In another great article from Canadian Professor Michael Geist, music interests groups see their magical numbers obliterated by probing deeper into facts and broadening up the scope of debate. While the scope of the article is mostly on Canada, the same arguments made against the CRIA are likely applicable to the RIAA.
… Amid the claims of industry losses, the industry failed to make the case that music downloading is significantly harmful to Canadian artists as even Jim Cuddy acknowledged that it was hard to determine whether music downloading has actually hurt his band. Careful examination of CRIA’s own numbers, along with industry data from Statistics Canada, suggests that the financial impact of music downloading on Canadian artists is greatly exaggerated.
The actual financial impact of music downloading has long been difficult to ascertain. In August 2003, CRIA issued a news release claiming $250 million in losses over the previous three years. Three months later, another release claimed $425 million in losses. Several weeks ago, CRIA general counsel Richard Pfohl told a university audience the figure was actually $450 million per year since 1999, totaling roughly $2 billion over the past five years.
The guesswork surrounding record sales is unnecessary since CRIA posts its members’ monthly record sales data directly on its Web site. According to CRIA, Canadian CD sales in 1999 generated almost $700 million. That figure declined annually, to $690.3 million (2000), $645.8 million (2001), $609.5 million (2002), and $559.7 million (2003). Using CRIA’s own numbers and 1999 as a benchmark, the cumulative decline in CD sales revenue in Canada is $294 million. Given that total CD sales revenues during the period totaled $3.2 billion, the percentage decline is a relatively modest 9 per cent.
While a $294 million decline may still hurt, the source of that decline must also be examined. The uncertainty associated with the financial impact of file sharing arises since the losses tied to file sharing are only those that displace a potential sale, not all downloads. Moreover, those losses must be offset against downloads that involve sampling before purchasing, downloads of music that is no longer for sale, downloads of music that is in the public domain or available with the express permission of the copyright holder, and downloads that are compensated in Canada through the private copying levy.
Numbers don’t crunch against downloading (reg. required)
