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Unlicensed P2P Value: $69 Billion in 2007
November 17, 2008
Thomas Mennecke
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If you could total the quantity of unlicensed tracks within the vastness of the P2P community, then apply a reasonable fee to those tracks, you would end up with a very large monetary number. $10 billion? $50 billion? Just how much untapped money, relevant to the music industry, is circulating in the P2P community? MultiMedia Intelligence, who recently stated P2P growth will top 400% in 5 years, has pegged a monetary number to unlicensed music. The number: $69 billion.

The number simply represents the value of music being shared on P2P networks - not necessarily the loss of revenue. Many people download for the sake of downloading, without any intention of ever buying music. Others use P2P as a tool, which they use to determine whether buying an album is worthwhile. Some people's buying habits have remained unchanged during the P2P era, and use P2P to make duplicate copies for portable listening. The point being, it's impossible to directly place a figure on the detriment - or benefit - P2P has on music sales.

But it's possible to know the value that P2P represents, or at least come up with a viable estimate. Doing so isn't terribly complex. The average price for a music track these days is about $0.99. From there, determine the approximate number of tracks traded in a year, and multiply that number by $0.99. If several billion files are traded per month on P2P networks, it's not hard to see where the figure $69 billion comes from.

“A US$69 billion figure is staggering to contemplate, but it effectively illustrates the impact of piracy on the music industry,” according to Rick Sizemore of MultiMedia Intelligence. “It is important to note that piracy has expanded well beyond music. Content owners of TV episodes and full length movies are seeing a growing impact."

Consider the massiveness of the $69 billion compared with iTunes. iTunes brings in an impressive revenue - according to Apple's 10-K filing, music sales were $3.5 billion in 2008. The music industry's total sales in 2007 hovered around $10.4 billion.

At the end of the day, there’s no denying that P2P technology holds tremendous financial potential. Too bad most of the P2P traffic and files traded are associated with The Pirate Bay – a fly in the ointment that few like to talk about.

This story is filed in these Slyck News categories
File-Sharing/P2P Related :: Statistics/Analysis

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