There's a rant over at
Donny's Blog poking fun at the RIAA's ridiculously-high "cost per copyright infringment" figures. The gist of it says that if one infringement=$150,000 and there are approximately 76,272,931 infringements taking place per month, then the RIAA is actually losing $11,440,939,650,000.00 (that's 11 trillion, for those of you too lazy to count) per month. That's 40x more than the
total cost of the war in Iraq. Per month.
Now, obviously, this is a work of satire, meant to make the RIAA look like the greedy little piggies that they are. But it got me thinking... what are the artists whom the RIAA controls truly losing due to piracy? Unfortunately, no one really seems to have a good estimate of the number of illegally-downloaded songs for 2005. I've seen estimates ranging from Donny's modest 952 Million per year to the 480 BILLION per year figure put out by a group of ISPs and their upstream providers. I've decided to use the RIAA's figures:
Loss for the year 2005 due to piracy: $4,200,000,000.00
Average profit per online sale: $0.66
Average sale price per song: $1.00
Dividing total loss by average profit per song - then multiplied by average sale price per song - shows us that there were 6.4 Billion songs downloaded illegally last year.
As for the RIAA's beloved recording artists, they're only receiving a paltry
10-14 cents per legally-downloaded song.
So, going by these figures:
- 6,400,000,000 illegal downloads per year
- $0.12 per downloaded song (on average)
We see that RIAA-represented artists as a whole are losing a whopping $768,000,000.00
each year. You might be thinking, "Well, just how many artists are actually signed to RIAA-affiliated labels?" Good question. Unfortunately, I haven't the slightest idea. If you do, let me know. I do know, however, that there are 1,633 labels under the RIAA's iron umbrella. This means each label is losing approximately $470,000.00 per year. Ouch.
But wait, statistics show that the BIG 4 record labels account for more than 85% of all music sales made in a year. It would only make sense that those same labels are bearing 85% of the loss due to piracy, right? Meaning each of the big companies - Universal, Sony/BMG, EMI, and Warner Brothers - lost $130,560,000.00 last year, while the other 1,629 RIAA-led labels only lost $70,718.00 each. Much more reasonable. Of course, for a smaller label, that kind of loss can be devastating.
But what about other sources of income for artists and labels? Ticket sales rose to a record $3.1 Billion last year (up from $2.8 Billion in 2004). Depending on the artist and the venue, they can receive anywhere from 50% to 90% of the ticket price. That's $1.5 Billion to $2.8 Billion in profit. And then there's the merchandise - artists average $10 per concertgoer per show on merchandise alone. With 36.1 Million tickets being purchased in 2005, that means $361,000,000.00 was paid to the artists. And directly to the artists, I might add. The RIAA typically has no hand in concerts and tours.
Again, these figures mean nothing without an accurate count of artists under the RIAA's fist, but compare the loss due to piracy per small label ($70,718) and the gain due to increased concert sales per label ($184,162), and you'll see that the "huge loss" being claimed by the RIAA really isn't that severe. Considering the 400% increase in online music sales from the year before, and the huge increase in ticket sales, it looks to me like the RIAA really isn't suffering as much as they'd like us to believe they are.
So take that, RIAA! I'm just as good at making up numbers as you are!