Pirating MP3's

[gn0me]

Do you pirate?

[Marack]

hidden option number 6:

I download music from widely popular and successful artists, for bands just starting out I make sure to go out and buy the CD to help them out. Also, I never download stuff from bands like Pink Floyd and Radiohead where continuity of the CD is very important (with my burner I get little blips in between tracks regardless if I have the spacing between songs set to 0).

[VelMonk]

I download the songs, and if it's someone I like, like Pearl Jam, I'll buy the CD out of loyalty. If I like one song and hate the band, I'll download the song and not buy the CD.

[Millie]

The record labels know precisely why they're losing money to MP3 piracy, and we consumers are not to blame. Nor are the developers of the Peer-To-Peer (P2P) file sharing programs. The fault lies squarely in the hands of the labels.

On that note, let's look at WHY downloading songs is such an attractive proposition for so many people.

First off, let me pose a question for you all: how often do you look to buy products at a 2000% mark-up from the cost of their production? That's what you're doing every time you buy an album on CD. All totalled (including recording fees and burning costs), CDs cost about $1 apiece to produce -- and that's a very liberal estimate. The actual cost is much lower, but we're using $1 to give ourselves a nice, rounded figure. Factor in publishing costs, which scale down as production scales up, and you notice that record labels face very negligible costs for manufacturing and distributing their CDs.

But from your experience, you'd never be able to tell. On average, you'll pay anywhere from $15 - $20 for a CD in a record store. Why? Because record companies know that you're willing to pay as much. There's no other reason; it's just an arbitrary market price, set to maximize profit. It's a fine economic formula, and one that has been grossing the music industry billions of dollars per year.

The problem, for them at least, is that consumers are wising up to their schemes. More and more people are refusing to spend $20 on a hastily produced album which, on average, contains maybe 1 or 2 decent tracks. Furthermore, CD prices have not declined in the recent economic downturn, while average disposable income has fallen dramatically. And with the advent of P2P programs online, consumers finally have a means of skirting the purchase of CDs altogether. All these things considered, why not pirate songs?

Technically, downloading MP3s is illegal. But is it "wrong," per se? In my opinion, it doesn't matter. Illegal or not, it's a fact of life that needs either to be addressed properly or accepted. Until prices are set more reasonably, and until more care is put into producing albums of superior quality, song piracy is inevitable. And it'll only get worse.

For my part, I'm going to continue to download the majority of my music. I'll still purchase albums from bands to which I am loyal, but I will limit my spending there.

It's the record companies that need to shape up here. They cannot continue to set an artificial market price on their product and expect it to sell at that price indefinitely. They learned this lesson the hard way with cassette tapes, and they're going to have to learn it again with CDs.

[Nimbik]

I'm all for p2p personally, and I think it's great that it's in place. Like the choice, I usually download to see if I like music, and if so I'll buy it. I do think music prices are a problem, but that means I just have to be more delacite with what I buy. What I don't like is when people will download an entire album, which they could easily buy at a store (no quams with people who download rare/live stuff). I think when people do that, they disrespect the artist, and even though record companies do make most of the money, artists still need some cash to exist (thats why pixies/sonic youth signed onto elektra/geffen). Also, personally I can't stand mix CDs that I make, usually because by the time I got the CD ready I'm sick of the songs I stuck on it.

[Evelys]

I always download an album that I think I might like. If I end up liking enough of the CD to justify the cost, as soon as I have the money to, I purchase it. If you enjoy the product, support the band that makes it and the label that promotes it. If not, don't.

But I'm tired of paying $18.99 for a CD in which I like a total of two songs, or having to pay $7.99 for a single that I can hear on the frickin radio anyways. So gtk-gnutella will always have a spot on my system.

[Tarissa DR]

I'm torn. I guess I've been the hedonist lately. I download anything that's good (I completed my Tom Waits collection this way) but I also purposefully bought a Porcupine Tree CD after someone burned for me it was so good. I'm inconsistent.

My love for music transcends my money atm. I wouldn't have any of this shit considering well uh I'm broke?

Ah the moral dilemma :|

Didn't vote because no option seemed to fit my incredible inconsistency ;p

[Camo]

I think Millie said it well.

Just to add a few things, though, I'm sick and tired of hearing the starving band argument. Most small bands would love the publicity of their music being widely spread for free just to get their sound out there to the masses. Ever notice how the only bands whining are the Metallica's that already make millions of dollars a year?

And what of this starving band theory? Someone in the know feel free to correct me, but doesn't the band only see about 10% of the profit generated from album sales? If their bands are so poor, and if the widely succesfull Metallicas of the recording industry REALLY want to help, perhaps they should address where the rest of that profit is going.

[Nimbik]

No, I agree it's a great way for unknown bands to put out some stuff. Will they ever get a record deal because of Kazaa? Maybe indirectly, but doubtfully. That being said, bands still do need CD sales to make money. Yes usually the best way for a band to make money is to go touring, but why would a band like Sonic Youth possibly sign with Geffen and risk losing their street credibility if they didn't need some cash? I'm not supporting the record industry though, they obviously overprice CDs and do bring it apon themselves. However, I still think you take away from an artist every time you burn a CD.

