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IFPI Calls Out The Wrong Country

The IFPI, the global RIAA, this week released its annual Recording Industry in Numbers report that tracks global record sales.  In its release, it chose to target two countries – Canada and Spain – for declining sales and linked those declines to copyright law.  As it no doubt intended, the IFPI release succeeded in generating media coverage, including two Globe and Mail stories (here and here) that dutifully reported that Canada was perceived a piracy haven and was being criticized (again) by the global recording industry.

Yet it doesn't take much digging to see that the IFPI targeted the wrong country. Canadian sales declined by 7.4 percent last year.  That is obviously bad news for the industry, but it is almost identical to the global average of 7.2 percent.  In other words, far from a piracy outlier, Canada was actually consistent with declines around the world.  Moreover, while the IFPI chose to target Canada, the reality is the declines were far bigger in the United States (10.7 percent) and Japan (10.8 percent) yet neither country is described as a piracy haven. The IFPI data also shows that Canada was ahead of the curve on digital music sales growth. Canadian digital sales grew by 38 percent last year, while globally the number was 9.2 percent (the U.S. grew at 8 percent, below the global average).

Of course, none of these data points helped advance the agenda of painting Canada as a piracy haven, so they are conveniently ignored.  Look for more of the same later today when the U.S. government releases it annual Special 301 report and implausibly claims that Canada is one of the world's worst copyright outlaws.

30 Comments

  1. Record Sales
    People still buy CDs? Outdated technology is SUPPOSED to decline in sales.

  2. Neil Herber says:

    Public debate is not won by fair argument
    A study by Serge Galam looked at public debates driven by incomplete scientific data. His model predicts cautious balanced attitude loses – inflexibility wins. http://z.eton.ca/debate The IFPI case is an even worse example – public debate where the data is ignored.

  3. the CD is obsolete, like 35mm film. The CD was deemed to be ‘copy proof’ unlike DAT (DOA RIP). they forced cds the public at a time when PC had only floppy drives. The recording industry orchestrated it’s own demise. They got a good 20 yr run, and should now open a museum.

  4. James Gannon says:

    I took a different approach with these figures and tried to see what the countries that saw positive growth in the music biz were doing that we could try to emulate here in Canada. See my blog at: http://jamesgannon.ca/

  5. Barry Sookman says:

    Michael,

    I also disagree with your take on the IFPI report, as well as comments you made earlier regarding the labels’ appearance at the Heritage Committee:

    http://www.barrysookman.com/2010/04/30/canada-called-out-for-weak-copyright-laws-by-ifpi-and-at-the-heritage-committee/

  6. @ James Gannon

    I notice that you did not list the data for the US and Japan like Michael did. So in your first figure, where do they lie, and what policies do you believe lead to their rankings?

  7. @Sookman
    The IPFI is a pro-copyright lobby and has no credibility in this debate:

    http://www.dime-eu.org/node/477#comment-1

    In 2007 the IFPI announced that a member of the CMCC was at the top of the digital sales charts, at the same time chastising Canada over IP reforms. It’s not the credibility of Geist that is in dispute here it’s the credibility of the IFPI’s numbers, and there has been independent scrutiny over these number for at least 4 years, including from the United Nations Conference on Trade and Development.

  8. @Sookman
    Furthermore the posters comments you were referring to with respect to the CRIA also agreed with my initial take on the issue, that Henderson is basically hiding to avert a public backlash on product which is almost certain to happen here in Canada if we end up with a graduated response approach. Canadian Artists themselves will be targeted by the public and fans if this gets widely reported in media, and it will if it shows it’s ugly face in this bill.

  9. @Sookman
    “The IFPI claims that Canada’s digital piracy rate is estimated at 96%, one of the highest levels of online piracy in the world?”

    How are they obtaining these numbers? Where’s the scientific research to back up this claim?

  10. @Jason K: I am not willing to lay down a grand to view the report, however based on history I would surmise that the estimate is based on some assumptions that may have been pulled from a bodily orifice.

    They aren’t likely to highlight the US and Japan; this would indicate that the types of reforms that they are after not only don’t work, they are actually detrimental to the business. After all, it is US style reforms that they are after, so highlighting the US as having a GREATER decline would be a strike against implementing in my book.

