Pop Didn’t Eat Itself: Why Piracy Didn’t Destroy the Music Industry

It’s a jolting figure: the US music industry is making less than half of what it made at its 1999 peak of $14.4 billion. It currently makes about $6.3 billion. Why did it drop so fast? Piracy, right?

Wrong. First of all, a fun little fact: that $6.3 billion figure is only album sales. Not ringtones, not licensing rights, not merchandise sales, none of that is included. Why don’t they include that? Because then you’d know they’re still making between $9 and $10 billion.

This kind of finagling of the facts is nothing more than par for the course for the last ten years. What’s brought the music industry down was not pirates, although Napster helped in a way. It was nothing more or less than the culmination of some painful economic karma that was richly deserved, and one company, Apple, seeing a weakness in an entire industry and striking like a cobra.

Don’t get us wrong, piracy is a problem in the sense that yeah, if somebody downloads a track instead of paying for it, the record companies are losing money. But as you’ll see, piracy is an amorphous problem in that it’s easier to pin the blame on than to accept that just maybe, they had all of this coming, and it reveals the current litigation for what it is: a very public and brutal hissy fit.

But first we need to understand why piracy is amorphous, and how that $14.4 billion figure came into existence.

Piracy: Impossible to Track, So Let’s Make Some Stuff Up

If you want to know how ridiculous, heck, stupid, the music industry is when it comes to piracy, look no further than the fact they literally demanded more money than exists on the planet Earth in damages in a recent case against LimeWire. But more interesting were the precedents the judge used in the case.