20 November 2009 — Illegal Downloaders Are (and Were) the Music Industry's Best Customers
I've contacted Demos to try to get a copy of their full survey, so I hope I'll be able to update this with some more interesting data in the future.
Update: You can now download the full report from their website here(download will start: it's the only permalink I could find)
It has often been suggested that the people who download music illegally still pay more for music than those who don't. This piece in The Independent - from a press release by Demos - seems to support this claim. However, as Helienne Lindvall notes at the Guardian, it's hard to say that the survey really proves anything at all. She goes into detail as to why the survey is somewhat suspect, so I won't linger on those issues. Assuming, however, that there is a kernel of truth in the Demos study, what are the implications?
The problem that I can see is that people tend to have a slightly odd perspective on this issue. When hearing that illegal downloaders spend more on music than others, people tend to take it as evidence that downloading isn't having the negative effects that record labels claim. After all, they're still making more money from illegal downloaders than they are from those who only purchase music legally. However, this isn't really a useful comparison. The real question is how much these people were paying for music before they started downloading it for free. It's likely that the people who download the most music are those who, ten years ago, would have been the music industry's biggest customers anyway, and that they would have been spending a lot more money in order to be. The fact that they remain the biggest buyers of music now is likely little comfort to record labels, who were used to seeing music lovers spend much more of their income on albums.
Of course, this could partly explain why live revenue has increased so much in recent years, as I dealt with in my previous post, from this piece in the Times Online. Perhaps the amount of money that fans spend on music is the same as it was ten years ago, but, because they download much of their music for free now, much more of that money goes to seeing live performances. If this is the case (and I can't find any data to support this hypothesis), this is probably good news for nearly all musicians. If a fan forgoes paying for your album, but uses that money to see your gig instead, you're better off.