“We find that file sharing has no statistically significant effect on purchases of the average album in our sample”
If you believe the record industry, file sharing is killing the music business. The industry is so sure unauthorized downloading is crippling sales that it has sued thousands of consumers in a campaign aimed at deterring music fans from continuing to share files.
But a first-of-its-kind study, conducted by two independent economists, concludes file sharing isn’t to blame for the steady decline in sales during the past several years.
“Downloads have an effect on sales which is statistically indistinguishable from zero,” write Felix Oberholzer-Gee of Harvard University and Koleman Strumpf of the University of North Carolina at Chapel Hill.
After years of emotional debate on both sides, it’s refreshing to see some objective data on the relationship between file sharing and sales.
In their draft report, Oberholzer-Gee and Strumpf don’t delve into the legal and ethical hornet’s nest surrounding sharing music files, only whether the practice adversely affects sales. The researchers analyzed nearly 1.8 million downloads over 17 weeks in fall 2002, then compared that data against music purchases during the same time using some incredibly complex mathematical formulas.
“We find that file sharing has no statistically significant effect on purchases of the average album in our sample,” they write in a draft. “At most, file sharing can explain a tiny fraction of this decline.”
Predictably, the Recording Industry Association of America is critical of the study and continues to blame file sharing for a significant downturn in music sales. The trade group says CD shipments have fallen from 939 million units in 1999, the year the original Napster swept the Internet, to 746 million units last year – a 21 percent decrease.
Oberholzer-Gee and Strumpf argue there are many plausible reasons for the sales slide, including the economy, fewer album releases, growing competition from other forms of entertainment such as DVDs and video games, a reduction in music variety stemming from consolidation in the radio industry, and a consumer backlash against record industry tactics.
The researchers’ 52-page draft is on Strumpf’s Web site.
More information about the industry’s campaign against unauthorized music downloads is on its Web site, www.RIAA.com
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