File swapping has ‘zero effect’
Oh what a tangled web we weave,
When first we practise to deceive!
- Sir Walter Scott (1771?1832)
p2pnet.net News:- Online file sharing is not responsible for the huge sales losses the RIAA (Recording Industry Association of America) and other Big Music trade organizations constantly report.
In fact, “Downloads have an effect on sales which is statistically indistinguishable from zero, despite rather precise estimates,” say Felix Oberholzer (Harvard Business School) and Koleman Strumpf (UNC Chapel Hill) in their empirical analysis The Effect of File Sharing on Record Sales.
“Moreover, these estimates are of moderate economic significance and are inconsistent with claims that file sharing is the primary reason for the recent decline in music sales,” they state
A couple of years back George Ziemann published ‘RIAA’s Statistics Don’t Add Up to Piracy’ and as he said then, “The RIAA is looking for pirates. They need to look in the mirror. The biggest threat to the recording industry is that they long ago dismissed as insignificant the two elements without which there would be no recording industry – the music and the artists.”
Over in Australia, the recording industry is reporting boom times.
Or rather, it isn’t reporting boom times.
Now, “file sharing has no statistically significant effect on purchases of the average album in our sample,” say Oberholzer and Strumpf.
This is, of course, diametrically opposed to Big Five record label claims that online p2p file sharing is directly responsible for plummeting sales and serious financial hardship for artists and support staff.
“At most, file sharing can explain a tiny fraction of this decline,” say the authors. “This result is plausible given that movies, software, and video games are actively downloaded, and yet these industries have continued to grow since the advent of file sharing.
“While a full explanation for the recent decline in record sales are beyond the scope of this analysis, several plausible candidates exist.”
Alternative factors include:
- Poor macroeconomic conditions
- A reduction in the number of album releases
- Growing competition from other forms of entertainment such as video games and DVDs (video game graphics have improved and the price of DVD players or movies have sharply fallen)
- A reduction in music variety stemming from the large consolidation in radio along with the rise of independent promoter fees to gain airplay
- And possibly, “a consumer backlash against record industry tactics”.
A similar drop in record sales occurred in the late 1970s and early 1980s, and record sales in the 1990s may have been “abnormally high as individuals replaced older formats with CDs,” emphasise Oberholzer and Strumpf.
Go here for a .pdf download.
March 30th, 2004 at 4:30 pm
it’s about time studies like this one get waved around in court cases.
Although i didnt understand the maths. There need be more studies based on, harder to dispute, maths than easier to dispute surveys.