Factor 1

Factor 1 | Factor 2 | Factor 3

Factor 1-a) Piracy (Samples and Rework Infringements)


Piracy has been the Cancer of the music industry since the introduction of the ADSL internet in 2003 in Europe. The natural response of the industry was obviously enforcing it, which has proven to be ineffective. Instead of conducting research on new options on how to tackle the issue, the industry choses to turn a blind eye, and chose another medium instead.

During our research we came across some simple solutions, that surprisingly have not been applied before.

        • Take away the contributor
        • Enforce the source of income

Sounds like drug enforcement, but is actually far from it. To better understand how this would work, we first have to understand the motivation of Piracy.


Traffic Business

Piracy comes in many different forms, but the core business is just one: Traffic. Piracy distributors use a source where the music is uploaded (in the past it was Zippy Share) and use its content to attract specific traffic that suits its customers. These are companies that pay for banners, which are priced according to the amount of traffic. A good example is commercial TV. Channels license great movies to broadcast at prime-time, which is usually right after dinner time. These slots are the most expensive for advertising, because this is when the most potential customers are watching. This is the same basic principle, that Pirate websites use, to generate income with their websites, which is aimed at: 'more traffic = more revenue'.


Piracy Saved SoundCloud

Early 2016 SoundCloud announced that it had financial problems. During that whole year Apple and Spotify where battling to buy SoundCloud. Why was that? That was because, according to research, there were more than 700 million users searching for Bootlegs on SoundCloud each month. Then in 2017, there was no more information, that led us to believe SoundCloud was still for sale. No information on who won between Apple and Spotify either. That led us to conclude that SoundCloud was now obviously no longer in the red. So how did they manage to survive without any form of financial injection?

Just to be clear, the following is only a theory we based on the information we have collected during our research. We do not have actual proof that this is the case, because our theory is based on a series of events:

        1. Lost interest of the MP3 by the MRLs, who are now focussing on the Stream
        2. This causes the strict monitoring of Bootlegs to fade away and then come to a complete stop
        3. Contributors found out, and switched from Zippy Share to SoundCloud (better service, bigger audience)
        4. DJ traffic switched from Pirate-websites to SoundCloud, generating the valuable Traffic
        5. New Traffic on SoundCloud attracts Advertisers, which increase the revenue
        6. Apple and Spotify both can not buy SoundCloud, because it is no longer for sale

Conclusion:

This migration from Zippy Share to SoundCloud is the key to our discovery on how to eliminate Piracy, because if we now look at the Pirate-websites that used Zippy Share to generate Traffic, they are now slowly closing down or switching to Movie Streaming, which is far more lucrative because of the consumer demand.

          • Take away the contributor (by offering a better option)
          • Enforce the source of income (adapt a new law that permits blacklisting Pirate website Advertisers)

ILM can offer contributors a new option, that supplies not only their demands, but offers new options no other website can ever offer legally. We firmly believe that with ILM and new Laws against Pirate Advertisers, we can create a new balanced Ecosystem, that eventually will bring Piracy down to where it no longer will pose a threat to the Industry.


Factor 1-b) Piracy (Free Content / Consumers)


Free Music Piracy is basically what consumers are looking for. When in 2003 ADSL internet was introduced, it suddenly was cool to be able to download music for free. Consumers who were still looking to purchase music were forced to resort to free downloading, just to keep up their social status. When Streaming was introduced, it seemed to have resolved the issue, and consumer Piracy is now lower than it has ever been. What the Industry is not aware of, is that while this issue has been resolved, it has also created many new ones we did not have before.


Streaming Media (Misconception)

MRLs welcomed the Stream with open arms, because the Stream apparently seemed to have resolved the issue of Piracy. In a way it did, but to what cost?

There is a strong misconception in the Industry, that the Stream is the future, because it can not be used for Piracy. The irony of this, is the fact that,Piracy with Streaming media has been more successful than the MP3 has ever been. Streaming Piracy has come so far, Pirate-websites don't even bother to offer music anymore. The modern Pirate-website is actually protected by Law (Mer Conduite) and uses Torrents to offer even the latest Hollywood movies for Streaming.


Popcorn Time (Legal Piracy)

One of the best examples is the Popcorn Time services. Here the Pirate offers an App, that can be downloaded and installed onto the desktop. Once it is activated, it scans the web for the best Torrents and offers all movies and the latest TV series better and faster than Netflix. There have been numerous attempts to take down Popcorn Time, or sue them, but this is not possible, because of the law that protects the Intermediate Content Distributor (ICD), like Facebook and Youtube etc.


The Irony of Spotify and UTorrent

The Irony of Spotify and UTorrent prove the inability of the MRLs to keep up with the digital market, because if they had done their homework, they would have discovered that the same CEO that came up with a "solution" was also the CEO that came up with the problem in the first place. Imagine a bank hiring a bankrobber and trusting him to guard the vault. As crazy as this must sound, there is a perfect explanation why.

This is a psychological phenomenon most common in investigative areas. Research has proven that pressure, frustration, and stress, often bring investigators in the position to be convinced of someone's guilt while they are innocent. This results in focussing only on finding evidence to prove guilt, causing them to overlook important evidence, that would solve the case.

In the Music Industry it was the frustration of failure to control the MP3 Piracy that caused the MRLs to fully support the Stream, abandoning the only and last media that is sellable, betting on a market based on borrowing. Streaming media business is compared to a Library. Books are borrowed and returned when finished. Basic pricing is for 1 week and a fixed price for each additional day. However if we then take a closer look at the Stream-model, it will show that the library-model is actually viable against the Stream model, which is nonviable. Library books are rented at a fixed price. The price per stream is actually a variable one.


Conclusion:

The Stream may appear to have resolved the Consumer Piracy issue, but has also created new issues, that are more damaging than Piracy, which is the elimination of 80% to 90% creative input on the market, which is credited to the Independent Record Labels. This sector is the Business to Business end, that produces music for DJs. Now, what is so important about the sector?

During the Golden Years of the 90s IRLs were responsible for more than 80% of all new major artists signed at MRLs today. IRLs are the bloodline of creativity for the MRLs, and by dropping the MP3 for the Stream, the MRLs have caused the destruction of the market of its best ally. What this means, is that instead of going forward, the Industry is going backwards to where it all started during the 50s. Sounds crazy?