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Monday, Nov 23, 2009
Last November and December, surveyors at the Pew Internet and American Life Project called 1,358 Internet users across the nation and asked them a simple question: "Do you download music?" In March, when the Pew project had previously asked people about their music habits online, 29 percent -- representing about 35 million Americans -- admitted downloading songs from the Internet. But this time, after the splash of the recording industry lawsuits, only 14 percent said they downloaded songs, and many of those who still used the trading services said they were being more careful. The Pew study was combined with a report from comScore Media Metrix, a market research firm that measures online activity by monitoring the computers of a representative group of Internet users (it works much like the Nielsen TV ratings system). According to comScore, many people have recently quit using some of the most popular peer-to-peer file traders -- between November 2002 and November 2003, for instance, comScore showed Kazaa's user base falling by 15 percent.
The news that almost 18 million file traders had scurried away from peer-to-peer services certainly appeared to vindicate the recording industry's legal effort, and the Pew study made headlines at the start of the new year. The RIAA, which has cited a few other surveys that indicate similar declines in file-trading activity, hailed the report. "Our goal is to create a legitimate marketplace," Glazier says. "This is another encouraging indication that we're on the right track."
But the Pew numbers were immediately criticized by other groups. Because the results were based on a telephone survey, critics of the recording industry suggested that many respondents had simply lied to the surveyors. In a self-reported survey, "It is notoriously difficult to get accurate information about illicit or illegal behavior or behavior that's perceived as having a stigma," says Eric Garland, the CEO of BigChampagne, a firm that measures trading activity on peer-to-peer services. Isn't it reasonable to guess that some -- or possibly many -- of the people in the survey denied trading songs online because they feared getting in trouble? File sharing, after all, thrives on a perception of anonymity; if you were a savvy Internet user, would you tell a stranger that you enjoyed using Kazaa?
While he made clear he stood by the results, Lee Rainie, the director of the Pew survey, acknowledged possible flaws in his method. "Do people lie to pollsters?" he asked. "Absolutely. Do they say they're going to vote for one guy and then vote for the other guy? Yes. I'm not a thousand percent confident that we have the exact numbers here, but I know we've got the trend right -- this is more than a trivial moment in the life of the online world. There are fewer people doing something online in significant numbers." The trend is confirmed by numbers from Nielsen//NetRatings, an online traffic monitoring firm, which indicate that traffic on file-sharing networks has fallen by about 60 percent since last spring.
But Eric Garland even disputed the idea that there was a downward trend in peer-to-peer traffic. "If you look at file sharing as a global phenomenon, from the earliest days it looks like a gradual snowball," he says. "It is generally true to say that it is always more popular today than it was yesterday" -- and that's still true. BigChampagne measures peer-to-peer usage by logging into the trading networks and counting the number of simultaneous users; the recording industry considers its numbers so reliable that many labels have contracted with the firm to determine which songs are popular online. According to BigChampagne, on the FastTrack trading network (the largest peer-to-peer system, it includes Kazaa) the peak number of simultaneous users in December 2003 was 4,819,203; on the second-place eDonkey network, the peak was 1,801,023 users. Those numbers are substantially higher than usage in December 2002: then, the peak usage for FastTrack reached 3,746,961, and 668,000 for eDonkey. Garland said that in December of 2003, just under 60 percent of file traders were in the United States, and that number has not been falling in recent months.
The recording industry, for its part, says that peer-to-peer traffic is just one of the many statistics it's looking at as a barometer of its legal strategy. The industry does want to reduce file sharing, but it also wants to increase the use of legitimate services, and it wants to raise its revenues. And when industry players look at all three of those measurements, they are encouraged.
"We can tell by the growth of the legitimate marketplace," says Mitch Glazier. "I think iTunes just announced they have their 30 millionth download, Napster has announced a deal with McDonald's, there are new deals being announced all the time. Wal-Mart just launched, Microsoft has announced -- it goes on and on and on. If you look at the legitimate marketplace now, it's astounding the growth that we're at."
Glazier is certain that the lawsuits are at least part of the reason for consumers' apparent willingness to purchase music from services like iTunes. "What is the motivating factor? For many it was just the convenience of the new alternatives. For some it was, 'I don't want to pay anything' -- and then deterrence is the only way. You must actually pay for it."
But to hear critics of the RIAA tell it, even the success of iTunes isn't really that astounding. "If you believe the Pew folks, 18 million people stopped downloading in the last few months," says von Lohmann. "Where did they go? They're sure not using iTunes." Eric Garland echoes that thought. "There are 20 million people in a given month who are using file-sharing services," he notes. "There are in total billions of files acquired on file-sharing services every month. Compare that with iTunes' stated ambition of getting 100 million songs in a year. It's so slight it's a fraction of a percent. It's like saying Apple is going to save the music business because they'll allow people to get 999 files and pay for one." Garland says that if iTunes sold "10 billion songs this year it might be neck and neck with file sharing. And for the Apple iTunes store to marginalize file sharing the way file sharing has marginalized CDs, Apple has to sell trillions of songs. File sharing is a powerful force."
It also seems likely that in 2004, the RIAA's effectiveness against the file-trading masses may diminish. On Dec. 19, the U.S. Court of Appeals for the D.C. Circuit handed the recording industry a stinging defeat by ruling that ISPs can refuse to identify customers suspected of trading songs online. Instead of applying for an automatic subpoena to identify suspected thieves -- as the RIAA did for the hundreds of lawsuits it filed so far -- the industry must now present its case to a judge anytime it intends to sue a file trader.
The RIAA maintains that the new requirement won't be a significant hurdle; more lawsuits, it promises, are on the way. But each suit it files will now be at least a bit more complicated, and it's not unreasonable to expect that the RIAA will file fewer of them -- and that it will therefore deter fewer file traders. The lawsuits will probably also do little to confound the hundreds of engineers around the world who are currently working on more sophisticated peer-to-peer services or, perhaps, some whole new technology that disrupts the music business' status quo.
