pikine's Journal: Why Music Piracy May Have No Cure

Every once in a while, you see studies showing that P2P piracy hurts music sales, has no effect on music sales, or stimulates music sales, depending on who funded the research, and what interest they have to show in the result. But no matter what your point of view is, it looks like file-sharing piracy of music isn't going away.

One of the observations brought by Seth Godin in “All Marketers are Liars” is that people get their money's worth the moment they spend it. The woman who buys $20 collectible Christmas ornaments at Hallmark in July already gets her money's worth when she thinks about how nice it would look on her Christmas tree in December, how she could talk about it with her Christmas guests, how it can be passed down to her children, etc. Then she puts the ornaments in the attic for the rest of the year. Her money's worth comes not in the utility of Christmas ornaments, but in the gratification of these thoughts.

Furthermore, at Christmas, she tells her friends about the ornaments, and how they will be in store again next July (with new design). Then they could check it out together next July. This free advertisement for a product that is “remarkable” (can be remarked or talked about) completes the “fashion cycle.”

If you want to encourage people to buy music, you need to think about how the purchasing itself brings gratification. The first gratification comes at the moment you listen to music. How do you know there is a song you like that you want to buy? You already listened to it! The first gratification is had before the purchase.

The second gratification that could happen at the purchase is the thought how you can share it with your friends, and if they like the music, they may think you're a cooler person (I think we all agree that music taste defines a person). But the second gratification is “no purchase necessary”—file-sharing can achieve this too. This is fatal to music sales because, after the purchase, the sharing with friends will happen without sales. Your friends will listen to your songs and have the first gratification.

Since music (or any digital media in general) is an intangible good, the “fashion cycle” can and does happen while the distributor—record labels, or even if you're an artist—is completely cut off. This explains why, when Radiohead gave their songs away for free, it was still pirated more than purchased.

So people will continue to share their music illegally, and music piracy will go on, unless the record labels do something clever about it to get involved in the fashion cycle.