[Tarissa DR]

Originally posted by Camo
I think Millie said it well.

Just to add a few things, though, I'm sick and tired of hearing the starving band argument. Most small bands would love the publicity of their music being widely spread for free just to get their sound out there to the masses.

Well, I know that a lot of the bands I like don't make much money off CD sales, and don't even generate a profit off of trying to do a US tour. Would you still want to pirate their CD?

Justify all you want, but in the US if you don't sell 500k or 1m albums, you get a lot less respect than the big boy bands or girl band acts.

Hell, give some back to these guys (or girls), they put in a lot of work. How much can we justify to get free music, to make ourselves not feel guilty to ultimately *steal* because you realize, no matter how you feel, that is what you're doing?

-tari

[Prodigious]

96%+ of my CD's are bought, although lately i've been downloading and burning a few. the costs all add up and i'm low on cash this month, and it just feels so stupid paying $20 for a cd when i've spent hours downloading, burning and printing covers. but most stuff I buy though....like the new foo fighter's album, i downloaded it a few weeks before it came out to hear it, but instantly bought it the day it came out.

but when it comes to singles, one-hit-wonder bands, cd's with just a few good tracks or maybe greatest hits collections where i would have chosen otherwise, mp3 is the only way to go. why the feck ANYONE on this planet ever buys a single/maxi cd is beyond me

[Merauk]

Originally posted by Millie
First off, let me pose a question for you all: how often do you look to buy products at a 2000% mark-up from the cost of their production? That's what you're doing every time you buy an album on CD. All totalled (including recording fees and burning costs), CDs cost about $1 apiece to produce -- and that's a very liberal estimate. The actual cost is much lower, but we're using $1 to give ourselves a nice, rounded figure. Factor in publishing costs, which scale down as production scales up, and you notice that record labels face very negligible costs for manufacturing and distributing their CDs.

I disagree with your numbers. When you add in marketing, artist royalties, distribution, etc. the number is higher then $1. Most retail luxury products (designer clothing in particular) carry a high margin as well, does one suggest shoplifting their next Armani suit?

Even if the price of a CD was $5 people would still elect for MP3’s because free is better then $5. The issue isn’t entirely with the record companies/artists. The argument that price/profits makes it ok to steal doesn’t make it any less stealing the hot wiring a car.

PS For the record I have sure downloaded my share of MP3’s/Movies, then again I used to shoplift like a fiend when I was a kid so I am just a bad seed!

[Bristlebane]

Screw the MPAA! Heh.

I haven't bought a CD in two years. TWO Years.

I have around 30 or 40 burned CD's, though.

[Evelys]

I think you mean RIAA, Bristlebane.

[Millie]

Originally posted by Merauk_EOD
I disagree with your numbers. When you add in marketing, artist royalties, distribution, etc. the number is higher then $1. Most retail luxury products (designer clothing in particular) carry a high margin as well, does one suggest shoplifting their next Armani suit?

Even if the price of a CD was $5 people would still elect for MP3’s because free is better then $5. The issue isn’t entirely with the record companies/artists. The argument that price/profits makes it ok to steal doesn’t make it any less stealing the hot wiring a car.

PS For the record I have sure downloaded my share of MP3’s/Movies, then again I used to shoplift like a fiend when I was a kid so I am just a bad seed!

You make some valid points, and I agree that the cost of publishing CDs needs to take all those factors into account. However, you must realize that artists don't get royalties (record companies do) unless they have outlived their initial contracts. Most bands are signed to three-record deals which absolutely rape them, giving nearly 99% of the profits (and all royalties) to the label. Artists can earn royalty fees on their second contract (or if they're smart enough to renegotiate their first), but that's a rare occurrance.

Additionally, economies of scale come into play here. Because of the ease of producing CDs and the very nature of mass-production, CDs become relatively cheaper to print the more you print of them. Any costs beyond the initial, sunk costs of distribution and recording fees are negligible. So while the first few thousand CDs may be 'worth' $15 or so in retail, the next several hundred thousand to a million cost about $1 to make and sell.

Now does this fact 'justify' stealing? No. I'm not saying it does. But I am saying that it makes stealing all but unavoidable, as it gives people quite an incentive to steal. If you keep your product selling at an inflated price indefinitely, people are going to get tired of your pricing after awhile. It's inevitable. The cost of CDs should have decreased as the medium got older (as has the cost of casettes, VHS tapes, and now DVDs), but it never did. Something's up, obviously, and people are aware of it.

I'm not suggesting that stealing is 'right' or 'wrong,' but that record companies know what they must do if they want to reduce the rate of piracy. And yes, I believe that CDs sold closer to cost would be purchased with a lot greater frequency. If people were out there buying CDs again, then it wouldn't matter what they were downloading -- the effects of piracy on album sales would be next to nil.