Still not content with content

Every few weeks I join a panel discussion on Radio Live to talk about technology, social media and mobile apps. It’s fun, I get to meet some cool people and we discuss the issues of the day.

Last time I was on I caught the end of an interview with Damian Vaughan, head of Recorded Music NZ, the newly merged body that seeks to represent music creators in the New Zealand copyright space.

I don’t know Damian at all but he said something that intrigued me. He says people who download content won’t pay for it even when it becomes available online in the format they desire (it’s about 15 minutes in if you want to hear it directly).

I have to say that’s not my experience at all. I’ve bought more music since getting an iPhone than I have since I was a teenager. I hear a song, I use Shazam (possibly the finest piece of software I can think of) and 30 seconds later it’s being downloaded to my library. I pay, and I’m happy to do so because the process is simple and straightforward and the asking price is reasonable.

I can go one step further and just subscribe to a streaming service like Pandora or Spotify. I don’t, because I’m old fashioned enough to want to “own” that particular track. I carry the complete works of Shakespeare around on my iPad for much the same reason – there’s something almost tactile about having such things to hand.

My kids, however, are still absorbing new music like sponges so they’re all about the streaming services, and I would have been too if they were around when I was doing that kind of thing.

My point is, the consumer of content isn’t one type of person, it’s a whole range of people. It’s a bell curve – at one end are always going to be those who will steal online content. At the other end those that wouldn’t dare consider it no matter what. In between, however, is the mass market and if you can move those people away from piracy and towards paying for content then they will.

But you don’t have to take my word for it – there are actual stats to back this up.

Ofcom, the UK broadcasting and telecommunications regulator, commissioned a study into just this phenomenon and it turns out that people who pirate content are also the most engaged with the content and are more likely to buy content online.

The top 20% of infringers accounted for less than 2% of all users, but were responsible for almost 80% of all infringing. Yet they also on average spent more on content than the bottom 80% of users – £168 versus £105 – and much more than non-infringing customers who spent a measly£54 over the six month period covered.

This would support the theory that downloaders just want access to content and will pay for it where they can. It helps explain why a TV show like Game of Thrones can simultaneously be a raging success in terms of those that pay for it, but also the most pirated TV show of the year.

The music industry has found the solution to piracy – make your content available online without getting in the way of the customer too much. Remember when you had to buy an entire album just to get that one song?

The TV industry has yet to reach the same conclusion, and the rights issues in television are vastly more complex than in the music business, but ultimately it will have to go the same way. It’s too late to stuff that genie back in the bottle and if the music industry is anything to go by, you probably don’t want to anyway. You’ll make more money if you work with the pirates instead of trying to stop them.

3 replies
  1. Paul W
    Paul W says:

    I have bought lots of music online via iTunes however I still prefer CDs but the ones I want I can’t buy here so i get them from the US and have to pay the high cost of postage. Itunes catalog in NZ is no where as good as the US and Amazon still for some reason won’t sell kiwis their MP3 catalog but will happily sell a CD version.. Go figure..

    I see in the online media that Hulu now considers anyone who access their content, pays for it via a VPN is now considered a pirate.. Talk about shoot yourself in the head business model.. Guess those that had a Hulu account will now use that VPN to access the likes of The Piratebay for free.

  2. Alan Duval
    Alan Duval says:

    As a (now former) DJ, my biggest gripe was availability of promo mixes. I would regularly download pirated tracks, but I would almost as often buy these tracks when I found them, from legitimate sources (I own somewhere in the order of 4000 CDs). It’s the (I believe intentional) false scarcity that drove me mad. There’s no compelling reason to hold back a particular remix and only make it available to big name DJs… sure, as part of the hype-machine for the label’s hot new thing, but after that, release it.

    Many of my non-DJ friends bear out the OFCOM stats, the biggest downloaders/torrenters were/are the biggest buyers, concert-attenders, etc. They are the most engaged, and the most likely to be a mouthpiece for the product, too.

    • Paul Brislen
      Paul Brislen says:

      I wonder how much of a role the record labels themselves play in all this. In the last 40 years we’ve seen a tremendous consolidation in the industry and now new music releases are at an all-time low (so I’m told).

      Does that mean there’s less music out there? Probably not – I suspect it means I’ll never hear about 99% of it. But that’s where the internet comes in – suddenly those small no-name bands can access all the customers in the world. A niche sound that only attracts four listeners in New Zealand might not be worth much, but if you have that one in a million hit rate globally, it becomes more viable.

      Interesting times though – this has happened to newspapers, magazines and computer games and it’ll happen to TV and movies as well. Not the end, just a new road to drive on.

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