    @Barry Sookman: Please expand on your disagreement. Based on what you’ve put here, it could be that you don’t like the font that it appears in.

  11. Anonymous Coward says:

    Copyright owners are in need of some good researchers.
    http://news.cnet.com/8301-31001_3-20002348-261.html

    “Three widely cited U.S. government estimates of economic losses resulting from counterfeiting cannot be substantiated due to the absence of underlying studies,” the GAO wrote in the report. “The illicit nature of counterfeiting and piracy makes estimating the economic impact of (intellectual property) infringements extremely difficult, so assumptions must be used to offset the lack of data.”

    The investigative body found flaws in the way some copyright owners calculated lost sales as a result of piracy. One big concern was how they determined “substitution rates.” This is a measure of how many people who buy pirated merchandise would have otherwise purchased legitimate products had the illegal material not been available. Would a person who downloaded a pirated copy of the hit film “Avatar,” have bought a legal DVD from Wal-Mart or a legal download from iTunes had the pirated copy not been there for the taking?

    Some people who illegally share movies or music may never have bought legal versions of the films or songs. Calculating this accurately is daunting because, again, it involves tracking the purchase of illegal goods, according to the GAO report.

  12. History Repeats
    Bob, Jason, others who will chime in. No need to ask them questions. Rather just look at their history. I’ll do it for you in case some are as lazy as I am.

    So I took the time to look up Barry Sookman and decided to share what he is about for those who may not know.

    Bazza Sookman and the 3 Strikes Plan
    http://www.p2pnet.net/story/34478

    Lobbying: CRIA’s Sookman leads the way
    http://www.p2pnet.net/story/18655

    BNN: silencing Canada copyright debate?
    Barry Sookman […] Sparing the implications of Bill C-61. Take down notices given so the public doesn’t see them
    http://www.p2pnet.net/story/24316

    Sookman sez no consultaions needed, useless!:
    http://www.p2pnet.net/story/26493
    (Are these not the same people who said the other week the consultations were meaningless and flawed? heh)

    Sookman, counsel representing CRIA, issued cease and desist letters to isoHunt.com
    “Linking is a crime”
    http://www.p2pnet.net/story/16945

    “There are real copyright problems,” Mr. Sookman concedes. “It doesn’t just affect Canadians. It’s a trade problem.”
    In other words, Canada needs ACTA to protect CRIA
    http://www.p2pnet.net/story/30101

    There’s no such thing as the Canadian recording industry. There’s only Vivendi Universal (France), Sony (Japan), EMI (Britain), and Warner Music (US, but controlled by a Canadian). Sookman acts for them via their CRIA (Canadian Recording Industry Association of America), a clone of the infamous RIAA.

    “January 9, 2009 Barry Sookman meeting with Tanya Peat, policy advisor to Canadian Heritage Minister James Moore and Zoe Addington, policy advisor to Industry Minister Tony Clement”
    http://www.p2pnet.net/story/30115

    It’s the Sookman and Stohn show!
    http://www.p2pnet.net/story/26402

    CRIA lobbyist Barry Sookman – Millions of jobs lost, Economic turmoil coming!
    http://www.p2pnet.net/story/10282

    Now I took the time to look up James Gannon. Figured I’d share it with you again since he is Sookmans right hand man, crowd-sourcer and doubles as a PR hack for Apple and Amazon.

    Big Music plugs RIAA into Haiti tragedy
    http://www.p2pnet.net/story/36701

    Pirates of the Caribbean ‘here in Canada’
    http://www.p2pnet.net/story/36538

    NDP iPod tax: ‘misleading blog commentary’
    http://www.p2pnet.net/story/37127

    Thinly veiled spin by mouth-pieces with no credible data. Name of the game with them. Cherry pick data, feed it to the ministers and press who swallow it up. I didn’t bother with the websites of the “3-amigo’s” who just put out blog after blog trying to counter most all blog posts by the Doc here. I couldn’t be bothered. Already know what they are. No need to look at more BS.

    Now you know too.

