New study on effects of file-sharing and cd sales

[Stephen Joseph 0]

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Does file-sharing hurt CD sales?

A new study by two researchers at Harvard Business School and the University of North Carolina, Chapel Hill, finds that sharing digital music files has no effect on CD sales. This is the first study that directly compares actual downloads of music files and store sales of CDs.

The authors, Associate Professor Felix Oberholzer-Gee of Harvard Business School in Boston and Professor Koleman Strumpf of the University of North Carolina, Chapel Hill, conclude that "File sharing had no effect on the sale of popular CDs in the second half of 2002. While downloads occurred on a vast scale during this period - 3 million simultaneous users shared 500 million files on the popular network FastTrack/KaZaA alone - most people who shared files appear to be individuals who would not have bought the albums that they downloaded," say the authors...

 

Even in the professors' most pessimistic statistical model, it takes 5,000 downloads to reduce the sales of an album by a single copy. If this worst-case scenario were true, file sharing would have reduced CD sales by 2 million copies in 2002. To provide a point of reference, CD sales actually declined by 139 million copies from 2000 to 2002.

 

 

Here is another interesting tidbit:

 

31 percent of all individuals who download music live in the United States. Other important countries are Germany with a 13 percent share of worldwide users, Italy with 11 percent, Japan with 8 percent and France with 7 percent. File sharers in the United States are particularly active. While they represent 31 percent of worldwide users, they download 36 percent of all files.

U.S. file sharers download files from all over the world. Only 45 percent of the files downloaded in the United States come from computers in the U.S. 16 percent of music files are downloaded from computers in Germany, 7 percent from Canada, 6 percent from Italy, 4 percent from the U.K. A legal strategy that focuses mostly on the United States is unlikely to change the supply of music files.

 

 

In other words, going after domestic uploaders, as the RCAA is doing, won't cut off supply.

 

 

 

My take: Yes I believe the result. Most downloaders are young or just sampling songs for kicks. But I doubt if this, legal developments aside, would be true five years from now. Over time I expect more people to forgo buying the CD, unless of course the law intervenes.

 

Addendum: Newmark's Door offers some additional links. Larry Lessig argues for complementarity. Here is an article that copyright is too strict more generally, and yes The Grey Album is wonderful.

 

 

credit

http://www.marginalrevolution.com/marginal...filesharin.html

http://www.ascribe.org/cgi-bin/spew4th.pl?...r=2004&public=1

[starvenger 0]

Since I got no love in the music folder (or maybe not enough people care about what happens outside the US), I'll tack this on here as well...

 

Court rejects music copyright suit

Internet providers don't have to name users

 

BY ANGELA PACIENZA

CANADIAN PRESS

 

In what analysts are calling a "stunning" decision, the Federal Court has ruled against a motion which would have allowed the music industry to begin suing individuals who make music available online.

 

Justice Konrad von Finckenstein ruled today that the Canadian Recording Industry Association did not prove there was copyright infringement by 29 so-called music uploaders.

 

He said that downloading a song or making files available in shared directories, like those on Kazaa, does not constitute copyright infringement under the current Canadian law.

 

"No evidence was presented that the alleged infringers either distributed or authorized the reproduction of sound recordings," von Finckenstein wrote in his 28-page ruling. "They merely placed personal copies into their shared directories which were accessible by other computer users via a P2P service."

 

He compared the action to a photocopy machine in a library. "I cannot see a real difference between a library that places a photocopy machine in a room full of copyrighted material and a computer user that places a personal copy on a shared directory linked to a P2P service," he said.

 

The ruling sent shock waves through the industry and surprised copyright analysts.

 

"It raises questions of the viability of suing individual users in Canada under current Canadian copyright law," said Michael Geist, a professor at the University of Ottawa specializing in Internet and e-commerce law and technology counsel with the law firm Osler, Hoskin and Harcourt.

 

Geist, who called the decision "stunning," anticipates it will push the industry to increase its lobbying efforts for copyright reform in Canada.

 

Last month, the industry association took five Internet service providers to Federal Court, trying to force the companies to hand over the names and addresses of 29 people who allegedly shared hundreds of songs with others using programs like Kazaa last November and December.

 

The judge denied the recording industry's request, which means the five high-speed Internet providers — Bell Canada, Shaw Communications, Telus Communications, Rogers Cable and Videotron — won't have to divulge their client lists.

 

Without the names, CRIA can't begin filing lawsuits against 29 John and Jane Does who it alleges are high-volume music traders.

 

They're currently identifiable only through a numeric Internet protocol address and user handles like Jordana(at)KaZaA.

 

All the ISPs except Videotron have fought the order. Videotron had agreed to comply because owner Quebecor is also concerned about piracy in other parts of its business, which includes newspapers, television, Internet services and CDs.

 

Source: The Toronto Star

[Slayer 0]

Was Nietzsche right?

Yes he was

 

...wait, what's this about CDs?

[Dr. Tom 0]

It's interesting that the decline in record sales directly corresponds to the RIAA's murder of Napster. Napster actually exposed people to music they never would've heard otherwise, and at its height, was improving sales. Since Napster was snuffed, though, sales have fallen. Post hoc ergo propter hoc? Perhaps, but it's worth noting.

 

The RIAA needs to embrace the digital model or die.

[Guest MikeSC]

It's interesting that the decline in record sales directly corresponds to the RIAA's murder of Napster. Napster actually exposed people to music they never would've heard otherwise, and at its height, was improving sales. Since Napster was snuffed, though, sales have fallen. Post hoc ergo propter hoc? Perhaps, but it's worth noting.

 

The RIAA needs to embrace the digital model or die.

You know, I think we ALL need to embrace others soon --- for the kids.

-=Mike

[NoCalMike 0]

It's interesting that the decline in record sales directly corresponds to the RIAA's murder of Napster. Napster actually exposed people to music they never would've heard otherwise, and at its height, was improving sales. Since Napster was snuffed, though, sales have fallen. Post hoc ergo propter hoc? Perhaps, but it's worth noting.

 

The RIAA needs to embrace the digital model or die.

Well the RIAA only seems concerned with sales from the major record companies, and file-sharing is/was a major tool for independent/obscure artists, so naturally if exposure to indy/hard to find artists is choked and killed, then overall record sales will go down, and people will be back to being forced to rely on MTV/FM radio for their music. That is all the RIAA was really interested in doing anyway methinks.

[2GOLD 0]

Gee, the decline in music sales couldn't be because every band sounds like every other band and every rappers now seems to SOUND like every rapper.

 

What? That new Clay Aiken CD didn't clean up so obviously everyone downloaded the album?

 

It's amazing how bands who are "heavy downloads" and popular aren't hurting for record sales. Maybe that's because people BUY the good music and leave the crappy bands on the shelf?