Free? Steal It Anyway
Andy Greenberg, 10.16.07, 6:00 AM ET
Forbes.com
Piracy, it seems, is about more than price.
That's one of the surprising discoveries to come out of an experiment by the British band Radiohead last week. On Thursday, the group made its latest album, In Rainbows, available for direct downloading from the Web at an unusual price: whatever fans feel like paying. Downloaders who want to pay nothing can enter "zero" in the site's price field and download the album for free.
But for hard-core music pirates, even free hasn’t been enough of a draw. According to music industry analysts, hundreds of thousands of Web users who frequent copyright-infringing file-sharing sites, including The Pirate Bay and TorrentSpy, have chosen to download In Rainbows illegally, distributing their contraband around the Internet just as they might with any other pirated album.
On the first day that Radiohead's latest became available, around 240,000 users downloaded the album from copyright-infringing peer-to-peer BitTorrent sources, according to Big Champagne, a Los-Angeles-based company that tracks illegal downloading on the Internet. Over the following days, the file was downloaded about 100,000 more times each day—adding up to more than 500,000 total illegal downloads.
That's less than the 1.2 million legitimate online sales of the album reported by the British Web site Gigwise.com. But Eric Garland, Big Champagne's chief executive, says illegal file-sharing is likely to overtake legal downloads in the coming weeks, given that many of those 1.2 million legitimate sales were pre-orders taken during the 10 days between when the band announced the album and its actual release last Thursday.
With popular album releases, illegal download volumes normally outstrip sales, says Garland. But more surprising is that fans chose to steal music they could legally download for any price they choose.
Garland argues that this kind of digital theft is more a matter of habit than of economics. "People don't know Radiohead's site. They do know their favorite BitTorrent site and they use it every day," he says. "It's quite simply easier for folks to get the illegal version than the legal version."
In Garland's experience, the store price of a new album plays little role in determining how often it will be pirated. Similarly irrelevant are the protective locks that recording companies put on files to try to stop pirates from copying and sharing file, so called digital rights management systems.
"Albums that are popular in retail are popular among pirates," Garland says. "In the big picture, if people want something, some will pay, and others will find a way to take it for free."
Despite the hundreds of thousands of illegal downloads, Radiohead's innovative online release could still be a smart fiscal strategy. By cutting out record companies, the band retains the full revenue stream of album sales, and monies from touring and merchandise sales.