    “Anon-K” nailed it.

  13. I’ll keep fair use
    @Barry Sookman – If I have to give up all my fair use just to have amazon mp3 and myspace music, etc… I’ll keep fair use. For the record, AmazonMP3 and NetFlix is not in canada, because the studios (not Amazon or Netflix) would rather Canadians actually infringe copyright rather than have them pay for it. It boggles my mind that they (the studios) prefer Canadians to infringe copyright, rather than give them what they are willing to pay for… but then again, I’m not the head of some multi-national corporation… so what do I know about smart business.

  14. @Mr Rebutt
    Nice! Smoking was healthy at one point, and Global Warming was just a fad. What do these things have in common with copyright, PR spin, but facts prevailed. I’m confident the same will happen in this debate, eventually. I’ve been following the debate closely for the past 2 years and Sookmans blog as well. His blog and personal opinions are that of ideology, and he very rarely provides any factual arguments, which is strange for someone in the legal profession.

    He must know that his view point wouldn’t stand any weight in Canadian Courts with the scientific research that has been posted on this. His credibility as a legal councilor should and will be put into question at some point in a big way in the near future if he continues this PR spin without a scientific basis or back up, just as what happened to the Tobacco the Oil Industries who fought change. The public accepted the facts.

  15. @Mr Rebutt
    Furthermore this little spat will also focus the attention on more independent sources to cut through the bull, and even the Canadian Governments own independent source during the consultation warned of such approached Sookman is calling for, warned the government in implementing laws that they can not enforce, and favored legalization and monetization of file sharing specifically pointed to the SAC proposal as a step in the right direction. From my view and comments I’ve received on my personal blog, those independent voices/economists are virtually in sync with those views.

    Again I have to refer to this: http://www.dime-eu.org/node/477#comment-1

    I won’t worry too much about the PR spin. I’m a firm believer that what goes around comes around. Those that do wrong on society will get a bite in the ass at some point for it. It’s bad karma.

  16. @sookman
    The below was taken from: http://www.dime-eu.org/node/477#comment-1

    Personal comments made by Zeljka Kozul-Wright,UNCTAD Geneva, November, 20, 2007 in response to the Canadian File Sharing Study conducted by the Government a few years back:

    “Our own research would support the arguments made in the Andersen and Frenz Study , 2007, that indeed there may be a significant positive relationship between file sharing and purchase or greater use of various other formats containing music content (although not necessarily record sales per se). According to IFPI, legal downloads have risen significantly over the last 5 years and IPR-related earnings have also been on a significant increase at this time (IFPI, 2007; HFA, 2007). While record sales have declined, that does not imply that the entire industry in the decline. Indeed, other segments have risen in volume and in earnings, more than offsetting the decline in record /CD sales (IFPI, 2007; PWC, 2006; Kozul-Wright and Jenner, forthcoming).

    The more recent, healthy overall industry earnings indicate the opposite of Liebowitz’ assertion that …”file-sharing appears to have caused the entire decline in record sales and appears to have vitiated what otherwise would have been a growth in the industry” (Liebowitz, 2007). There is no empirical basis for such a facetious assertion. Additionally, there may be many other reasons for decline in record sales (the white elephant in the room), other than increase in file sharing (e.g., transformation to the digital technological paradigm, excessively high prices of CDs, i.e., excessive mark up, standardized quality, decline in purchasing power for luxury goods, lower degrees of choice and diversity, etc).

    File sharing and downloading not only increases market exposure but significantly reduces marketing and advertising costs. File sharing, as the imminent dominant mode of music consumption, is proving to be more “efficient” than simply purchasing pre-recorded music. Owing to diffusion of technical change, it is far cheaper, as it reduces the costs of intermediation and allows consumers greater choice over listening patterns; facilitating the growth of demand-driven patterns of consumption thereby enabling greater consumer participation, and more interactive modes of consumption. Global consumers as well as new producers can benefit greatly from the new P2P file sharing technologies that should be facilitated and legalised, rather than hindered.”

