We’ve previously documented how people moved from buying albums to buying singles. But there’s another big change that occurred, one that may have an even bigger impact on the music industry as a whole; YouTube and other ‘free’ music sources.

If we go back in time 5 or 6 years, people had only one option if they wanted to listen to their favorite artists online without paying for the pleasure. That one option was piracy. Today the public has a wide variety of legal options, and the medium of choice for most people appears to be YouTube.

Although true music aficionados are hard to please, the majority of the public appreciates the option of listening to their favorite tunes for free on YouTube. Google is not complaining either, as music videos are a substantial revenue source for them.

But what about the record labels, are they happy too? This is not an easy question to answer, but we’re going to give it a try.

Revenue wise YouTube and Vevo have be come a serious revenue source. The major labels haven’t been very open about their revenue sharing deal, but EMI Music chief financial officer Paul Kahn said (pdf) during the LimeWire trial that his label gets half a penny for each YouTube play.

Half a penny may not sound much, but with billions of views it adds up quickly.

If we look at David Guetta, one of EMI’s top artists, we see that his YouTube uploads were viewed 308,000,000 times over the past 12 months. That means $1,540,000 in revenue, for only one artist.

Just as a comparison, Guetta and EMI have to sell more than 2 million singles to earn that much from ‘paid’ music.

In their latest report music industry group IFPI write that at the end of last year the major record labels were getting 1.7 billion views a month, and this number is rising rapidly. In the last 12 months alone Universal Music tripled the number of YouTube views from 2.3 billion May last year to nearly 7 billion today.

Staggering numbers that bring in tens of millions of dollars at least, with free music.

In part YouTube’s success goes at the expense of music piracy. With free music on YouTube a large group of people have less incentive to pirate, and indeed, the number of people who share music on BitTorrent appears to be slowing because of these and other alternatives.

This doesn’t mean that music sharing BitTorrent communities are fading away, but the more casual downloaders have found an alternative in YouTube and other streaming services.

That’s great news for the labels right? Well not so fast.

All those billions of views on YouTube each month may have slowed piracy down, but if we have to follow the logic of the music industry then actual sales of recorded music would also be affected. After all, for years they’ve claimed that “free music” on pirate sites caused billions in losses. Free music on YouTube should have a similar effect.

The big question is of course whether the revenue from YouTube can match these alleged losses or not. Not an easy question to answer, but these are crucial factors that define how the major record labels will fare in the coming years, probably even more so than piracy.

TorrentFreak asked both the RIAA and BPI to share their thoughts on how YouTube could affect music sales, but both unfortunately withheld their comments.

This leaves us with the conclusion that, unlike many record label execs have argued in the past, you can compete with free. You can even compete with piracy. Whether the net result is going to be a positive one has yet to be seen, but YouTube is taking up a larger chunk of the record label revenues each year.

Source: Is YouTube Killing Music Piracy?

Considering the reputation of the SAS for using force and the years of training they undergo to make that response come naturally, it was refreshing this morning to hear McNab suggesting a rather different approach to problem solving, specifically the issue of piracy.

In an open letter, McNab details how piracy often stems from copies of books sent out to reviewers which are scanned and subsequently posted on file-sharing sites. He also notes, however, that these copies are often of poor quality and in the inconvenient PDF format, something which diminishes reader experience and enjoyment.

Despite these shortcomings, book publishers still spend a lot of effort trying to get these books taken down with DMCA notices and the like, but McNab says he prefers a different approach.

“Taking down illegal books from file sharing sites is only a short term fix and both a time-consuming and expensive business as we have already seen from the music industry. Maybe it is better for us to invest these resources in other ways, to stop consumers from migrating to pirate sites that are always going to exist anyway,” he writes.

Some book publishers feel that by not providing a digital version of their products, somehow they’re going to stop online piracy. McNab notes, correctly, that’s not the case and that publishers have the opportunity to do what pirates do, but better.

