Digital Journal — The music industry should stop whining. Contrary to its claims, illegal downloads haven’t crippled music sales, according to a new study.
In the Journal of Political Economy, a report titled “The Effect of File Sharing on Record Sales: An Empirical Analysis” tracked the effects of 1.75 million song downloads on 680 different albums sold during the final four months of 2002. The researchers concluded that file-sharing affected no more than 0.7% of sales during those months.
“Using detailed records of transfers of digital music files, we find that file-sharing has had no statistically significant effect on purchases of the average album in our sample,” the study reports.
With one billion illegal tracks traded monthly, online piracy has often been blamed for decreasing CD sales but this report flies in the face of the record industry’s chief complaint. What’s the big problem then?
Some look at how the music industry focuses on units shipped rather than units sold — reducing inventory means big-box retailers don’t want unsold stock flooding bins so they order fewer CDs.
Also, the report highlighted how increased DVD sales might have swayed customers away from CDs. After all, people only budget so much for entertainment.
Hopefully, the journal’s study will reinforce the importance of tweaking the music-distribution model of yesteryear. Pirates are now becoming partners: Universal, Sony BMG, and Warner Music have all signed deals with YouTube in order to let users access legal streaming videos.
“The record labels are saying on the one hand it’s piracy so we’ve got to provide protection,” Jon Diamond, chief executive of ArtistDirect, told Reuters. “But on the other hand, it’s their audience and they want to figure out ways to monetize that audience.”
Only when the record industry accepts the digital age will customers actually respect calls to curb piracy. Until then, it’s a broken record of a deep-pocketed boy crying wolf, which is a scratched chorus everyone is tired of hearing.
