News

Like others interested in copyright policy issues, we noticed the new academic paper by professors at the London School of Economics. The biases and policy wish lists of the authors are abundantly clear, which we have no objection to, so long as they are properly noted. Much of the paper retreads familiar – and widely debunked – criticisms of copyright enforcement. Others have leveled various criticisms of the paper (see here, here, here and here for examples). 

One aspect that we found particularly frustrating, based upon initial review, is the basic misstatement and mischaracterization of the figures for music industry revenues presented in Figure 1 in the paper.

The most glaring issue is that the authors appear to double-count revenues to make them appear higher than they really are. The figure shows numbers for “Recorded Music” and “Publishing” separately, and adds them up to arrive at the total. But in the United States and many other countries, the Recorded Music figure already includes significant amounts of the publishing figure (such as for mechanical royalties that are paid for physical products and digital downloads). Based on the data sources listed, it does not appear that the authors took this into consideration, so they’re basically double counting large amounts of revenues.

So if we remove the inaccuracies from the data presented by this policy brief, what’s been really happening? In the U.S., according to Pollstar, total concert ticket revenues were just $1.8 billion in 2001, but more than doubled to $4.3 billion by 2012. Conversely, recorded music sales fell over the same period from $13.7 billion to $7.1 billion. Note the recorded music component includes all major forms of music sales including physical products, digital downloads, subscriptions, streaming revenues, ringtones, ringbacks, synch royalties, and internet radio royalties. Combining these revenue streams, total recorded and concert revenues in the U.S. were $15.5 billion in 2001, but $11.4 billion in 2012, a decline of 27%.

As we’ve stated often, we welcome additional perspective – data and research – to this important conversation, even if it may be a viewpoint we do not totally share. At the least, though, shouldn’t data be accurately characterized and understood?

Joshua P. Friedlander
Vice President, Strategic Data Analysis, RIAA