“Holding back on releasing a digital version of a book won’t stop it from being pirated. With so many of the illegal copies out there originating from printed proof copies that are then put up on sites, if consumers are going to read a digital copy, it’s better that they purchase them legitimately,” he notes.

But its not just the product itself, but the discovering and accessibility experience that McNab feels can be a leverage point for legitimate outlets to persuade, not force, would-be pirates into obtaining the real deal. Restrictive DRM and security, he suggests, are counter-productive.

“If you surround a digital book with too many security obstacles which makes it difficult to find, purchase and read, it will only force consumers to look elsewhere to get their book,” says McNab.

“It is also important to realise that digital books have a quality of content that can not be pirated. These include: immediacy, personalisation, accessibility, discoverability and authenticity. As an industry, we need to understand and use these distinct properties in the fight against piracy,” he says.

“In order to be successful, legal ebooks need to bring more value to the consumer than pirated ones and we can already see great progress in making this happen.”

All this from McNab without a single mention of a lawsuit, getting the law changed, arresting site owners, hijacking domains, disconnecting file-sharers and other similar negative-energy approaches to dealing with this complex issue.

In his previous role McNab was undoubtedly well-versed in sabotage techniques and asymmetric warfare scenarios. His training has served him well.

Source: Ex-SAS Soldier Avoids Conflict in Book Piracy Battle

While there are ultra-aggressive approaches – such as the pay-up-or-else schemes flooding Europe and the United States – occasionally individuals come up with more creative approach worthy of attention.

One such individual is manga creator Ken Akamatsu, who today announced that he will start an ambitious scheme to monetize illicit copies of out-of-print manga currently residing in huge volumes on file-sharing networks.

Akamatsu will launch the “Illegal Manga File Purification Project” tomorrow via his J-Comi site. While noting that all fans have obtained illicit out-of-print manga via file-sharing networks “at least once”, Akamatsu is offering to ‘purify’ these files so that the creators can be paid for their work and subsequent downloaders can do so legally. According to AnimeNewsNetwork, the scheme will work as follows.

Manga fans with illicit files on their hard drive will be asked to upload them (or links to them on file-sharing networks) to the J-Comi site. Whilst keeping uploader identities private, J-Comi will contact the original creators of the files and obtain permission to monetize the content.

Once they have agreement, J-Comi will bundle advertising into the manga releases and reintroduce them back onto file-sharing networks. For this service there will be no charge and the original creators will receive 100% of the advertising revenue.

If agreement with the creators cannot be reached “the files will be abandoned and the files will continue to drift through hell [file-sharing networks]. Perhaps forever…,” Akamatsu predicts.

While this attempt at returning some revenue to the creators of these files is to be applauded, Ken Akamatsu could find himself an extremely busy man indeed, and maybe one with a rather large headache. Nevertheless, we wish him good luck for trying something positive. It has to be better than the alternative.

Source: Distributor Offers To ‘Purify’ and Monetize Pirate Files

While there are ultra-aggressive approaches – such as the pay-up-or-else schemes flooding Europe and the United States – occasionally individuals come up with more creative approach worthy of attention.

One such individual is manga creator Ken Akamatsu, who today announced that he will start an ambitious scheme to monetize illicit copies of out-of-print manga currently residing in huge volumes on file-sharing networks.

Akamatsu will launch the “Illegal Manga File Purification Project” tomorrow via his J-Comi site. While noting that all fans have obtained illicit out-of-print manga via file-sharing networks “at least once”, Akamatsu is offering to ‘purify’ these files so that the creators can be paid for their work and subsequent downloaders can do so legally. According to AnimeNewsNetwork, the scheme will work as follows.

Manga fans with illicit files on their hard drive will be asked to upload them (or links to them on file-sharing networks) to the J-Comi site. Whilst keeping uploader identities private, J-Comi will contact the original creators of the files and obtain permission to monetize the content.

