Record companies lose, artists gain from file sharing

”The graph the record industry doesn’t want you to see” according to Telegraph editor Shane Richmond. Here it is:

Music industry revenues in the UK, 2004 - 2008

Times Labs has made an analysis of the music market in the UK for the last five years, based on data from the UK collecting society PRS.

In the graph, the red field is what the record companies make. The three blue fields are what the artists make. The conclusion is very clear:

Record companies are making less, artists are making more, and the total amount is constant.

The reason record companies are making less money than they used to is probably due to file sharing. I’m happy to concede that. File sharing is a much better way to distribute music, so the service that the record companies provided is less and less in demand. It is only natural that they are in decline.

The best thing about this, is that the artists are making more money. People are spending just as much as they used to on music, but the record companies are getting less. Instead, the artists have increased their share to soak up the money that has become available.

More money for the artists, less to the record companies thanks to file sharing.

This is an excellent development, and something we should embrace. File sharing should be legalized. The artists are the ones that have the most to gain.

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