Digital Top Stories

IFPI calls EU report on piracy “flawed” and “deeply misleading”

By | Published on Friday 22 March 2013


No surprises here really, the International Federation Of The Phonographic Industry earlier this week issued a strong rebuttal of the previously reported piece of research by the European Commission’s Joint Research Centre which concluded that “digital music piracy does not displace legal music purchases in digital format”.

The JRC survey was based principally on so called ‘clickstream data’, monitoring how some 16,000 web-users in five EU countries consume web-based content. The report reckoned that most music illegally accessed online would simply not have been consumed had it not been available for free from unlicensed sources, so content acquired that way does not actually constitute a lost sale.

There has been a plethora of research over the years on the effects of internet piracy on music sales, some concluding a definite link between rising piracy and slumping recorded music revenues, others arguing file-sharing doesn’t negatively impact on the record industry.

The reality is probably something in between – clearly file-sharers would never have paid to buy the majority of the music they have downloaded for free had that not been an option, but the ready supply of free music from illegal sources online will likely result in some lost download sales, while also hindering all-you-can-eat streaming services.

The failure of the JRC research to even consider the impact of piracy on the burgeoning streaming music market is one of the IFPI’s biggest criticisms, claiming that the report’s much reported conclusion that piracy isn’t detrimental to the record industry is highly misleading as a result.

Commenting, IFPI boss Frances Moore told CMU: “The study contains significant flaws and is therefore misleading in its conclusions about the impact of piracy. In particular, it uses a methodology that does not accurately measure digital music purchases and, very importantly, it omits from its assessment the impact of piracy on subscription and streaming services. Most research confirms a very different picture, which is that piracy overall has a negative impact on the legitimate music business”.

The trade body also wheeled out Will Page, former PRS economics man, and now working for one of the key players in the streaming market, Spotify, who was even more critical of the JRC report. He told reporters: “The narrow definition of the market chosen by [this report’s] authors is both puzzling and deeply misleading. In particular, the omission of streaming services from the study fails to appreciate the diverse make-up of the digital marketplace. As a result, the unfair competition that legal streaming services face from music piracy is not properly acknowledged by the authors – and moreover, the report fails to observe how consumers can migrate from illegal services into legal venues like Spotify”.

Although the JRC report didn’t make any specific recommendations policy wise to the European Commission, some at labels and streaming services fear it provides ammunition for those who oppose new anti-piracy measures in Europe. You can read the IFPI’s rebuttal, and the trade body’s summary of other research that counters the JRC report, in this PDF.