Once they have agreement, J-Comi will bundle advertising into the manga releases and reintroduce them back onto file-sharing networks. For this service there will be no charge and the original creators will receive 100% of the advertising revenue.

If agreement with the creators cannot be reached “the files will be abandoned and the files will continue to drift through hell [file-sharing networks]. Perhaps forever…,” Akamatsu predicts.

While this attempt at returning some revenue to the creators of these files is to be applauded, Ken Akamatsu could find himself an extremely busy man indeed, and maybe one with a rather large headache. Nevertheless, we wish him good luck for trying something positive. It has to be better than the alternative.

Source: Distributor Offers To ‘Purify’ and Monetize Pirate Files

In both cases the parties involved had secured the rights to use the material, but out of convenience they chose to use the services of ‘pirates’ instead. However, there are also plenty of cases where pirated copies are used without permission. To sell iMacs or Macbooks for instance.

Another example of these alternative uses of pirated media was spotted by a passenger of Saudi Airlines this week. The picture posted below this article was taken on a flight between Dubai and Riyadh last Monday by Twitter user @Alwagait.

At first everything seems normal, but those who look closely will notice something interesting. On the film’s cover we can read the following text – “Killers 2010 BDRiP AC3 XViD-ILOVE” – which is a direct reference to a pirated copy of the film that can be found on numerous torrent sites.

It is unclear whether any of the other films on board were also being provided from pirated sources.

Although there is little doubt that we’re dealing with a pirated copy of Killers, this doesn’t mean that Saudi Airlines doesn’t have a license to show the film. Sometimes it’s just more convenient to deal with non-DRMed files than the copies that are provided through official channels.

To quote Saudi Airlines’ company slogan: It’s the new era.

Source: Saudi Airlines Shows Pirated Film to Passengers

In both cases the parties involved had secured the rights to use the material, but out of convenience they chose to use the services of ‘pirates’ instead. However, there are also plenty of cases where pirated copies are used without permission. To sell iMacs or Macbooks for instance.

Another example of these alternative uses of pirated media was spotted by a passenger of Saudi Airlines this week. The picture posted below this article was taken on a flight between Dubai and Riyadh last Monday by Twitter user @Alwagait.

At first everything seems normal, but those who look closely will notice something interesting. On the film’s cover we can read the following text – “Killers 2010 BDRiP AC3 XViD-ILOVE” – which is a direct reference to a pirated copy of the film that can be found on numerous torrent sites.

It is unclear whether any of the other films on board were also being provided from pirated sources.

Although there is little doubt that we’re dealing with a pirated copy of Killers, this doesn’t mean that Saudi Airlines doesn’t have a license to show the film. Sometimes it’s just more convenient to deal with non-DRMed files than the copies that are provided through official channels.

To quote Saudi Airlines’ company slogan: It’s the new era.

Source: Saudi Airlines Shows Pirated Film to Passengers

“Pay what you want. If you bought these five games separately, it would cost around $80 but we’re letting you set the price! All of the games work great on Mac, Windows, and Linux. We didn’t want to leave anyone out,” the Wolfire team announced a week ago.

Not only can downloaders choose the amount they want to pay, they can also decide whether they want the money to go to the developers, charity or any combination of both. The minimum amount required to get a download link is a penny.

Thus far the project has been a great success. The games have been downloaded more than 80,000 times and have raised $683,090 at the time of writing. Linux users have been the most generous with an average donation of $14.01, while Windows users are stuck at $7.31.

Over the past days Wolfire has covered the results of the “Humble Indie Bundle” project in detail. Overall they have been very satisfied with the results, but they also found that there is still a high percentage of people who didn’t even want to pay a penny, and pirated the bundle instead.

Jeffrey Rosen, the co-founder of Wolfire Games, alerted us to this issue and reported his findings in a recent blog post. According to their analysis of the incoming donations and the amount of data that was transferred, some 25% of downloaders did not pay for the bundle.

