Another study suggests filesharing doesn't harm music sales

Yet another study suggests that the RIAA is BSing.

Source:
- http://www.guardian.co.uk/online/story/0,3605,1265840,00.html

<fieldset class="fieldset"><table width=60%><td>Thursday July 22, 2004
The Guardian

As far as the music industry is concerned, the message is clear: file sharing is killing it. "Research clearly illustrates that the illegal use of music on the internet is damaging the entire UK music industry," said Peter Jamieson, the chairman of the BPI (British Phonographic Industry). Even Apple's chief executive, Steve Jobs, agrees. "iTunes really competes with piracy, not the other services," he said at the iTunes Music Store Europe launch last month. "Piracy is the big enemy - the market has shrunk in France and Germany and seen zero growth in the UK."

Yet despite the industry's belief that file sharing is anathema to record sales, a recent study has shown that it may not be so clear cut. "Downloads have an effect on sales that is statistically indistinguishable from zero," the controversial report claims, even going so far as to suggest that for popular albums, "the impact of file sharing on sales is likely to be positive".

The study, by Felix Oberholzer-Gee, Associate Professor in the strategy unit at Harvard Business School, and Koleman Strumpf, Associate Professor in the economics department at the University of North Carolina, analyses sales and download data, and its conclusions contradict the established music industry line.

During the last quarter of 2002, the pair gathered data from two peer-to-peer file sharing servers on the OpenNap network and matched individual downloads to the weekly sales figures of 680 chart albums.

"Our hypothesis was that if downloads are killing music, then albums that are downloaded more intensively should sell less," says Strumpf. But, after adjusting for the effects of popularity, they discovered that file sharing has "no statistically significant effect" on sales.

An economist with a love of music, Strumpf has been interested in file sharing since the Napster trial in 2000, but was not impressed by the evidence presented in court.

"I read through the studies that were used during the trial, and they were really horrible," he says. Many of the surveys concluded, incorrectly according to Strumpf, that people who download more buy less.

"The fact that there's a correlation does not imply that downloading is the root cause of these people buying less. File sharing is done primarily by teenagers and college kids because they have a lot of time on their hands but they don't have a lot of money. If we got rid of file sharing tomorrow, it doesn't necessarily mean these kids would be buying any more music."

Another problem is that asking someone about their illegal activities, particularly in the US where they risk prosecution, is unlikely to result in honest or accurate answers.

But Oberholzer-Gee and Strumpf are not without critics. "We consider it a very flawed study," says Matt Phillips, a BPI spokesperson. Both the BPI and the International Federation for the Phonographic Industries (IFPI) have criticised the study for including the Christmas period when people are buying CDs as gifts.

"It's very straightforward to address these kinds of criticisms," says Strumpf. "We got rid of the Christmas season and just looked at the first half of our data. We still find the same effect."

So, if downloading hasn't caused the slump in sales, what has? There are several factors that could be involved, but the easiest explanation is the popularity of DVDs.

"Over the period 1999 to 2003, DVD prices fell by 25% and the price of players fell in the US from over $1,000 to almost nothing," says Strumpf. "At the same time, CD prices went up by 10%. Combined DVD and VHS tape sales went up by 500m, while CD sales fell by 200m, so a possible explanation is that people were spending on DVDs instead of CDs."

It is clear that more work needs to be done before the market effect of downloading is fully understood, but Strumpf was unsure whether they would be able to conduct further work.

"The problem is getting hold of sales figures. Getting data on file sharing is hard, but it's possible. However, I imagine it's going to be difficult for us to get sales data in the future because of the views of the record industry towards us."

Prior to Oberholzer-Gee and Strumpf's report, there were no empirical studies based on actual file sharing behaviour, and the music industries in the US and the UK have based their policies on, at best, incomplete research. At worst, the surveys and analyses they quote are misleading and inaccurate.

Yet still the RIAA has sued its customers - an action Strumpf calls "one of the stupidest things in the world to do". The BPI has stated it is "prepared to go that route if forced".

Some even question whether the fall in sales the RIAA quotes is real, or a product of a creative redefinition of the word "sale". Even if it is real, there is one final fly in the ointment that can't easily be explained away: during the past nine months, CD sales in America have increased by 7%, despite continued growth in file sharing.

