Is the RIAA right about p2p?
2pnet.net News:- The multi-billion-dollar Big Four Organized Music record labels say people who share music with each other online are directly responsible for drastic losses in revenues, with spokespersons sometimes using the word “devastation” to colour the claims.
This, say the Big Four through such as their RIAA (Recording Industry Association of America), means the millions of men, women and children who use the p2p applications and networks to share are criminals and thieves and, thus, it’s acceptable to drag them through civil and criminal courts, depending on where they live.
Warner Music, EMI, Vivendi Universal and Sony BMG have never been able to demonstrate how a file shared equals a sale lost but with the might of the mainstream media behind them, they’ve transformed an allegation into a virtual fact, meaning thousands of families and individuals have had, and are having, their lives devastated.
Now, for the first time, a study uses data gathered by the Consumer Expenditure Survey (CEX) to examine the theory, says Ars Technica.
Norbert Michel’s The Impact of Digital File Sharing on the Music Industry: An Empirical Analysis taps data collected from 1995 through 2003, says the story, going on that Michel, “wanted to see if there’s a link between owning a computer and decreased CD buying during those years. It turns out that there is. During 2002 computer owners’ CD sales decreased by $4.79 a year, and by $5.55 in 2003. Those without computers only decreased by $0.80 and $0.22, respectively.
“On the other hand, in 2001, the year that Napster closed, people with computers increased their CD buying by 19 percent while non-computer owners held steady. Could the decrease in CD buying the following two years be chalked up to increased sales of digital downloads, which started to become popular just at that time? The paper does not address the question.”
But Michel’s methodology, suggests people with a computer, “bought almost 13 percent fewer CDs from 1999 to 2003, with those who bought the most music showing the largest decrease,” says Ars Technica. “His conclusion is that file-sharing does have an effect on music sales, a conclusion shared by Zentner (2005), Hong (2004), Liebowitz (2004), and Rob and Waldfogel (2004).”
However, Michel, “notes that Oberholzer and Strumpf (2004) found no correlation between file-sharing and P2P use in 2002, and a more recent paper by a Harvard student found that file-sharing benefited more obscure artists,” says the story.
In The Effect of File Sharing on Record Sales: An Empiral Analysis, Harvard`s Felix Oberholzer-Gee and Koleman Strumpf from the University of North Carolina say there’s no statistical relationship between file sharing and sales.
Meanwhile, “The dominant impression gained from reading these studies is that finding accurate correlations between file-sharing and loss of revenue for the music industry is tremendously difficult,” says Ars Technica, adding:
“Michel points out, for instance, that his data would be better if it focused only on broadband users – but such data was not available for the time period he wanted. And then, of course, having a broadband connection is not the same as using it extensively, or even for using it at all for P2P. And of course it would be nice to know exactly how many copyrighted songs each particular household downloaded using such software, but this number too is almost impossible to get.
“Despite the sophisticated regression analyses and economic modeling done by these authors, the initial data points are not ideal starting places for this sort of analysis. And academic papers are unlikely to sway those who have either made up their minds on the issue or simply want to justify behavior they think should be legal.”
Also See:
Ars Technica – Does file-sharing hurt the music biz?, September 26, 2006
no statistical relationship – P2p file sharing heretics, April 8, 2004
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September 27th, 2006 at 3:14 pm
“But Michel’s methodology, suggests people with a computer, “bought almost 13 percent fewer CDs from 1999 to 2003,”
And the only possible reason for that is because the share files ?
What about streaming ??
What about locating independent acts that they may PREFER ?
What about PC gaming ?
The PC is a pretty wide entertainment platform, that could affect
cd purchasers in MANY ways that have nothing to do with file sharing.
To suggest that because pc owners MAY purchase fewer CD’s is
only because of P2P is a pretty flawed conclusion.
Seems to me someone got a good paycheck to arrive at this.
September 27th, 2006 at 4:16 pm
What about they used the money normally used for Cd’s to purchase THE COMPUTER?
Hell, I’ve never really had much ‘extra’ cash to spend on cd’s, but if you ask my wife, she’ll tell you that I’m always spending money on my computer.
September 27th, 2006 at 6:11 pm
To understand why the study is flawed, let us consider all the areas where there is no reliable statistical data.
1. Copying and sharing became a wide phenomena when cassette recorders and tapes became available. As a result many huge music collections were buit on cassette tapes. How much of this prevented growth in sales of phonorecords or if ithelped growth and how much, no one knows.
2. The quality of music has dropped greatly in the past few years. How much of this has prevented growth in sales of phonorecords (now CDs) or if it helped growth and how much, no one knows. Surely many people do like the inferior product that is being served. Payola does work.
3. There are currently may ways of copying and sharing that have nothing to do with p2p, for example on blank CDs.
4. Daily, there are new record companies appearaing and old ones closing dow. Also new records introduced and old ones mede no longer available. Does anyone know how this has influenced total sales?
5. Almost all copying and sharing media is foreign made and how much is imported, no one knows.
6. How are sales statistics manipulated (doctored, if you may) so as not to pay songwriter royalties? I personally think the doctoring is big.
In the end, no one but RIAA cares about the sales and profits of the record companies. If 99 percent of the population do not care, the the subject is politically moot.
Rafael Venegas
http://www.gvenegas.com