Record Company Losses

Seen on Slashdot: here’s an interesting article from Michael Geist, a Canadian law professor looking at the claims made by the CRIA (like the RIAA but in Canada) that file sharing has caused profit losses for record companies and artists. Looking at the CRIA’s own numbers, he points out the claimed losses of 2 billion are actually more like 432 million total over the last 5 years. He suggests that these losses are not necessarily related to file-sharing – people are listening to music less, big outlets like Wal-Mart are carrying fewer titles, and the average price of a CD has dropped by 8%. The punchline is that this accounts for only about 2 million per year in royalties, which is more than offset by the private copying levy (a few cents from the sale of each blank CD are collected and distributed to artists to protect them against file sharing losses).

When you also consider how artists may actually benefit from file sharing, and I certainly do, it’s hard to figure out what all the fuss is about. As Lessig points out in Free Culture, not all file sharing is stealing. Some of it is unquestionably something else. Until we figure out what that something else is, it’s really a bad idea to make it illegal.

Also, please buy my CD.