There’s often a healthy debate about the merits of various anti-piracy initiatives, particularly about their direct impact upon the legitimate marketplace. Whether it’s the PROTECT IP legislation pending in Congress, legal action against an unauthorized site that doesn’t compensate creators, or industry enforcement efforts, a frequent strand of skepticism arises from the relationship between those initiatives and a concrete growth in sales. Protecting rights is important, but do these efforts have a real impact upon the marketplace?
Recently we’ve seen concrete evidence that suggests the answer to that question is a resounding ‘yes.’
But first, a look at the numbers. So far this year we’ve seen a modest but encouraging uptick in sales. According to Nielsen SoundScan data featured at a recent NARM-sponsored webinar titled “Delving Deeper Into This Upswing: A Sales Trend Update,” total music sales on a track-equivalent basis (TEA) increased by 4.8 percent so far in 2011, compared to this time last year when total sales on a TEA-basis were down 0.7 percent. Digital track sales are up 11 percent and digital albums are showing an increase of more than 19 percent in 2011.
So what gives? Nielsen pointed specifically to the shutdown of LimeWire in the fourth quarter of 2010 that corresponded with the beginning of the uptick in digital sales. As Billboard recently noted in its coverage of the Nielsen webinar:
One factor behind the increase in track sales could be the shutting down of the LimeWire P2P service in late October of last year. The spike in sales was immediate, noticeable and lasting. From January to October 2010, the year-over-year change in track sales varied between a high of 3.6% in May and a low of -3.7% in April (there were three increases and seven decreases, all of them slight).
Then came the jump in track sales. November was up 17.2%. The gains were lower in December and January - 6.4% and 4.2%, respectively - but seasonal sales gain in December and January were probably masking the greater trend. The year-over-year gain shot right back up to 12.7% in February and has ranged from 11.2% and 13.9% ever since.
The evidence is beginning to pile up -- evidence that there is a specific migration of users from an illegal service to legitimate ones, which translates into more revenues for licensed services and more royalties for musicians, songwriters, producers, publishers, music labels – everyone in the chain of music creation. And it’s even more reason why important initiatives that strengthen the protection of intellectual property are essential, and can truly make a difference in the everyday lives of people who make music.
By Cara Duckworth Weiblinger, Vice President, Communications, RIAA