    Last year the UK version of Socan PRS for Music released a report that basically confirms Kozul-Wright’s research on this. Sales maybe not where they were in the 90’s, but the overall music industry grew by 13% in 2008: http://tinyurl.com/m4n4b5

    EXPLAIN THIS SOOKMAN!

  17. James Gannon says:

    Bob: The point of my blog post was to look at the countries that saw positive growth and see what they’ve done with their copyright laws to encourage music sales. If we’re going to be talking about examples for reform, shouldn’t we be looking at places that have a made some good progress last year, instead of highlighting the one or two places actually doing worse than us?

  18. @sookman
    In fact Sookman, if the graduated response theory were to be put into practice and actually worked, according to the quoted research we could be seeing a decline in the overall music industry in sectors that have rise as a result of file sharing. Which means you will be in fact taking money and growth away from artistic talent. This could happen in other industries as well that have reported strong economic growth. You seriously think that we are going to chance something like this on the basis of ideology not fact at a time when we have a very fragile economic recovery a head. Why don’t we just pay artistic talent by monetizing the act and legalizing file sharing? I’d like to know exactly why you believe monetization is a bad idea, and provide an economic and scientific argument.

    Creative Destruction is a theory used by Zeljka Kozul-Wright in her response, and was actually used by our government to sell our 2010 federal budget. There’s some very serious economic flaws in the graduated response theory that could have a very detrimental effect on our economy especially those area’s that have seen growth as a result according to the information in above quoted research. Rebutt it.

  19. @ Anonymous Coward – Some people who illegally share movies or music may never have bought legal versions of the films or songs. Calculating this accurately is daunting because, again, it involves tracking the purchase of illegal goods, according to the GAO report.

    Plus the money those people didn’t waste on regurgitated movies/music they spent on another industry like say food, clothing hmm gas which gave the gov more money.

  20. Anonymous Coward says:

    The decline in the Recording Industry profits
    They went from selling shiny plastic discs for $14.99 to selling digital singles for $1.29. The video game industry has grown and taken attention away from recorded music. The internet, with its hoard of amateurs giving away their music for free, has also created competition for the recording industry.

  21. @Anonymous Coward
    “They went from selling shiny plastic discs for $14.99 to selling digital singles for $1.29”

    Actually the price of music has actually stayed pretty much the same, but the costs of producing an album has lowered substantially due to technological innovation in music production. It’s way cheaper right now to produce music. The price of distribution is virtually nil thanks in part due to digital distribution channels.

    In the 90’s a full album of lets say 16 – 17 songs would run close to $22.00 CDN with taxes. Divide the 22 by 17 and you get $1.29 per song. It’s actually cheaper right now to buy music on CD than it is at Itunes if you think about it, and it costs them more to press and distribute CD’s than it does on a digital track. They are probably loosing substantial money on pressing CD’s. Hardly anyone uses CD’s anymore, why keep pressing them? That’s part of their economic problem.

    But I love how some in industry use the price of a digital track as a deception for the demise of the industry. I agree that the price of music should go up, I also think that’s part of the problem with respect to why artists feel jipped. Labels are banking the savings. Artists haven’t really gotten a pay raise in over a decade and that has nothing to do with consumers.

  22. Stereosage says:

    Music fan
    It’s hard to buy records if you can’t find any decent stores to buy them in (in physical form). Vancouver used to be a mecca. But then, A & B Sound went under. The well-stocked, but very over-priced Virgin Megastore threw in the towel. Best Buy has very little in stock and the young staff know nothing. HMV is the best of the lot, but as a friend in Ottawa commented, their stock of DVDs is bigger than CDs.

  23. “HMV is the best of the lot, but as a friend in Ottawa commented, their stock of DVDs is bigger than CDs.”

    Not true in GTA stores. In fact I was at Sunrise Records the other day in a suburb, and there’s selling newly pressed 12″ vinyl. Apparently there’s quite the demand for that now. I was also in HMV as well. Shelves are still fully stocked with CD’s. Not a lot of older stuff around on CD or digital, which is another problem for the industry, especially with the older crowd. Another need that’s not being actively met.

  24. @James Gannon

    While I agree that it’s important to look at what countries are doing right, you need to also look at what countries are doing wrong. If a certain policy is used in both groups, then it’s likely that it has no effect at all.

