OTCQB: RIHT April 25, 2017

Overview

In January 2011, According to “Technical report: An Estimate of Infringing Use of the Internet”, Envisional, a market research and consultancy firm reported that P2P traffic that infringes on copyrights had reached 24%. In other words, 24% of all Internet traffic is the illegal downloading and distribution of mainstream, high-quality movies, music, games, and software.

Today in the United States and all over the world, every song ever recorded, every movie ever made, most books ever written, many video games and most software programs are available instantly for free.

Rightscorp believes that no industry can compete long-term with their equivalent product available instantly for free.  We believe that when creators choose to distribute freely on the Internet, this is perfectly acceptable, but not all creators should be forced to distribute freely.

There were more than 150 billion music, movie, book and software files distributed illegally in the United States in 2011.  Rightscorp is the first company to turn that into a legitimate revenue stream. 

We are creating a new digital loss prevention industry... and aim to send "Pirates" back to the world of fiction.

 

The Effect of Piracy on the Music Business

According to Global Internet Phenomena Report in Sandvine, 2H 2012, P2P file sharing accounted for approximately 10% of all North American internet traffic.[1].

According to the International Federation of the Phonographic Industry (IFPI) Digital Music Report 2009:

  • “Single track downloads [sales] . . . in 2008 [were] 1.4 billion units globally”
  • “Over 40 billion files were illegally file-shared in 2008, giving a piracy rate of around 95 per cent.”
  • The IFPI has not published any infringement totals since 2008, but the Cisco VNI report shows that file sharing has grown by more than 20% CAGR per year since 2008. 
  • Filesharing in the US grew 40% from 2011 to 2012.[2]

According to the International Federation of the Phonographic Industry Digital Music Report 2011, global recorded music sales have dropped from $27.3 billion in 1999 to $15.9 billion in 2010. [3]

 

chart-global-recorded-music-sales.jpg

Won’t New Streaming Services Like Spotify Pick Up The Slack?

According to analyst firm Forrester's latest report music industry revenue will flat line at around $5.5 billion in 2013[4].  This report takes into account the new streaming services.

ppt-growth-p2p.jpg

chart-decline-physical-revenues.jpg

Doesn’t Piracy Drive Awareness of New Music like Radio Does?

 

The 2010 IFPI report states:

In virtually every country of the world, spending on recorded music has fallen since illegal file-sharing became widespread. All but a few of the independent surveys confirm that the net impact of illegal file-sharing is to reduce spending on legitimate music. Most academic studies exploring the dramatic fall in sales of recorded music conclude that the damage caused by illegal file sharing is a major factor in the decline. 

These include Norbert Michael (The Impact of Digital File-Sharing on the Music Industry: An Empirical Analysis, 2006), Rob & Waldfogel (Piracy on the High C’s, 2006) and Alejandro Zenter (Measuring the Effect of File Sharing on Music Purchases, 2003). 

A 2006 study by Professor Stan Liebowitz, File-Sharing: Creative Destruction or Just Plain Destruction? concludes: “The papers that have examined the impact of file-sharing can be categorized by result and by methodology. By results the classification is quite simple. There is one study (Oberholzer and Strumpf, 2004) that claims to find a zero impact but it has been frequently discredited. All the other studies find some degree of negative relationship between file-sharing and sales of sound recordings.”

Research from Harris Interactive in 2009 among 3,400 online consumers aged 16-54 in the UK highlighted that nearly one in four P2P file-sharers (24%) typically spend nothing on music, while also finding an overlap of legal and illegal downloading among some file-sharers.  A Jupiter Research study in five European countries among 5,000 internet users aged 15 and over in 2009 found that, although there is an overlap between the habits of online music buyers and file-sharers, most illegal file-sharers “do not buy music and are nearly half as likely as music buyers to buy CDs in a high street shop or from an online store.” The study also finds that the net effect of illegal file-sharing is negative. “Although it is possible that file-sharing functions as some sort of discovery tool for those digital music buyers that also file-share, it is reasonable to assume that their spend would be higher if they were not file-sharing. The overall impact of file-sharing on music spending is negative.”

Source: International Federation of the Phonographic Industry


[1] http://www.sandvine.com/news/global_broadband_trends.asp

[2] http://ethicalfan.com/2012/11/torrent-freak-bittorrent-traffic-grows-40-2011-sandvine/

[3] http://crenk.com/2011/03/29/ifpi-report-on-global-music-sales-digital-music-sales-are-up/

[4] http://www.forrester.com/rb/Research/us_music_forecast,_2009_to_2014/q/id/55347/t/2