While the music and film industry complain piracy is hurting their business, a British report shows different numbers. The London School of Economics and Political Science published a document showing movie and music industry revenues have not declined as dramatically as the industry wants us to believe. Even worse, if the industry had adopted new technologies faster, the numbers could have been even more positive.
Revenues of entertainment companies combined have increased considerably from 1998 till the 2000s. While revenues stagnated the last couple of years, the only dramatic decline in revenue comes from CDs and vinyl. That’s hardly a surprise, it’s no secret that CDs and vinyl records have been replaced by MP3 downloads, streaming and other ways of distributing music digitally. This year the revenues of online music in the UK were higher than revenues of CD and vinyl sales combined.
Data also shows that these new music distribution channels are growth areas and the report suggests that if the industry had adopted these technologies earlier, the record companies could have witnessed the expected growth much earlier. Instead they held on too long on their old business model of distributing music on physical media.
The report also states that the gaming industry has done well in looking for new ways of generating revenue. The researchers applaud the gaming the industry for adapting new income streams like in-game advertising, in-app buying and micro purchases. Also the publishing industry shows how it’s done. While revenues of physical books decline, the revenues from e-books make up for it.
The researchers end the report with a recommendation, “We recommend a review of the DEA and related legislation that strikes a healthy balance among the interests of a range of stakeholders including those in the creative industries, Internet Service Providers and internet users.Fitting the digital sharing culture and new forms of cultural production into a copyright enforcement model that is out of touch with today’s online culture will only suppress innovation and dampen growth”.