    I haven’t followed the specifics in each country, but I get the impression that countries like the US are promoting policies that the entertainment industry finds favorable. But are they working? Are these the same policies that are showing up in countries like Sweden, France and the UK? If so, then why does it work in some cases but not others? Are the effects the results of the policies put in place, or some other cause?

  25. Mr Rebutt says:

    one more
    Like the list given above showing the “dynamic-duo’s” history, I should also bring your attention to this article here by the Quebec Consumers Association:

    http://uniondesconsommateurs.wordpress.com/2009/12/17/ce-que-m-sookman-ne-dit-pas…/#more-3

    This is a google translate of it (its not a perfect translation, but it show how the friends of Castle misrepresent things in their favour, especially stats that are as a simple as 7 out of 25):

    On December 13, 2009, the website TorrentFreak published the list of 25 websites most popular torrents.

    On December 15, Barry Sookman, a lawyer at McCarthy Tetrault, Professor at the University Osgoode Hall, a registered lobbyist for the Canadian Recording Industry Association and the Canadian Association of Film Distributors, drew a red ball again on Canada, stating that the server 7 of the 25 most popular sites were hosted in Canada, which according to him would be evidence of inadequate domestic laws on copyright. (See: barrysookman.com/2009/12/15/canada’s-embarrassing-place-in-the-worldwide-bittorrent-rankings)

    Mr. Sookman comes later recalled how Europe, thanks to laws on intellectual property beautifully effective, managed to drive away from Europe torrents sites.

    But the truth is that 14 of the 25 sites of the most popular torrents are still hosted in Europe. Indeed, more than half of the most popular sites are hosted in countries of the EU or the Netherlands, Sweden, Czech Republic, and even in France.

    In addition, we note that two of the sites that appear on this list are hosted in the United States, the self-proclaimed paradise fight file sharing.

    Mr. Sookman, which can not yet ignore the relevance of this issue, do not mention who are the administrators of websites mentioned. When looking for recordings of such websites, we see that on the 7 sites hosted in Canada, there are only two registered, three others were registered in the U.S., one in Seychelles and one in Poland .

    Mr. Sookman here still shows its colors and its methods: its bias in favor of the entertainment industry and no repetition of arguments critical of the industry (even even try the same tactics to defend the indefensible, see his previous post on the amounts that the recording industry has “neglected” to pay the creators: barrysookman.com/2009/12/08/geist-inflates-pending-lists-claim-to-vilify-record-labels). According to him, whether to introduce a policy of the Internet to ensure the enrichment of the industry (and the depletion of the diffusion of culture), that is.

    However, and despite what appears to conclude Mr. Sookman, the classification of sites most popular torrents is indeed confirm that the repressive laws that European states have adopted do not flee from Europe torrents sites. In leu of denying the facts, it might be more constructive to consider establishing rules and practices more fair to restore a more harmonious relationship between the entertainment industry and the public that, whatever may be said continues to make it live.
    —-

    So again, this “dynamic duo” are misrepresenting data, making things up, spreading complete and utter nonsense, and can’t do a simple search. But then again they are paid lobbyists for the industry that wants to sue the world (and they stand to make a dollar). Everything they say is FUD.

    These are the type of people that will twist cancer research to make you believe cigarettes are great for your health, lobby for higher taxes, then open an Indian cigarette shop to by pass gov taxes in order to line their pockets.

    These are the people Minister Moore opens his doors for (must have a good retirement fund waiting for him), and the talks are then refused to be released via access to information due to copyright of sensitive industry secret’s. HEH

    So look at the articles by the Doc, then look at their FUD. See for yourself. Maybe if you are nice the “dynamic duo” will sell you a pack of Export-A for 3$…. It’s organic and loaded with essential nutrients 😉

  26. Crime pays big time, but never enough
    We must not believe in their losses whatsoever.

    The majority of businesses on earth have competition. The music business had virtually zero competition before the internet; thus, this is why their profits back then were extremely high. They’re now comparing current profits (with copious competition) to a virtual monopoly they had had for decades and decades. The new numbers now obviously cannot be the same as the price-fixing and the thug-controlled distribution days, so they blame everything and everyone.

