The negative impact of the internet on music sales has been greatly exaggerated. I’m shocked, shocked.

From Ernesto at TorrentFreak, an excerpt:

In 2010 the BPI reports that there were 281.7 million units sold, which is an all-time record. Never in the history of recorded music have so many pieces of music been sold, but you wont hear the music industry shouting about that. In fact, the music industry is selling more music year after year and today’s figure is up 27% compared to the 221.6 million copies sold in 2006.

But, instead of praising the increasing consumer demand for music, the industry cuts up the numbers and prefers to focus on the evil enemy called piracy. By doing so they spin their message in a way that makes it appear that piracy is cannibalizing music sales. But is it?

In their press release the BPI points out that album sales overall were down by 7%. Although digital album sales were up 30.6%, physical CDs were down by 12.4%. If we believe the music industry, this drop in sales of physical CDs can be solely attributed to piracy. This is an interesting conclusion, because one would expect that piracy would mostly have an effect on digital sales.

We have a different theory.

Could it be that album sales have been declining over recent years because people now have the ability to buy single tracks? If someone likes three tracks from an album he or she no longer has to buy the full album, something that was unimaginable 10 years ago.

This theory would also fit the sales patterns of the last few years, where album sales are down year after year while the number of individual tracks sold is increasing rapidly. In 2010 the UK music industry sold 161.8 million singles (digital and physical) compared to 66.9 million in 2006. Where does piracy fit in here?

Could it possibly be that piracy is only affecting album sales and not single sales? Would that make sense?

Or could it be that the consumption habits of the average music consumer have changed in the last decade?

Is peer-to-peer music downloading fair use? I doubt it.

In defending an individual against liability for downloading music via peer-to-peer networks, Harvard Law Professor Charles Nesson apparently is going to argue that his client’s activities constitute fair use of the copyrighted music. His arguments don’t seem terribly persuasive to his peers, and I confess that it is not clear to me at all what his argument is. Ars Technica even asks, “Is Harvard Law professor Charlie Nesson crazy?”

Nesson seems likely to argue that there is no remedy for non-commercial music downloading in the absence of proof of actual economic harm. If that is the basis of his argument for fair use, at least it makes some sense (even if it seems unlikely to prevail). 

More effective, perhaps, will be Nesson’s efforts to convince the court that a jury should decide his client’s fate. As he explains:

 Fair use is recognized as a common law, perhaps a constitutional concept, not defined by but merely recognized and continued by the statute (Sony, Harper); that the statutory four factors are illustrative and not exhaustive; that analysis must be case by case; and the question is a jury issue. 

But I’m not sure he’s entirely right about that. Both an influential treatise (4-13 Nimmer on Copyright Section 13.05, n. 17) and the courts suggest that whether certain acts constitute fair use is a “mixed question of law and fact.” A question of law is one a judge determines; a question of fact is one a jury determines. A mixed question of law and fact is one in which a jury determines what happened, and the judge determines the legal effect of those facts. See, e.g., Fisher v. Dees, 794 F.2d 432, 436 (9th Cir. 1986)  I’m not sure how Nesson is going to persuade jurors who might be sympathetic to his client to find the historical facts he needs to convince the court his client’s music downloading was fair use.

There is nothing new under the sun.

From BestActEver.com:  The Long War: Music Piracy in 1897 (NYTimes):