Also, maybe the RI should consult the musicians with their work being "stolen" and find out what they think about it. Don't just poll the big bands, poll the small bands that only get distributed online or small independant record stores.

(Written by 1337 on 05:29:35 AM March 19th 2006 )

Musician - AWESOME! - Well first off, I as a musician would rather send out free MP3's to draw people into live shows. Generally musicians don't make money off of sales and usually get up front deals. Thus, downloading doesn't really hurt them, in fact the more they can get out (especially in underground music) the more people that will go to their show and potentially buy their merch! Now most if not all merch sales go directly to the bands. Also, if people like the music enough, if they can afford it they will buy it. The fact that the big bands that make millions already won't sell 1000 more albums really doesn't hurt them. It is the small independant artist that needs the distribution that most small labels can not afford to get the sales/interest.

Also to mention that Canadian law is much different then american law. Also, did you know that all writeable media has a tax built into it to help recover from these costs? How does the network administrator get compensated for the however much money spent to this for some other industry make up for it so he can back up his server? Even if people are burning CDr's and the like, money is still getting back into that industry, and generally the more music you have out there, the more people know who you are, the more people that will likely go to your show and buy some stuff.

(Written by Anonymous on 05:12:40 AM March 19th 2006 )

Careful on the numbers.. - That 33% vs. 36%, means that on average, people have a few more CD ripped MP3s than P2Pd ones. It doesn't mean that 36% only buy CDs, and 33% only download.

Actually, what it reads like, is people tend to have a mix of everything, and are willing to pay for something they like *enough*. That's the keyword.

(Written by Karmakin on 12:49:14 AM March 19th 2006 )

An Excellent Report - Since it is currently unknown what the new Canadian Government's approach to copyright will be due to a very successful musseling campaign by the PMO, this will report will be an excellent reference should DMCA-style ammendments are proposed.

It will also help should content producers get unrealistic in their demands for content-protection. I would like to see how this plays out, since the Liberal copyright law amendment attempts became dead in the water when they were brought down.

(Written by Andrew Fergusson on 09:01:36 PM March 18th 2006 )

more of the same - I don't understand the point in which you became an expert in the music business, Michael. Like any lawyer, you only bring up the points you feel support your very specific point of view. I thought you taught law, but apparently you are some sort of business expert on the music industry. This sort of smacks of a personal vendetta, and really has nothing to do with copyright law. This has grown very tired -- as has your incesant need to have your face and words in the media.

(Written by A tired reader on 06:37:42 PM March 18th 2006 )

re: knobtweakers - I don't know if I'd consider this as being heard from the CRIA, because they haven't been publicising the study. I couldn't even imagine th at being played out: "Big news, everyone, this new and better documented study contradicts what we've been saying all along!".

(Written by Simon80 on 02:59:12 PM March 18th 2006 )

Very interesting! - I never thought I'd hear that coming from an organization that represents the major labels.

(Written by knobtweakers on 11:30:47 AM March 18th 2006 )

Pushing towards a free approach? - Congrats, you have been slashdotted! :-)

I also added the link to my blog at http://icct.blogspot.com/ and drew some parallels to unrestricted content/service architectures, which I think would be strong on today's markets.

The music industry should move towards providing free content like is the norm in Internet. Instead of tapping into new markets generated online, the record industry has been just kicking and screaming about how they hurt their current business. Not that convicing in the way of business professionalism, but perhaps the record industry can gain a better assessment of its current situation as better research comes out?

(Written by Varis on 08:22:27 AM March 18th 2006 )

The summary is accurate - Julien says the statement that 75% represent future purchasers is flawed, "The 75% figure is just that: unnacounted for." Not so! Take a look at the full data. In fact, the exact question was "How often have you listened to a peer to peer downloaded track and then purchased the album or song..." This was only only posed to people who said they shared music via P2P, and the responses broke down as:

Never: 25%
Once or twice: 25%
More than twice but less than 10 times: 27%
10 times or more: 21%
Don't know/refused: 1%

They aren't unaccounted for at all. They are all people who claim to have purchased after listening to a P2P download. Nobody is claiming that 75% of the respondents were certain to purchase, but in the past, they have done that (up to rounding error).

(Written by Duncan Murdoch on 06:34:35 AM March 18th 2006 )

10% purchased fewer CDs explicitly because of P2P. However, only 33% of respondants (p. 68) used P2P to begin with. Therefore, it could be assumed that at the very least, 33% of P2P users reduced their purchases as a direct consequence of utilization of P2P.

As for the other 66%, it would be unfair to assume that they purchased more. One would have to explicitly ask that question to the users; as many either may not know themselves, or not see any rise in purchases.

In the same theme, the following statement:
"The study found that only 25% of respondents said they never bought music after listening to it as a P2P downloaded track. That obviously leaves nearly 75% as future purchasers, including 21% who have bought music ten times or more."

Is flawed. The 75% figure is just that: unnacounted for. Whether it be because music was actually bought or not is unknown. Now the reason we don't know the answer to this has to do with the fact that the study was seeking specific answers to begin with; it was designed with a specific agenda in mind.

Nevertheless, it would be inaccurate to say that that 75% represented future music purchasers. Don't get me wrong - I'm neither pro-Industry nor pro-P2P on this. I'm just pointing out the flaws in the counter-argument.

(Written by Julien on 11:49:39 PM March 17th 2006 )