Do you mean to imply that the record industry’s slump over the last few years might actually be somehow related to the ….. ….. policies and behavior of the record industry? No, my brain can’t contain the impossibility of the concept since we all know that file sharing accounts for every dime of the industry’s slump. And the economy, and expanding entertainment options have nothing to do with it either, right?
- Internet music piracy has no negative effect on legitimate music sales, according to a study released today by two university researchers that contradicts the music industry’s assertion that the illegal downloading of music online is taking a big bite out of its bottom line.
Songs that were heavily downloaded showed no measurable drop in sales, the researchers found after tracking sales of 680 albums over the course of 17 weeks in the second half of 2002. Matching that data with activity on the OpenNap file-sharing network, they concluded that file sharing actually increases CD sales for hot albums that sell more than 600,000 copies. For every 150 downloads of a song from those albums, sales increase by a copy, the researchers found.
“Consumption of music increases dramatically with the introduction of file sharing, but not everybody who likes to listen to music was a music customer before, so it’s very important to separate the two,” said Felix Oberholzer-Gee, an associate professor at Harvard Business School and one of the authors of the study.
Oberholzer-Gee and his colleague, University of North Carolina’s Koleman Strumpf, also said that their “most pessimistic” statistical model showed that illegal file sharing would have accounted for only 2 million fewer compact discs sales in 2002, whereas CD sales declined by 139 million units between 2000 and 2002.
“From a statistical point of view, what this means is that there is no effect between downloading and sales,” said Oberholzer-Gee.
For albums that fail to sell well, the Internet may contribute to declining sales. Oberholzer-Gee and Strumpf found that albums that sell to niche audiences suffer a “small negative effect” from Internet piracy.
The study stands in opposition to the recording industry’s long-held assertion that the rise of illegal file sharing is a major cause of declining music sales over the past few years. In making its case, the Recording Industry Association of America (RIAA) points to data showing that CD sales fell from a high of more than $13.2 billion in 2000 to $11.2 billion in 2003 — a period that matches the growth of various online music piracy services.
….Eric Garland, chief executive of Big Champagne, an Atlanta company that tracks file-sharing activity, said the findings match what his company has observed about the effect of file sharing on music sales. Although the practice cannibalizes some sales, it may promote others by serving as a marketing tool, Garland said.
….The Harvard-UNC study is not the first to take aim at the assertion that online music piracy is the leading factor hurting music sales. In two studies conducted in 1999 and 2002, Jupiter Research analyst Aram Sinnreich found that persons who downloaded music illegally from the Internet were also active purchasers of music from legitimate sources.
“While some people seemed to buy less after file sharing, more people seemed to buy more,” Sinnreich said. “It was more likely to increase somebody’s purchasing habits.”
The 2002 Jupiter study showed that people who traded files for more than six months were 75 percent more likely than average online music fans to spend more money on music. [Washington Post]
The full study is here.
Meanwhile, the industry continues to sue its customers for engaging in an activity that at worst appears to cause them only slight harm, and at best may actually increase their sales.