Illegal music downloads - my 2 cents worth

Just suppose for a minute that this year everyone of the 111 million households in the US downloaded 9 albums worth of music tracks. That's about 1 billion albums, or around 10 billion tracks of music (at 11 tracks per album). Now lets suppose the music industry made $0.79 per track then that would be $8 billion in revenue for the music biz give or take per year.

But lets make a huge assumption - that no one paid for anyone of those tracks, yes that every single household got 9 albums of music, and didn't pay an penny for them. Sure, some households probably download hundreds of albums worth of music each year (thanks kids!), but then some, in fact I'll hazard a guess - most - download zero. I'll reckon that on average 9 or 10 albums per household per year is quite conservative, and with legitimate and relatively cheap (compared to store bought music) download technologies now available the number of illegal downloads is probably rapidly dwindling.

So, even with some pretty aggressive estimates of unpaid for music downloading the music biz is only loosing $8 billion a year and that's totally ignoring the effect of unpaid for downloads spawning actual music purchases and increasing revenue in other areas of the biz - like live concert attendance. In fact according to the IFPI Digital Music Report 2005 only 36% of downloaders buy less music because of it, and 10% actually buy more. In fact the IFPI report quotes Informa Media group as saying losses due to illegal downloads could be "as much as $2.1 billion" in 2004, far less than my estimate. Even globally they can only rack up a $6 billion decline in the music industry in the last five years.

Sure $2.1 billion, by the industry's own estimation, is a lot of money. But its not and obscene amount of money compared to say, the size of the economy. By all accounts you'd think that the world was going to end because of illegal downloads. Per person in the US it represents less than 2 cents per day of losses. Yes folks, if we all dug into our pockets and found just an extra 2 cents per day the music industry would have nothing to complain about. That's a mere 60 cents per month, less than the cost of the cheapest and nastiest cup of Joe per month.

In fact it turns out a whole lot of things in life have more or way more significant impact on society than that of illegal music downloads. How about credit card fraud? Also currently estimated at over $2 billion per year in the USA alone. Or what about all those mega-billion dollar corporate frauds? Or the tens of billions that offshore tax havens are costing the US tax payer or even the worlds poor and starving. Remember if corporations aren't paying their taxes then peoples taxes have to go up to compensate. In the 1940s corporations and people paid about equal amounts of the US annual taxes, now corporations pay about 13% and you, Joe and Jane Doe pay the rest.

Or getting away from corporations, how about losses to the US due to the economic effects of accidental deaths? There were over 97,000 in the US for 1998 with an estimated economic impact of over $200 billion per year. Holy smokes that's one hundred times the cost of music theft, how about we just reduce that rate by 1%? I mean automobiles kill over 40,000 people per year, if we could just reduce that figure by 2% we'd have more impact than stopping every single unpaid for music download. Think about it, if your 2 cents per day could save the lives of a thousand people next year, or let unpaid for music downloading continue as it is, which would you choose? I'm not saying the latter is good, just relative to the rest of the general suffering, nastiness and unpleasantness in society its certainly not public enemy number one. So the next time some industry pundit, or government stooge is saying "blah, blah, blah, its hurting the economy" please, just have some sense of proportion.