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DARK SIDE OF THE MOON

Music piracy’s painful effect on the wider economy, from lost jobs to less tax

Reuters/Mario Anzuoni
Love lost—and revenue, too.
  • Amy X. Wang
By Amy X. Wang

Reporter

This article is more than 2 years old.

Even when music artists release their content through exclusive channels, most listeners don’t exactly have a hard time getting their hands it for free. Music piracy is also, of course, illegal, and it’s costing the global economy hundreds of millions a year—even in industries beyond music itself.

While pinpointing exact revenue loss is obviously impossible, the European Union Intellectual Property Office is out this week with a meticulous report (pdf), assembled from various global data sets from 19 EU countries in 2014, on music piracy’s direct and indifferent effects.

These nations lose an estimated €336 million ($376 million) a year due to piracy, it concludes.

Of that, €170 million is in music sales (a 5.2% drain on the music industry) and the rest in related losses, such as goods and services from suppliers. Since pirated music is illegal, activity in this realm doesn’t get taxed, meaning government revenue also took an additional hit of roughly €63 million.

It says music sales per person in these 19 EU member states have declined by one-third in nine years, from €12 in 2005 to €8 in 2014.

And in case financial figures are too abstract to induce any guilt, the EUIPO also took a look at piracy’s impact on employment. It figures that, in 2014, something around 2,155 jobs were lost thanks to the underground free-music market. Authors of the report note that the project “attempts to shed light on a phenomenon that, by its very nature, is not directly observable.”

Given that the EUIPO is pretty experienced at estimating the effects of counterfeiting, however, its findings can be trusted—even though they contradict other claims that piracy is actually good for the music business.

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