March 30, 2004
File sharing not to blame for industry woes
So, the industry will stop suing schoolchildren and start worrying about quality and value now, 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.Posted by Norwood at March 30, 2004 02:48 PMSongs 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.