If Wolfire Games were the RIAA, they would have quickly characterized this group as evil freeriders without any sense of ethics, but Rosen and his colleagues are more realistic in their analysis. Obviously money can’t be an incentive to pirate here, since the games can be legally owned for just a penny.

So what motivates people to download the bundle without paying then? What are the barriers that prevent people from coughing up a single penny?

Rosen mentions that the download links have been posted all over the Internet and that some people would rather click on those directly, than go through the entire payout process just to send over a penny. We could call this the laziness or convenience argument to pirate.

Another explanation is that the payment processors that are used are not available in every country, so some people couldn’t pay even if they wanted to. In a similar vein, but not mentioned by the Wolfire team, is that many people in the target audience are young and don’t have access to a credit card.

These two payment restrictions are related to availability, which is a common reason for people to pirate. Even if they want to buy something legally, they can’t because they don’t have access to a credit card or are in a country where they can’t use the required payment processors.

Other reasons for downloading without paying could be that one downloads the bundle from different computers after having paid, or that the download is shared with friends who made a joint donation. These should not be counted as ‘piracy’ either.

Lastly, there could also be a group of people that think that paying a penny is too much, choosing to grab a free copy instead just to be rebellious pirates. We don’t think that this group is very large, and even if it is significant we’re sure that money is not their incentive.

Rose said that they do not intend to add any restrictions to the download links because that would only make the download process more cumbersome for those who do donate generously. He does have a request for future ‘pirates’ though.

“If you are deadset on pirating the bundle, please consider downloading it from BitTorrent instead of using up our bandwidth! Also, even though you are pirating our games, please tell some of your friends about the Humble Indie Bundle.”

Article from: TorrentFreak.

Yesterday the music industry lobby group IFPI presented its 2009 figures, again putting the blame for decreased physical sales on file-sharers. Unfortunately, most mainstream media outlets simply reposted the IFPI press release and their flawed analysis. In general, no effort is made to actually balance out or check the message being sent out to millions of readers.

In their annual Digital Music Report, IFPI states that file-sharers are half as likely to buy physical CDs than the average music buyer. Although the report is about digital music, they carefully avoid saying anything about file-sharers and digital sales. That would actually show a completely different picture as we will explain below.

The music group made this statement based on an IFPI-commissioned study that was executed by Jupiter research. Although IFPI refused to share the entire research report with TorrentFreak, we can conclude the following from the two pages that were published online.

Compared to music buyers, music sharers (pirates) are…

* 31% more likely to buy single tracks online.
* 33% more likely to buy music albums online.
* 100% more likely to pay for music subscription services.
* 60% more likely to pay for music on mobile phone.

These figures (as reported by the music industry) clearly show that file-sharers buy more digital music than the average music buyer. In fact, the group that makes up the music buyers category actually includes the buying file-sharers, so the difference between music sharers and non-sharing music buyers would be even more pronounced.

How can this be true and why was there no mention of this in the Digital Music Report? They must be spending less on digital music then, right? But again, this is not the case at all. On average, file-sharers actually spend more than non-sharing music buyers. At least that’s what Mark Mulligan, Vice President and Research Director at Forrester Research who conducted the study for IFPI told us.

Mulligan has his hands tied and couldn’t say much about the findings without IFPI’s approval, but we managed to get confirmation that paying file-sharers are the music industry’s best customers. “A significant share of music buyers are file sharers also. These music buyers tend to be higher spending music buyers,” Mulligan told TorrentFreak.

So why do file-sharers download music without paying? According to the annual IFPI report, one of the main reasons people share music is because it’s free. This leads the music industry group to conclude that they are cheapskates and not willing to pay for music at all. But, as the above clearly shows, they are misinterpreting this finding, and we’d like to explain why.

