Felten's Unified Theory

Written by Eric Olsen
Published April 12, 2004
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In survey-based studies, Free-riders admit to filesharing and to buying fewer CDs because of their filesharing. But Samplers are reluctant to confess their filesharing to a stranger, being more risk-averse and more attuned to the dubious moral status of filesharing (not to mention its illegality). The result is that Free-riders are overcounted in survey-based studies, and Samplers are undercounted, so survey-based studies find that filesharing depresses CD sales.

The Oberholzer and Strumpf study measured the actual impact of both Free-riders and Samplers, and found that the lost sales caused by Free-riders are balanced by the increased sales due to Samplers.

The Boorstin study had different results for different age groups. His 15-24 age group was mostly Free-riders, who buy fewer CDs when they have Internet access, because their filesharing substitutes for purchases. His older age groups were mostly Samplers, who buy more CDs because of filesharing, and who are also, because of their high level of cultural engagement, predisposed to both Internet usage and CD purchasing. Therefore he found that young Internet users buy fewer CDs, while older Internet users buy a lot more. As a result there is a balance between the Free-riders and the Samplers which, right now anyway, nets out to about zero in terms of file sharing's effect on CD sales. Felten makes no claims for the theory's ability to predict future behavior or trends however.

It seems to me the way to turn young "Free-riders" into buyers isn't to sue them, but to offer them a service that isn't free but feels like it - in other words, if file sharers are given the option of doing about exactly what they are doing now, but legally, for $10 a month tacked on to their monthly ISP bill, most of them will choose that option over time.

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Career media professional Eric Olsen is honored to be the founder and publisher of Blogcritics.org, which, quite frankly, rules - as do his wife and four children.
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Felten's Unified Theory
Published: April 12, 2004
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Section: Sci/Tech
Filed Under: Sci/Tech: Internet, Music: Business, Music: News
Writer: Eric Olsen
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