The Hunt for Billy Joel and GAME-ON-DUDE

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OR

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Why the Music Industry is Losing Money…..

 

Whilst researching statistics for an article I am doing, I came across a little historical gem.

 

The first CD ever issued back in 1982 was “<?xml:namespace prefix = st1 ns = “urn:schemas-microsoft-com:office:smarttags” />52nd Street” by Billy Joel.

 

I looked it up on Wikipedia

United States The Billboard Pop Albums 1[3] 76 7x Platinum[4] 7,000,000+

 

Which is not bad if you consider the USA population. In other words

 

Percent             Sales              Population

2%

7,000,000

330000000

 

Or one in forty-seven people have a copy of the album in the USA.

 

There was a link on Wikipedia ^ The RS 500 Greatest Albums of All Time : Rolling Stone which took me to the Rolling Stones page.

 

352 on the Rolling Stones Magazine list of Greatest Albums of all time.

. 52nd Street, Billy Joel

 

and, I could listen now.

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But only if I was in the USA.

 

But wait, there were other options available on the Rolling Stone page.

 

Buy RS cover reprints!
Download the cd!
Buy the album at Rhino.com

 

I clicked on Download the CD.

 

 

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I clicked on the “Listen to Radio” button and was taken to the European site of http://europe.real.com/music/

 

Where my original search request had been dropped. I typed in 52nd Street again….

 

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52ndresult.gif

 

 

Which of course was not what I was looking for.

 

I had lost the Rolling Stone page by this time. So I thought I would try Last.fm

 

Curiously, Last.fm would let me listen to Billy. Facilitated by becoming a member. In other words, there was no option to remain anonymous.

 

It’s a shame that the efforts of the industry at legitimizing music downloads don’t appear to extend beyond the borders of one or two countries.

 

i.e.: In a perfect world, where a supplier is interested in engaging with me, the consumer, rather than being fobbed off with the:

 

“For music and entertainment services available in your country, please click here……

 

Which, by the way took me to the same place that thought “52nd street” equaled everyone BUT Billy Joel.

 

If American programmers can’t yet work GEO IP location databases to find out where an AU APNIC registered IP address originated from, then the music biz is in real trouble.

 

Hint Rhapsody and Real…. Please see the Resources section below for free GEO-IP software and if you would like Aussies as customers maybe you could link them to a service that knows that the worlds first CD was 52nd Street by Billy Joel.

 

Alternatively and until you do, users are probably still going to use the convenient, no hassles, works every time option…..

 

Emule doesn’t require me to be any particular country, nor does it require that I offer up my user details for statistical analysis.

 

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On Emule there were 45 instances (file versions) with 54 people offering to share their copy with me.

 

Had I elected to download the track, I could have been listening to it within seconds, hassle free and still anonymous.

 

There-in lies the principal challenge for the industry.

 

How to replace the convenience and accumulated habits of consumers with revenue earning alternatives.

 

We are impressed with many of the digital available alternatives.

 

So I have but one question…. Why couldn’t I listen to Billy Joel via the Internet anonymously?

 

 

 

SneakPeak. (OK it’s the Perceptric version of a Trailer……..)

 

For all those wondering what I have been up to for the last ten days with nary a blog post or a how’s your doody…..

 

It’s been an interesting start to the year.

 

Two reports came out in the last couple of weeks.

 

The IFPI Digital Music Report 2010

 

Music How, When, Where

You Want It – But Not

Without Addressing Piracy

 

and the independent report that emanated from Tera Consultants.

 

Building a Digital Economy : The Importance of Saving Jobs in the EU’s Creative Industries

 

For some time we have been saying that the downturn in sales [if any] has more to do with format change (Compact Disc to Digital) and the industry’s slow response to consumer demand than P2P.

 

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Although we have found that there are positive indications of file sharing damaging catalogue sales, we are unable to come to the same conclusion on new releases.

 

Whilst perusing the Terra report, found some criticism of the Oberholzer-Gee & Strumpf  2007 paper

 

– Most studies conclude that the impact is negative

and significant (even if, in some cases as

Oberholzer-Gee and Strumpf (2007)133, the effect is

supposed to be negligible)

 

133The results of Oberholzer-Gee and Strumpf (2007) were contradicted by Blackburn (2007) and

Leibowitz (2007).

 

A similar comment in the IFPI 2010 Digital Music Report;

 

“There is one study (Oberholzer and Strumpf, 2004) that claims to find a zero impact but it

has been frequently discredited. All the other studies find some degree of negative

relationship between file-sharing and sales of sound recordings.”

 

again in the Recording Industry In Numbers 2009 report;

 

A well-publicised study by Oberholzer and Strumpf (2004) found

no link between the fall in music sales and illegal downloading.

This study was reviewed by Liebowitz who concluded that “it

is probably something of an understatement to say that [their]

results did not hold up well under this re-examination” (How

Reliable is the Oberholzer and Strumpf Paper On File-Sharing?).

 

 

Being a curious chap, I read the Leibowitz commentary and let Google do the walking…..

 

Here are the concerns I have put to Professors Oberholzer and Strumpf.

