EU Study Calls Out Content Industry On Piracy Claims
By Wayne Rosso on Aug 18, 2009 with Comments 2
Last week a new study commissioned by the EU found that contrary to the content industry claims that piracy has devastated their business, consumer behavior has nothing to do with p2p networks and the rampant downloading of copyrighted material. In fact, many people claim that they still wouldn’t pay for content even if all of the free options were somehow taken away!
The European Commission’s new Digital Competitiveness Report is an expansive annual overview of the entire digital landscape in the EU. In a chapter devoted to online entertainment reveals many interesting facts, but the most shocking is that 20% of users would pay for online content if all the fee options were no longer available.
According to the report, “ …the low percentage of individuals that consider the possible lack of freely available online content as a reason for paying, calls into question the argument put forward by representatives of the content industry that European consumers will in the long term suffer from a lack of commercial availability of high quality content if the current model of audiovisual content distribution, based on illegal copying, is not curved.”
Apparently European users feel that once they pay for their internet connection they’re then entitled to download all the free content they like as there is an overabundance of it on the web. There’s so much free content that they are more than hesitant to put out any cash.
The report examines all types of online content business models but concludes that with a few exceptions (iTunes, Guitar Hero) most of them are not sustainable.
So now what? The report suggests that there just doesn’t seem to be a solution. At least not yet. But the question is will someone come up with a winning model before the content industry falls totally flat on its ass? The bigger problem will be if and when some guy comes up with that model, will the content industry buy into it? If the past is prelude, probably not.
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The music industry needs to get back to the basics… Where does music fit on Maslow’s hierarchy of needs? Not very high up the scale… But I think the real issue is that for years the music industry has devalued its back catalogue and discounted it to buggery while keeping the new material at a premium price. The reality is that the back catalogue is where the real value is and the new stuff is by and large marketing driven content rather than real art. Because the new stuff is of no inherent value to the mass you get the number 20% who will pay….
I remember when I was at a BMG conference in the 90′s Heinz Henn (who was an exec there at the time) said in order to sell more music BMG needed to sign better talent. I didn’t agree with Heinz much, but on that occasion he was right on the money! That is what the labels are missing…
Oh and by the way, the other part of the problem for them is that they really need to understand that they are now in the same position that the publishers were in when recorded music was first introduced. They have been disrupted. They need to shut up manufacturing and distributing and just become licensors. May have to give up the limos, but they would then have a very nice business…