    The only gullibles buying these numbers are the news media, such as the CBC, seeing how they keep repeating the basesless “$400 million” loss. Basically, this means your annual $400 million gain from previous decades and decades were illegally obtained. Stop whining you’ve lost $400 million, and seriously think you got away with stealing $400 million annually for decades and decades.

    The best in all of this copyright mess is publicity. More and more people are aware of these cartels’ dubious schemes.

    p.s. Imagine getting away with stealing $400 million annually for that long, but it’s never enough!!

    hahahahahaha

  27. To Fellow Industry PPL
    I think one of the first things that anyone needs to do is look at Sookman’s point of view on this subject. He is a lawyer, and admittedly already representing the CRIA. He himself and his firm has a financial interest in any litigation or user “penalties”. This is why the economics of this debate have to be better understood, and lawyers like Sookman shouldn’t be given an inch of credibility.

    In the UK over the past few weeks, lawyers have had a bit of change in heart. Mostly due to investigations brought forth by users on the overall conduct of the firms acting on behalf of the industry. TBI Law firm recently threw up it’s arms and quit representing the entertainment industries in quoting:

    http://www.ispreview.co.uk/story/2010/04/12/uk-law-firm-tbi-quits-sending-illegal-file-sharing-threat-letters-to-isp-users.html

    “We have been surprised and disappointed at the amount of adverse publicity that our firm has attracted in relation to this work and the extra time and resources that have been required to deal solely with this issue.

    We are concerned that the adverse publicity could affect other areas of our practice and therefore following discussions with our clients, we have reluctantly agreed that we will cease sending out further letters of claim.”

    A legal expert was interviewed stating that:

    “Hopefully, other law firms thinking of going down a similar route will begin to realise that although this work can generate vast financial rewards for law firms and their clients, it can also bring a lot of adverse publicity simply because the practice is inherently unfair and unethical.”

    Those reading who are in Industry, don’t think for a second that Sookman doesn’t have a personal financial stake in all of this. He will say whatever he has to in order to “Cash In” on this, rather than actually fix the economic issues we all face as an industry.

    On April 19th at 1:37PM Sookman tweeted ”Swedish Anti Pirate Bureau releases findings on impact of IPRED law: illegal file sharing down / sales up up http://ow.ly/1AkRO”

    Sales are up because there is nowhere to go but up (admitted to in this report), and missing are actual numbers for the industry Sookman represents: “There are no comprehensive figures available for digital sales, though leading companies such as Film2Home state that their sales more than doubled following the introduction of IPRED (from, however, comparatively low initial levels)”

    The report goes on to say “Immediately following the law’s enactment, a 30-40 per cent drop in internet traffic was recorded, by all accounts due to a drop in illegal file sharing.”

    From Industry’s own publication: http://www.billboard.biz/bbbiz/content_display/industry/e3i868d104ace88f49548c642eba3cd79e6

    “One thing the report left out is that P2P traffic in Sweden had reverted to pre-enforcement levels in just eight months, according to Netrod, the largest operator of Internet exchange points in Sweden. That means legal sales rebounded as piracy was on the increase – a mixed victory for content owners, but a victory nonetheless.”

    How many people canceled internet subscriptions during the 8 month period we saw this drop? What was the overall effect on all industries serving the digital economy? What was the overall cost economically of this 30 – 40% drop? These are questions that need to be answered due to the fact it’s not just the entertainment industry that is effected by all of this, and one of the reasons why our Government should be able to answer when the next bill is introduced. If they can’t than there could be an adverse effect across the board in all industries economically if users start to be penalized in any way shape or form.

  28. rrgg@hotmail.com
    Canada’s rate of decline in sales is also affected by the economy. Relative to the rest of the free world, Canada is booming, so they’re naturally going to spend more on everything including media.

  29. James Gannon
    James Gannon, I went to your blog and read what you had to say but can’t leave a comment as your comment button doesn’t work. Is that planned so that no one can refute your (quite easily picked apart) views?

  30. FinchCorinne26 says:

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