Report claims illegal downloads have zero effect
Researchers at Harvard Business School and the U. of North Carolina have just completed the first direct study of file sharing’s impact on CD sales and the news isn’t good for the RIAA.
Contrary to claims by the music industry, the new paper finds that the effect of illegal downloads on sales is “indistinguishable from zero.”
While partisans on both sides of the P2P battle have wielded statistics derived from polls, study is the first of its kind to measure the impact of download traffic on sales.
While the overall impact of file sharing on sales was found to be negligible, researchers discovered that for the most popular albums, piracy has a slightly positive effect on sales, with the opposite true for poor sellers.
“Our interpretation of this is that the old radio model is very much alive,” said co-author Felix Oberholzer, an associate professor at Harvard Business School. “It turns out the impact of the Internet is similar to that of singles on the radio. The good news for the music industry is they can actually create value through file sharing.”
Pre-iTunes study
Study was conducted in fall 2002, before the launch of digital music stores like iTunes and the RIAA’s lawsuits, both of which have likely affected P2P traffic, if not the relationship between it and sales.
Findings are a blow to the RIAA, which has long argued that piracy is largely responsible for the approximately $2 billion annual decline in music sales since 1999. Organization responded to the new study by pointing to previous analyses, which relied primarily on individual interviews.
“Countless well-respected groups and analysts, including Edison Research, Forrester and the University of Texas, among others, have all determined that illegal file sharing has adversely impacted the sales of CDs,” an RIAA representative said. “Our own surveys show that those who are downloading more are buying less.”