Record Labels = $4.5 Billion / Pirates = $0. Not True At All

Record Labels = $4.5 Billion / Pirates = $0. Not True At All

The debate of piracy can be a fairly complex topic. With numerous actors and issues involved, arguments can quite easily obscure the truth in favor of fallacies and simplifications.

This post is an editorial countering the weak arguments brought up in a pro-RIAA blog post.

A prime example of this can be seen at pro-RIAA blog The Trichordist. Filled to the brim with simple figures, no analysis, and avoidance of the real issues. This post at its base argues that while record labels may exploit musicians some of the time, those running file sharing sites exploit them all of the time. A fine argument, which at its most basic, in the words of the author, is “Any wrong doing should be unacceptable”. Both sides of the debate can agree that exploitation by record labels should be unacceptable, but where this author falls into a fallacy is his blanket assumption that all file sharing sites are inherently exploitative. We can just as easily say any wrong doing by pirate sites should be unacceptable.

It is debatable whether Kim Dotcom made his millions by this exploitation, but this is a discussion for another day. Regardless of the answer it does not lead to incrimination of other sites, as the trichordist seems to imply. Research shows that other, less controlled sites such as the Pirate Bay, has not made the millions that were claimed. As such, this shows that the majority of file sharing sites are not very exploitative at all, which explains why these industry leaders do not simply make their own pirate site if they are indeed so lucrative.

None the less, this crafted argument from the trichordist, focusing label and website, ignores one of the most important actors—the actual pirates. It is fine to have a friendly debate on the morality of file sharing, but until the Internet and individuals’ freedoms and rights are protected, legality is not a topic that can be skirted. Due to the decentralized nature of the Internet, “removing the bad actors”, as suggested by the author, inherently means destroying these freedoms and rights. The blog post in question conveniently leaves out this illiberal quality of its argument. Indeed, it leaves out the individual pirates all together, who are likely to be the least exploitative actor as they are commonly the best customers.

Now that we dug a little deeper into some of the ignored aspect of the debate, we can turn to the core defence of the blog—the value of record labels. Rather than examining social value, the author really only defends the value to the artist and seems to hope we assume this equates to a general good for society. Falkvinge offers a very interesting critique of artist payment here, but for our purposes we can accept that artist imbursement is a good thing. As the argument goes, record labels appears to be altruistically paying these artists, while providing a service to society, rather than viewing them as businesses between customers (those actually paying) and the producers. The service provided by the middle-man labels, as stated multiple times, is marketing and A&R (which cannot be equated with R&D).

As can be seen with the study that piracy helps small films, marketing is best viewed as being heavily relative, meaning the value lies in taking market share from alternative products. In the music case, the desire to work with a label is in their deep pockets for advertisement, which can divert revenue from other labels or even musicians lacking the same advertising support. While this creation of demand through commercials can be beneficial to the musicians it supports, it provides society with little else besides a corporate creation of cultural interest and a larger barrier to entry for the unsigned musicians. As argued in the study above, the Internet operates as word-of-mouth advertisement for artists without ad support. Additionally, The Pirate Bay even operates the “Promo Bay” with the very goal of supporting and advertising small artists (further diminishing the exploitation argument).

Finally, the argument is left with musician development and payment. Due to the relatively cheaper and more individualized nature of music recording (in comparison with film making, for example), it is a tough sell to argue that record labels are essential for the creation of new music—even more ridiculous than that piracy will be the end for new movies. We then land on the argument that the old model of record labels are required for the payment model to artists, as though the Internet provides no means for this. If record labels cannot adapt to today and prove to be an archaic model we do not owe them a restructuring of our modern environment just so they can survive. If they adapt and prove useful they will survive, otherwise we have less need for them today.

For the artists themselves, whether you support artist payment (like me) or do not see it quite so necessary (as Falkvinge) this needs to be solely a moral question. Unfortunately, with the criminal attacks on pirates, freedom, and privacy, Legality cannot currently be separated from this. The Internet empowered the consumers, who cannot longer be forced to pay for their cultural consumptions. New models are required as we adapt to our new situation. The good news is that it will likely cost less to support our artists without middle-men skimming off revenue.


Featured image: CC BY-NC-SA  darahgna