Free Enterprise & Piracy in the Music Industry

In Six Faces of Piracy, Ramon Lobato addresses the issue of piracy by breaking it down into a variety of forms. One of these six types of piracy is ‘piracy as free enterprise’. In contrast to the common ‘piracy as theft’ perspective, this free enterprise point of view suggests that piracy caters to market needs and may actually be economically beneficial in some ways. Although pirated content itself does not generate a direct profit, Lobato suggests that piracy might still be monetized in some form. As an example, Lobato discusses product placement in movies. In this case, piracy may be beneficial to a showcased product, as increased circulation of a movie may lead to an increase in the highlighted brand’s value. While users may not be paying for their pirated content, this pirated content may lead them to purchase other goods at a later time.

This 2012 BBC News article, A Glimpse at Piracy in the UK and Beyond, seems to be somewhat inclusive of this view on piracy. While the story includes the harshly negative perspective of a BPI chief executive (“We are losing hundreds of millions of pounds a year that should be getting invested into new music”), it also presents the opinions of the artist. Ed Sheeran, the most illegally downloaded artist in the UK last year, appears to have a view on piracy that agrees much more with the ‘piracy as free enterprise’ concept. While 8 million copies of the album have been pirated and only 1.2 million have been legally purchased, Sheeran states that he feels good that 9 million people in the UK have his album, despite the majority being pirated. He believes that this gives people that wouldn’t necessarily buy the album a chance to listen to his songs, which can create new fans that might come to his performances. While he may not be profiting from the actual pirated albums, the illegal downloads help build Sheeran’s fan base, eventually leading to an increase in profits from tickets to his performances.

I can definitely see the logic behind Lobato’s ‘piracy as free enterprise’discussion. It does seem as though piracy can lead to economic success in some ways, and I find it encouraging seeing that today’s artists are open to the idea of a changing music industry. The BBC article states that an emerging business model for the industry “sees the album in a similar way to how it sees the music video: as a promotional tool for the artist, a mechanism to sell live performance tickets.” This new perspective seems to be aligned with Lobato’s free enterprise concept, as unauthorized circulation of music albums can be used as advertising for concerts in the same way that pirated movies may increase the effects of product placement.