Business Matters: Former EMI Exec Says File-Sharers Are Good Customers
Business Matters: Former EMI Exec Says File-Sharers Are Good Customers

Ex-EMI Exec Says File-Sharers Purchase Music; Will Targeting Broadband Users Hurt Sales?
-- Former EMI executive Douglas Merrill has reiterated what many studies and surveys over the years have showed: file-sharers are also good music customers. Merrill reportedly made the comments at a conference in Australia.

After profiling users of the popular file-sharing service LimeWire and comparing them to iTunes customers, he saw that the biggest iTunes buyers were the same as the highest-sharing LimeWire users. "That's not theft, that's try-before-you-buy marketing and we weren't even paying for it… so it makes sense to sue them," he said sarcastically.

It may be novel to hear this from a former music executive - albeit one with a short-lived career - but there has long been surveys and studies that told the same story. A 2009 Jupiter Research survey of commissioned by a variety of music industry trade groups found that music sharers in five Western Europe countries were more likely to buy digital music files than average Internet users. A different 2009 study of UK consumers found that file-sharers spent 75% more each year on music than people who had not engaged in file-sharing. A 2005 study by Speakerbox that was carried out by The Leading Question found that file sharers were spending four-and-a-half times more on legitimate downloads than average fans and were eager to try legitimate music services in the future.

Much has changed s ince Merrill openly criticized the RIAA's strategy of suing consumers back in 2008 ("What we need to do is understand when is it good, when it is not good...Suing fans doesn't feel like a winning strategy," he told CNET). The RIAA has clearly moved beyond consumer lawsuits. U.S. entertainment companies and ISPs recently agreed to a new framework for fighting piracy on broadband networks. And labels licensed their catalogs to Spotify, a streaming service with a free version that offers the best legal alternative to piracy this side of YouTube.

Nevertheless, today's anti-piracy efforts do spur concerns. Given the findings of these and other studies, it seems more than rational to think that graduated response programs will end up targeting broadband users who purchase music. The end result of some programs - not all of them - will be suspended service. So, in effect, music fans with suspended service are less likely to purchase music, buy tickets online, respond to email marketing and engage with the bands they love. If there is a bright side here, however, it is that numbers coming out of France and South Korea show very few broadband customers are ending up with suspended service.
( Computerworld)


Bands Might Want to Chill on a Google+ Account

-- Don't set up a Google+ account for your band just yet, warns music marketing expert Bob Baker. The growing social network - over 20 million users - is set up only for individuals, he explains. Accounts for businesses and brands will be rolled out later this year. As a result, creating an account for a band or a venue could get the axe as Google removes profiles set up under a company name or pseudonym.
( Hypebot)

Hastings Raises Its Revolving Credit Ceiling
-- Hasting Entertainment has changed its loan and security agreement with Bank of America. The company increased its revolving credit ceiling to $115 million from $100 million and increased its borrowing base as well. ( Hastings 8-K filing)

Outbox CEO Fred Rosen's One-Liners
-- Outbox CEO and former Ticketmaster CEO Fred Rosen thinks the ticketing industry is ready for a shift - and he's full of one-liners. He says Groupon is "rat poison" for the ticketing business because it "destroys your ability to keep the integrity of your product." He thinks Ticketmaster made a big mistake in purchasing TicketsNow, which he refers to as TicketsNever. He believes the paperless ticketing law passed in New York is the right law. "The event is the show, not getting into the arena," he said.

His 40-minute keynote Q&A at the Ticketing Summit 2011 (below), available at YouTube, provides a counterpoint to This Week in Music's recent interview with Ticketmaster CEO Nathan Hubbard. Watching both requires quit a bit of time but worth the effort.