Is Piracy Killing the Music Industry? Not Likely

Here’s a classic question if there ever was one… is piracy killing the music industry? If you ask the music industry itself, then yes, of course it is. If you ask pretty much everyone else, the answer’s a resounding, “No!”. That includes me, because I think there’s a lot more at play than just piracy, although I’ll eagerly admit that piracy is a problem nonetheless.

A new post at TorrentFreak takes a look at the reasons that piracy isn’t killing the music industry, and includes a few facts to back it up. Overall, the site’s reason for revenue loss is the fact that there’s a continuing trend of people purchasing music via digital means, rather than in a hard format. At first glance, one or the other should yield the same profits, but there’s something else to consider.

When there was no such thing as a digital choice, we were left with a single option: purchase the CD. That meant about $15 on average for a CD, one that we were likely picking up because of a single song. I’ve made the same mistake. Back when Christina Aguilera released her first single, I liked it enough to pick up her album. I quickly regretted it, because no other track on the album was anything like her single, so I felt like I completely wasted my money (no offense to her music, most of it’s just not my taste).

That’s a common problem, and one that was relieved when the likes of iTunes came around. Rather than purchase an entire album, people had the option to purchase one or two tracks, for $0.99 a piece. That’s a major difference from spending $10 – $15 or even more all at once. Often, you may even see a #1 single on the chart when the album containing it is #2 or less.

This freedom is a good thing, for us at least. What is unfortunate is that many good songs are probably not being heard, because it’s so easy to not even bother listening through previews for the rest of the album. Even then, it’s basically impossible to get a grasp for an entire song based off of a 30 second clip. If the music industry wants to improve profits, it needs to forget about piracy and improve what’s now the biggest way to purchase music.

According to statistics taken from the RIAA shipment database, between 2004 and 2008 the number of single tracks sold in the U.S. increased by 669 percent while the number of album sales dropped 42 percent. Consequently, the income of the big labels suffered since single track sales are less profitable than full albums. As can be seen in the chart below, the number of music ‘units’ sold continues to grow rapidly nonetheless.