Music Piracy Myth Exploded

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PIRACY NOT HARMING MUSIC BIZ

Internet music piracy is not responsible for declining CD sales, claim the researchers behind a major new statistical study.

Felix Oberholzer-Gee at Harvard Business School in Massachusetts and Koleman Strumpf at the University of North Carolina tracked millions of music files downloaded through the OpenNap file-trading network and compared them with CD sales of the same music.

The music industry frequently claims that illegal file-trading is responsible for reducing legitimate music sales. The industry says this argument is the reason for their legal campaign of suing individual file traders over the past year.

However, the researchers conclude: "At most, file sharing can explain a tiny fraction of this decline."

Automatic monitoring

Oberholzer-Gee and Strumpf monitored 680 albums, chosen from a range of musical genres, downloaded over 17 weeks in the second half of 2002. They used computer programs to automatically monitor downloads and compared this data to changes in album sales over the same period to see if a link could be established.

The most heavily downloaded songs showed no decrease in CD sales as a result of increasing downloads. In fact, albums that sold more than 600,000 copies during this period appeared to sell better when downloaded more heavily.

For these albums each increase of 150 downloads corresponded to another legitimate album sale. The study showed only a slight decline in sales as a result of online trading for the least popular music.

"From a statistical point of view, what this means is that there is no effect between downloading and sales," say Oberholzer-Gee and Strumpf.

Adverse impact

The Recording Industry Association of America (RIAA), which represents the world's largest record companies, point to a number of studies suggesting a between declining record sales and the growth of illegal file-trading.

For example, a series of surveys conducted by Houston-based company Voter Consumer Research have indicated that those who download more songs illegally are less likely to buy music from legitimate retailers.

"Countless well respected groups and analysts have all determined that illegal file sharing has adversely impacted the sales of CDs," says RIAA spokeswoman Amy Weiss.

But at least one other survey has already suggested precisely the opposite. And the new UNC study differs from previous work in its focus on individual album sales and its large scale. During the data gathering stage, the researchers tracked a total of 1.75 million downloads, or 10 per minute on average.