Two academics at the London School of Economics have published a notable work “Creative Destruction and Copyright Protection: Regulatory Responses to File-sharing.” Bart Cammaerts and Bingchun Meng, both lecturers, scrutinize the economics of file-sharing and music and argue that file-sharing is not the cause of the industry’s financial doldrums. Instead, they say the decline can be attributed to an overall decrease in consumer consumption of entertainment products, leisure activities and the way people consume their music. They offer ideas on how to stimulate music industry growth.
Their paper criticizes the Digital Economy Act (DEA) as cost ineffective and troublesome with many people believing it crosses the line in privacy terms, especially as it allows for tracking individuals’ IP addresses:
The DEA gets the balance between copyright enforcement and innovation wrong. The use of peer-to-peer technology should be encouraged to promote innovative applications. Focusing on efforts to suppress the use of technological advances and to protect out-of-date business models will stifle innovation in this industry.
Although statistics show a decade of dramatic declines of recorded music sales, the authors say there is no conclusive evidence file-sharing is the sole or even a central cause for this slide. These statistics also fail to note, they say, that, although recorded music sales are down, sums earned from live performances are increasing and finally surpassed revenue earned by recorded music:
In 2009 revenues from live music outperformed recorded music sales for the first time in the UK. While the recorded music industry was worth£1.36 billion, the value of the live music industry in 2009 was estimated at £1.54 billion.
The study says file-sharing poses problems but if it were not for consumers going online and listening to many different kinds of music, they never could get to hear many bands; file-sharing’s great reach, thus, has boosted live performances and their revenue.
The authors argue for consumer- and user-friendly alternatives for legal downloading and cal for the demise of the Draconian DEA measures. It mentions the recording industry’s legal crackdowns on consumer downloads, saying these fierce methods have failed.