The problem with biased analysis (like this article) is that it never gives you a clear picture. I think we all know the music industry inflates their numbers drastically to make the problem of music downloads appear worse than it is. But the Norwegian study that says those who download music are 10 times more likely to spend money on music is also pretty easy to debunk (the sample size alone is enough reason to discredit it)
In the end I think the music industry is losing money not because of pirates but because their market has evolved. Now people can buy the one good song on an album and leave the rest behind (which cuts 90% of the record company’s revenue). That alone explains their losses. But they’re clearly in denial about it and looking for a bad guy. Music piracy fits the bill.
So imho most of the anti-piracy rhetoric is just label execs hoping there’s a solution to their revenue problem (e.g. "if we just stop the pirates our revenue will go back up")
Actually music exec have a solution to the problem it just takes a long time to implement.
The solution is known as 360-contract. Currently labels profit only from the selling of albums and some of the merchandise, but not from tours, sponsorship deals or ads. An artist on a 360-contract pays the label a cut of everything...
The assumption of the labels is that illegal downloads actually boost the total value of the artist, but diminishes their share (artists make more money on touring but less on the records). The labels have started to push their artists to 360 contracts a while back, but until all the old contracts are up for renegotiation they have no choice but fight the illegal downloading.
It sounds like a losing proposition, but it isn't, necessarily. A record label can hook someone talented up with word-class producers, session musicians and recording facilities, as well as setting up collaborations with established artists.
Some people can produce a great song in their home studio, but many can't. Mariah Carey has a superb voice, for example, but as far as I know she doesn't play any instruments and her interest in technology is limited to playing video games. A 360 degree deal can be a good option for a performer armed with a decent manager. The teevee and the music industry likes to lump everyone together as 'artists' but the reality is that many excellent performers aren't especially creative and just happen to be lucky enough to do something well, without necessarily being driven to explore any new musical frontiers. for this kind a of person, a managed career makes vastly more financial sense because they don't have a big prospect of making money from licensing their own tunes.
I imagine the relationship between the artist, and its contractor to be similar of small groups of hackers, and their investors. At any given time a record label has several "good enough" artists in their incomming tunnel to be able to make them sign just about anything.
In the end I think the music industry is losing money not because of pirates but because their market has evolved. Now people can buy the one good song on an album and leave the rest behind (which cuts 90% of the record company’s revenue). That alone explains their losses. But they’re clearly in denial about it and looking for a bad guy. Music piracy fits the bill.
So imho most of the anti-piracy rhetoric is just label execs hoping there’s a solution to their revenue problem (e.g. "if we just stop the pirates our revenue will go back up")