Piracy good for music business

Piracy is good for business, according to music analysts discussing the future of music at this week’s World Mobile Congress.

Since Napster started to gobble the sales of albums and CDs a decade ago, the music industry has been searching for ways to make money from its artists’ recordings. The innovation of pirates — who can find customers, make music accessible, and get pricing right — should be copied. It’s time to pirate the pirates.

“Piracy is a naughty word in the music business, but it indicates a level of interest,” says Cecelia Kurtzman, the New York-based manager of Alicia Keyes and Shakira, who is engaged to local Barcelona soccer player Gerard Pique.

“Piracy is a reason for optimism — interest in music is rising exponentially. We just need to find the right way to connect with the public.”

The problem with piracy is price, said Will Page, chief economist with PRS for Music, who referenced the huge problem of piracy in Latin America.

“It’s worth acknowledging this. Often we are overpricing. For the average Brazilian to buy Coldplay’s latest album Mylo Xyloto, given their purchasing power, retail outlets were asking for the equivalent of $80 (€60).

“Pricing can work both ways, though. It depends on geography. In Indonesia, for example, Justin Bieber recently sold out his concert — 10,000 tickets — at costs ranging from $54 to $181. Pricing is too high in some emerging markets, but too low in others.”

Brazilian company Terra is one of the top 30 most-visited websites in the world. The company has 100m unique visitors a month, 25m of whom tap into its music section.

“This year 10% of our customers accessing us are mobile,” says company CEO Fernando Madeira.

“A year ago, it was 2%; by the end of the year, it will be 25%.”

One of the challenges Terra faces is to get the right payment model. Most of its customers, who tend to be young, don’t have access to credit cards or traditional payment methods so Terra often relies on phone billing, where payments are added to a user’s phone bill.


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