In the digital age, people’s demand for music has changed significantly, but their budgets are still limited. The average file-sharer is currently spending $100 a year on music according to IFPI’s own research, not really a group that can be classified as freeloaders. However, their demand for music simply exceeds their budget and that’s where they start downloading music on file-sharing sites, because it’s free.

Just to be clear on our motivation to balance the ‘facts’ as reported by IFPI. We are not advocating that all music should be free and neither do most of the music lovers who share files online. However, the music industry continues to ignore that file-sharing is much more of a signal from the market that it is the increased demand for music that fuels piracy.

The solution to the problem is relatively easy. Start offering more unlimited and unrestricted music services and piracy will go into a free-fall. File-sharers are already paying for digital music, and they pay more than the average music consumer. File-sharing is simply a market signal showing that there is a need to compensate for the lack of high quality and affordable subscription services.

If anything, the music industry should have more respect for file-sharers, as they are their most valuable consumers. They are ahead of the curve and actually leading the way for the future of digital music, buying more digital music than anyone else. It’s the music industry that has to change, not the other way around.

Article from: TorrentFreak, check out our new blog at FreakBits.

Downloading music illegally, or watching a movie online without paying, was okay with a much smaller group, 18 and 13 percent respectively.

In fact, hiding your online porn viewing habits from your spouse is still more morally accepted than downloading a movie or music album without paying for it. Of the respondents, 18 percent thought that is was fine to secretly watch porn in a marriage.

At first sight the results of the survey are not really that surprising. Downloading music and movies without consent from the copyright holders is in violation of the local laws in New Zealand and watching porn obviously isn’t. Still, a closer look at the findings reveals some remarkable inconsistencies.

Firstly, most of the adult entertainment is actually viewed on sites that are dominated by copyright infringing content. So, many of the people who watch porn online are actually pirating as well, without realizing it.

Another remarkable finding was that people seem to be fine with copyright infringement if it’s on a video streaming site such as YouTube. Of all respondents, 31 percent said that it is morally acceptable to stream copyrighted TV-shows on YouTube, while only 13 percent believed that downloading copyrighted video was morally okay.

Thus, streaming copyrighted content is somehow perceived as more acceptable for some odd reason. The 5 percent difference between the moral acceptability of music and video downloading is another mystery that is left unexplained.

Overall, this survey shows how malleable peoples’ perceptions are when it comes to copyright issues online, with approval rates swaying back and forth between different types of media and the various distribution platforms.

Article from: TorrentFreak, check out our new blog at FreakBits.

The Delhi High Court decided to fine the software giant, after it found out that the cases the company had initiated in India’s capital were related to alleged copyright infringements that occurred in Bangalore, Hyderabad, Chandigarh and Mumbai.

According to the Court, Microsoft is needlessly abusing its unlimited cash flow as a power tool to financially hurt the defendants, who will have to travel all across the country in order to defend themselves. This abuse of “money power” to “harass” defendants is unacceptable according to the Court.

“When the constitution of India provides equality before law, this equality has to be all pervasive and cannot be allowed to be diluted because of money power or lobbying power,” Judge Dhingra commented on the case.

Aside from the harassment angle, the Court found that Microsoft chose Delhi because the High Court can order compensation up to $40,000 for the alleged crimes.

However, instead of taking on the case directly, the court chose to fine Microsoft $4,000 for each of the four defendants instead. If it turns out that the software piracy claims are unfounded, this money will go directly to the accused. In addition, Microsoft was ordered to pay a local commissioner who will investigate the piracy claims.

Although it was not illegal for Microsoft to file the four cases in the national capital where the company is headquartered, the Court found that something had to be done to prevent shear abuse of power by the software giant.

“On the strength of its money power it [Microsoft] has the added advantage of choosing a court of its own liking which is so far away from the defendant that it becomes problematic and a harassment for the defendant to contest the suit itself,” the Delhi High Court ruling read.

Article from: TorrentFreak, check out our new blog at FreakBits.