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Recording Sales Would be 17 Times Higher Without Piracy, UMG Study Finds…

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Recording Sales Would be 17 Times Higher Without Piracy, UMG Study Finds…

by Paul Resnikoff

Spotify says they’re saving the music industry from piracy.

But what if piracy was eradicated, what would happen then?

That’s the focus of a massive study and initiative now churning inside Universal Music Group, the largest music label in the world but a company still hemorrhaging from piracy-related issues after more than a decade.  According to a pair of sources familiar with the comprehensive study, global consulting firm Bain & Company conducted the research and delivered the final report, while top brass at UMG parent Vivendi SA largely spearheaded the effort.

In one scenario, Bain found that if piracy and free content ended tomorrow, recording sales would multiply 17 times within three years.

bainco

The post-eradication scenario would look like this: during the initial year, consumers would be highly resistant to paying, considering a long-standing expectation of free.  But Bain predicted that as the ‘new world order’ started to settle, that resistance would gradually move towards greater payments in the form of premium Spotify subscriptions, increased vinyl purchases, and even download and CD buys.  “The first year is when everyone will be complaining, and refuse to buy,” one source told Digital Music News.  “But then it’s like everything else, where you pay because you have to.  Then, you start to see the recovery, then the big increase.”