[opendtv] News; Music sharing doesn't kill CD sales, study says
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Wed, 31 Mar 2004 13:21:47 -0500
Music sharing doesn't kill CD sales, study says
March 31, 2004 12:00am
Source: CNET Networks, Inc.
2004-03-29, CNET Networks: A study of=20
file-sharing's effects on music sales says online=20
music trading appears to have had little part in=20
the recent slide in CD sales.
=46or the study, released Monday, researchers at=20
Harvard University and the University of North=20
Carolina tracked music downloads over 17 weeks in=20
2002, matching data on file transfers with actual=20
market performance of the songs and albums being=20
downloaded. Even high levels of file-swapping=20
seemed to translate into an effect on album sales=20
that was "statistically indistinguishable from=20
zero," they wrote.
"We find that file sharing has only had a limited=20
effect on record sales," the study's authors=20
wrote. "While downloads occur on a vast scale,=20
most users are likely individuals who would not=20
have bought the album even in the absence of file=20
sharing."
The study, the most detailed economic modeling=20
survey to use data obtained directly from=20
file-sharing networks, is sure to rekindle=20
debates over the effects of widely used software=20
such as Kazaa or Morpheus on an ailing record=20
business.
Big record labels have seen their sales slide=20
precipitously in the past several years, and have=20
blamed the falling revenue in large part on=20
rampant free music downloads online. Others have=20
pointed to additional factors, such as lower=20
household spending during the recession, and=20
increased competition from other entertainment=20
forms such as DVDs and video games, each of which=20
have grown over the same time period.
Executives at file-sharing companies welcomed the=20
survey, saying it should help persuade reluctant=20
record company executives to use peer-to-peer=20
networks as distribution channels for music
The study, performed by Harvard Business School=20
associate professor Felix Oberholzer and=20
University of North Carolina, Chapel Hill=20
associate professor Koleman Strumpf, used logs=20
from two OpenNap servers in late 2002 to observe=20
about 1.75 million downloads over their 17 week=20
sample period.
That sample revealed interesting behavioral, as=20
well as economic, data. Researchers found that=20
the average user logged in only twice during that=20
period, downloading about 17 songs. Some people=20
vastly overshot that average, however--one user=20
apparently logged in 71 times, downloading more=20
than 5,000 songs.
The two professors narrowed their sample base by=20
choosing a random sample of 500 albums from the=20
sales charts of various music genres, and then=20
compared the sales of these albums to the number=20
of associated downloads.
Even in the most pessimistic version of their=20
model, they found that it would take about 5,000=20
downloads to displace sales of just one physical=20
CD, the authors wrote. Despite the huge scale of=20
downloading worldwide, that would be only a tiny=20
contribution to the overall slide in album sales=20
over the past several years, they said.
Moreover, their data seemed to show that=20
downloads could even have a slight positive=20
effect on the sales of the top albums, the=20
researchers said.
The study is unlikely to be the last word on the=20
issue. Previous studies have been released=20
showing that file sharing had both positive and=20
negative effects on music sales.
The Recording Industry Association of America was=20
quick to dismiss the results as inconsistent with=20
earlier findings.
"Countless well-respected groups and analysts,=20
including Edison Research, Forrester, and the=20
University of Texas, among others, have all=20
determined
that illegal file sharing has adversely impacted=20
the sales of CDs," RIAA spokeswoman Amy Weiss=20
said in a statement. "Our own surveys show that=20
those who are downloading more are buying less."=20
=2Eend (paragraph)<<CNET Networks -- 03/29/04>>
<< Copyright =A92004 CNET Networks, Inc. >>
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