As Strumpf says: "If file sharing is killing record sales, why are records starting to sell better?"</td></table></fieldset>

 

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That was an interesting read. I had the notion of course that these people were just moneygreedy bastards who will do anything to make people miserable an dcough up more money.

And then someone really studies what is going on and shows that they are full of it. Nothing will change of course. They might inititate a sponsored analysis showing how evil filesharing really is.

 

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LOL, you're implying they haven't already.

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I kind of guessed someone would get results like that from studying, what I would add to the interpretation of fileshares is this:

When a person with limited funds downloads something, it means they can spend what funds they have on something "Else".

If the RIAA's complaint is followed through to the exact letter then you have a "Monopoly" enforced on the market place, where everybody is suppose to buy one copy of something. The problem with this is people do not have the money for that, the other problem is as an enforced Monopoly it would mean that POP Artists would end up with all their CD's being bought, but nobody would be able to afford CD's from Up and coming Artists.

So as it's been said elsewhere before "Money is like manure, It's not much good unless it's spread around to help things grow."

 

Interestingly I noticed the trend that people buy more DVDs instead of CDs in my own consumer behaviour. I rarely buy a CD anymore, because I think that they are not worth their price. With DVDs I view this in a slightly different manner. You seem to get more for basically the same price -length of material, size of data content, extras. I feel that slightly priced down DVDs are worth their money.

What do I get with CDs? I can't even play them on my computer often because of protection. That is the only place I play them! They are just not worth it. I have some music on my computer. Nothing downloaded, half mine, half borrowed. I just listen to that.

 

I've downloaded a few songs from a filesharing program but I only listen to those songs for myself. I don't see the difference than if I record it off the radio. And it's not if I have thousands of downloaded songs ... I'm not that obsessed wih the idea that you can download every song you've ever liked. If I buy a CD of my favorite artist ... than I'll probably have only 3 songs out of 16 that I actually like. That's not worth spending almost 20 bucks just so that I can listen to those three songs.

Computer games and software I would buy from a CD. Only because I get the full, untampered version with all the gimmicks and extras ... also because they are sure to connect over the internet.

As for movies, those are better off bought on a DVD just because you get so much more on the DVD than if you downloaded it from the net ... not to mention that the quality of the movie on a DVD is far superior than that downloaded from a P2P network. I downloaded the series premiere of Stargate Atlantis just to see if it was any good or not (of course I deleted the file afterward cause I had no need for it after viewing it) and it had a bit-rate of 88Kbs ... and believe me it showed.

The RIAA is just over-doing it with this entire situation. They make it sound like no one is buying any of their CD's and that in the next couple of years they will go the way of the dinosaurs (maybe they will

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). I jsut dont like their approach to resolving the problem.

 

Perhaps poor quality music, and a bit of blatant idiocy are more to blame?

 

This study is apparently contradictory ALPHA.I am a classic example of a person who Downloads and Buys less,in fact let me tell you something.After the advent of the Inernet and getting my connection at home (off course

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) i have never bought much of music.Except for some of Robert Miles stuff.

I think it depends upon an individual.You may be downloading music as well as buying,others simply might prefer to download from the Internet rather than go to shops on the internet and Buy.Time and Money consuming.

bye!

 

When you buy a $15 album and there are only one or two good songs on it, you are bound to use file sharing to get those one or two songs and skip freely over the filler crap they have.

 

He has some good stuff.

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Of course. But in general, filesharing is just free advertising. More people go out and buy the CDs of people they find through P2P to support the artists than there'd be if there weren't P2P.

 

One must be able to distinguish between something that is genuinely correct and something that seems correct because we want to believe so badly that it is correct.

Wake up.

 

According to:
http://www.megagames.com/news/html/hardware/riaa-movieindustrycryillegalizeit.shtml

It's been suggested that the RIAA are now intending to attempt to get all Tape recorders,CD-WR's, DVD copiers, Ipods banned.

There is no material to substantiate this claim that the RIAA intends this (source: www.RIAA.com)

However if all these recordable medias were attempted to be banned, people should realise that the common computer harddrive is albeit a "Storage Media" capable of housing and playing all the different media types that would be stored upon those pieces of hardware... Is the RIAA going to attempt to ban the sales of computers? Is the RIAA going to "close" the internet? I don't think so.