How Piracy Drives Revenue

Ed Sheeran, the UK artist who currently holds the distinction of having the most BitTorrented song in that country, is sanguine about pirated songs.

“I sell a lot of tickets. I’ve sold 1.2 million albums and there’s eight million downloads as well, illegally,” Sheeran told BBC’s Newsbeat earlier this week. “So nine million people have my record in England, which is quite a nice feeling. You get people who actually want to listen to your songs and come to an event like this in London, who wouldn’t necessarily buy the album.

“You can live off your sales and you can allow people to illegally download it and come to your gigs. My gig tickets are £18 and my album is £8, so it’s all relative,” Sheeran added.

Sheeran is not alone. As recording revenue falls, artists have been making up for the loss by increasing concert performances. A 2010 report from the National Bureau of Economic Research demonstrated that “file-sharing reduces album sales but increases live performance revenues for small artists, perhaps through increased awareness. The impact on live performance revenues for large, well known artists is negligible.”

This all fits within the theory that “piracy is the new radio,” a statement made by musician Neil Young back in January.

“Piracy is the new radio. That’s how music gets around… That’s the radio. If you really want to hear it, let’s make it available, let them hear it, let them hear the 95 percent of it,” Young said.