Debate on Downloading, P2P, and the Music Industry

[David Farber <dave () farber net>]

------ Forwarded Message
From: Barry Ritholtz <ritholtz () optonline net>
Date: Tue, 08 Feb 2005 22:32:58 -0500
To: <dave () farber net>
Subject: Debate on Downloading, P2P, and the Music Industry

Hi Dave, 

I've been having an ongoing debate with a friend on P2P, downloading, and
the music industry.  He is a hedge fund manager, while I am a  market
strategist. We finally busted out warring word processors, and went at it.
Both yesterday and today, the entire dialogue was published on the
RealMoney.com site, which is subscription only.

I thought the IP list might be interested in this. With his permission, I
reproduced the full debate here:
    http://bigpicture.typepad.com/comments/2005/02/debate_on_downl.html

A quick excerpt will give you some flavor:
~~~~~~~~~~~~ 
CW: "The effects of piracy on the economy and the world are just getting
started. Music company EMI told investors today that it would miss sales
projections for the year by about 9%. Trading in England, the stock took a
huge hit on the news, wiping out billions of dollars of value.
     
Music content sales such as records, tapes and CDs have long trended with
the broader economies. With global economies steadily growing the last
couple of years, the music business should have been on fire. Alas, that is
not the case, and the single biggest reason is piracy." (snip)
     
BR: It's a complex issue, and people tend to grossly oversimplify it.
     
CW doesn't address the issue of the near infinite extensions of copyright, a
constitutionally unwarranted legislative act, a corruption of the framers'
intent, and a large corporate giveaway at the public's expense.
     
There are many more issues -- why didn't the music industry explore digital
distribution a decade ago? The short answer is that its retail distributors
vehemently objected to it. So it did nothing, despite its clientele
clamoring for a digital distribution channel. The marketplace hates a
vacuum, so up popped Napster, Scour, Kazaa, Donkey, Bit Torrent and the
rest.  (snip) 
~~~~~~~~~ 

I think there's some pretty good stuff here, and now that I have gone back
over it, I suspect that the IPers may find its worth the time to read it . .
. 


Cheers, 




Barry L. Ritholtz  
Chief Market Strategist
Maxim Group  
405 Lexington Avenue,
New York, NY 10174 
(212) 895-3614  
(800) 724-0761  
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Big Picture: Macro perspectives on the Capital Markets, Economy, and
Geopolitics   
http://bigpicture.typepad.com/comments

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