By : Agus Candra Suratmaja, S.P
Staff of Strategic Management Am Badar & Partners
Music piracy in Indonesia is not only in CD and DVD but also in digital format. Adi Adrian, an Indonesian musician, said that there were four types in selling music i.e. : 1. Physical (CD, DVD and Cassettes), 2. Digital (MP3), 3. Performance (off air and on air in Radios and TVs), and 4. Synchronization. All of them are vulnerable to piracy.
The most contributed factor to piracy of physical music (CD, DVD and cassettes) is the expensive price of CD and DVD.
Gumilang Ramadan, CEO of Musica Studio’s Indonesia, said that his company had lost trillions of rupiah because of illegal music downloads. According to Gita Wirjawan the Ministry of Trade of Republic Indonesia, piracy causes the lost in music industry for about 4.5 trillion rupiah per year.
Indonesian music industry has lost about 1.65 trillion in a day because the illegal download. According to Indonesian Record Industry Association (AIRI) illegal musics in Indonesia reaches 6 million in a day (zdnet.com, 2013).
Not only in Indonesia, piracy is a serious problem in worldwide. Based on Google research, for example, songs of One Direction (a famous boy band from UK) can be download from 135.000.000 illegal download sites.
According to Nielsen Soundscan and Billboard data, the sales of music in physical format are continued to decline year by year, with decreased sales 12,8 % in 2012. This reduction is due to the increasing number of piracy (hypebot.com, 2012).
The music industry has increased its digital revenues by 940 % since 2004 but suffered an overall global market decline of around 30 % in the same period. The IFPI (International Federation the Phonographic Industry) claim piracy is a huge factor (clickitticket.com, 2013).
The solution to fight against music piracy is by changing music format from CD and DVD to Digital Music. Apple, one of the largest digital music companies, done this method by established iTunes in April 2003.
Currently, music sales in CD and DVD is only 40 % from the total sales while 60 % sales in digital format. This digital format sales are still dominated by iTunes, Deezer and Google Music.
The NDP group, as market research company, has released findings that indicated iTunes as the biggest digital music market of all the music purchases in the US. In 2012, iTunes claimed 64% of the entire digital music market and 29% of all music sold at retail (including both digital and physical formats). NPD also reported that the market for digital ownership of music continued to grow despite increased user adoption of streaming and on-demand music services.
According to Data Customers download an average of 15,000 songs a minute from the iTunes music store, which was launched in April 2003.
Coming in at a distant second to iTunes was Amazon MP3, which saw a 16% share of the digital market. Other contenders like Google Play, eMusic, and Zune Music Pass each only had a 5% share or lower (Huffingtonpost, 2012).
Therefore, digital music sales in legal website can be a good solution to fight against piracy if the quality of music is better than music which downloaded from the illegal websites. For fight against music piracy the legal sites have to protect the music files, so that the files can not be copied and shared easily. Digital music sales can be one of solution to fight against of music piracy, because every people who want download the music can pay cheaper than buy CD and DVD.
Digital music sales are not only beneficial for musician and recording company, but also for music lovers, because they can only pay for the musics that they like. If they buy musics physically, they have to pay for all the songs in the album which they not like at all. But, by downloading the musics from legal sites they can download and pay only for the songs they like which is cheaper than buy a whole album. Moreover, the presence of smart phone can help everyone to download music efficiently.
Purchasing digital music is more efficient because we can use internet to download the songs. This efficiency will make it easier to purchase original music.
