> I don't think the facts are that easy to see.

The Swiss report is a 13 page meta-analysis with 53 footnotes, many of which are citations of other studies.

> the cost of providing the services doesn't [remain constant]

Actually, you're right. The labor of producing that track is unchanged. The cost of distribution goes down. The cost of the concert is unchanged. So, net cost of 3 minutes of happiness went down.

> So, net cost of 3 minutes of happiness went down.

Yes, this is a key economic truth that seems almost completely missed.

Every pirated copy that is used actually adds value into the economy. It is sort of hilarious how upside-down the usual presentation is: all the figures of so many m/billions of losses are actually more like the opposite, they are gains to the public. The only possible loss anywhere is in reduced production -- but that is never demonstrated.

I have to say, that is an excellent point. I've never really considered the overal addition to societal utility that free distribution of a non-scarce good creates.

Neither do most people, and it seems like the most critical insight in discussions like this.

Copyright and patents exist specifically because the public wants more creative work produced, and at the time, granting temporary exclusive rights appeared to have the net result of enriching the public domain in the long run. They both represented tradeoffs: you can have a temporary monopoly if that gets you to create work that wouldn't otherwise exist, because after a relatively short time your work then becomes part of the public domain.

Those tradeoffs don't necessarily make sense now. The durations have gone up drastically, with no corresponding increase in the value we get. We also lose far more value during that time, because we've reduced the cost of copying to zero, and in the process created an astonishing number of awesome ways to work with media. The durations and rights of copyright should have gone down over the years, because authors can extract value from works more quickly (no 20 year ramp time needed), and because we lose so much by not having a work readily available to merge into our culture sooner; thus, we don't need to trade off as much value to get what we want.

When you see the whole mechanism of artificial scarcity as a society-wide "payment" for what we want, then you start wondering why we pay so much more for so much less, and whether we ought to stop buying entirely.

" If someone downloads music for free and uses the money saved to go to a concert, they are consuming more in terms of other people's labor for the same price."

Though due to the higher distribution of the content (since its at no cost to the consumer), more people are discovering it, and more people are going to the concerts. Lower margins, higher volume.

Not if entertainment budgets are constant, which is the assumption in that study. Constant entertainment budgets means there is no room for volume growth in terms of money, unless you are referring to developing countries where it's probably different.

Even in a flat market, of course there is room for volume growth for the individual proprietor, in this case, the artist. But a flat market requires more competitive rules to avoid monopolistic tendencies. In the Swiss regime, the distribution of sales will smear out over more small artists and fewer giants. The long tail gets thicker. My brother is an artist. I'm totally fine with that scenario.

Even if the money spent is constant, the money is moving from the distribution cost (marketing, CDs, etc) to the artist (concerts) in the case I described above.

Concerts need to be marketed as well and it takes a lot of time to perform on stage (I used to help with that and have done some myself). So if you work out compensation per hour, I'm not sure if concerts are really a better deal for artists. My guess is that it is a better deal only for the long tail of less well known artists who make almost nothing from media distribution anyway.

I assume entertainment budgets are a constant percentage of total discretionary spending. So they go up as income increases with economic growth.

True, but real incomes have been stagnant in the US and many other developed countries for over a decade.