 

Secondary Issues: Your Instruments

 

In Table 11 your instruments are different for each album. In Table 12, your instruments only have 17 observations, one for each week. That doesn’t seem like much information on which to explain the downloading behavior toward 670 albums. I am particularly concerned about the German school holiday variable. To start, I am surprised that the coefficient was even positive. I looked at German school holidays and I see that there are usually 12 days in October plus the typical Christmas holiday. Yet according to Table 3, October is when downloads were lowest. Is there something else going on here? Would you mind providing data on the number of German kids on vacation for each of your 17 weeks? (What a ridiculous question from a learned academic – I did not know that sarcasm was an approved method of querying statistical results or analysis.)

 

There appears to be more going on here than meets the eye….. I always thought that academics earned their spurs by being dispassionate and independent.

 

How important are the files of German school children to American downloaders? We really do not know. You only provide data on the total files of Germans used by Americans. 

 

That’s interesting, because although I am familiar with the work of Oberholzer-Gee and Strumpf and don’t exactly agree with all their findings, this was one area of research that I had conducted extensive samplings over – i.e.: increases and decreases in file sharing based on school holidays, work start times and work end times and our data correlated the small sample numbers of the Oberholzer-Gee and Strumpf analysis.

 

This was obviously a velvet gloves off (game-on) situation, where analytical economic theory fails against actual raw data collection.

 

Many of our readers are aware that we set-up and ran for six months (April-September 2009) an ed2k server (non-indexing) to collect search request data from Australian IP numbers.

We restricted the access numbers to 1000 users but still amassed 6 GB per day of search request data.

 

In part to assess the damage or lack of, that file sharing was causing to media creators and in part to confirm the Ipoque data that users were no longer as interested in downloading music files.

 

With the server located initially in Melbourne for the first few months and then Sydney, we discovered that it was still a target of attempted (futile, because it didn’t index users files) server use by international IP numbers (even though it had an overseas latency figure of over 1400 ms).

 

The Kademlia XOR next available bucket does not respect RIPE allocation of IP numbers.

We briefly discussed the Kademlia Protocol in P2P with a Condom. (A blog article and not a formal research paper).

 

However the relevance of the German school kids files to Americans would be in the time differences between the two continents and the habits of user in keeping their computers on all night.

 

If on holidays, obviously, German kids computers are not being left on at night and not making available (average 800 files each) for the download of American kids.

 

This unfortunately is a serious flaw in the understanding of Leibowitz.

 

I wondered if a learned academic can make such an obvious mistake in the analysis of other academics data studies, was it time to speak up about the results of our own empirical data set?

 

Australia is an island without the luxury of gigabyte speed unmetered intercontinental connections. Each megabyte costs someone somewhere (our data says that it is usually the employer that pays) about $0.10 cents. Therefore, as a semi-isolated ed2k enclave, Australia is particularly useful as a reference analysis of XOR propagation.

 

Not-withstanding my above comments, we have noticed a very similar effect related to a children’s television program called Hi-5.

We covered this (briefly) in an article last year, Australians Digital Economy Request For Comments Q.23

 

Google discovered a new Oberholzer-Gee & Strumpf paper, from 2009, and I quote there-from;

 

While the majority of papers reports some sales displacement, the four studies using actual measures of file sharing (Tanaka, 2004; Bhattacharjee et al., 2007; Oberholzer-Gee and Strumpf, 2007; Smith and Telang, 2008) find that file sharing is unrelated to changes in sales.

 

 

What I found most interesting is that everyone ignored the official Netherlands paper,

 

Economic and cultural effects of file sharing onmusic, film and games (TNO)

 

Which is the only paper apart from a Canadian paper, (referenced) to have brought up the positive cultural aspects of file sharing.

 

The research shows that the economic implications of file sharing for welfare in the

Netherlands are strongly positive in the short and long terms. File sharing provides

consumers with access to a broad range of cultural products, which typically raises

welfare. Conversely, the practice is believed to result in a decline in sales of CDs,

DVDs and games.

 

Therein lies the Dilemma for the European Union (and every country outside the USA).

 

Cultural enhancements for the community or blind allegiance to corporatism.

 

At Perceptric we believe there needs to be a balance, ensuring cultural diversity, the welfare of the citizenry and that new content can continue to be created.

 

So, for the last ten days readers, I have been refreshing the recent material on file sharing including the Leibowitz evidence in the Joel Tannenbaum case.

 

Based on what I have read, it is time to revisit seriously the partially completed analysis of Australian file sharing that I carried out last year and rebut some statements that I consider erroneous and misleading.

 

We thought we would look at actual sales data to ascertain the impacts of file sharing.

 

Sales figures by Numbers of Sales, Record Albums, 1991 – 2009, No 1 Albums by Week (USA).

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Source: BillBoard Charts, Neilsen Soundscan

 

Positive growth (however miniscule) over the whole period. Then again, what happens if we just look at the file sharing years?

 

Sales figures by Numbers of Sales , Record Albums, 1998 – 2009, No 1 Albums by year (USA).

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Source: Neilsen Soundscan.

 

Yes, it looks grim for the file sharing community (or someone).

 

And that was before we allowed a factor for population growth numbers…..

 

We leave you with just one more little graph…. Call it thinking music……

 

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More later in the week.

 

 

Resources:

 

http://software77.net/geo-ip/

 

Reference:

 

A Great Invention a 100 years on.

http://www.sony.net/Fun/SH/1-20/h5.html

 

 

 

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