Internet music piracy not only doesn’t hurt legitimate CD sales, it may even boost sales of some types of music.
Those were the counterintuitive findings released in March by Harvard Business School professor Felix Oberholzer-Gee and his co-author Koleman Strumpf, of the University of North Carolina at Chapel Hill. Their paper, “The Effect of File Sharing on Record Sales,” caused a ruckus in the music industry not seen since the British invasion of the Beatles.
Many recording executives were not singing “Yeah, yeah, yeah,” however. Convinced that illegal downloading and file sharing has robbed them of billions of dollars after four consecutive years of falling music sales, they criticized the team’s methodology, which consisted of monitoring 1.75 million downloads over 17 weeks in 2002, scouring through server logs from OpenNap (an open source Napster server), and comparing the sales of almost 700 albums as reported by Nielsen SoundScan. Oberholzer and Strumpf concluded that there was almost no relationship between the two.
How could this be? The researchers believe that most downloading is done over peer-to-peer networks by teens and college kids, groups that are “money-poor but time-rich,” meaning they wouldn’t have bought the songs they downloaded. In that sense, the music industry can’t claim those downloads as lost record sales. In fact, illegal downloading may help the industry slightly with another major segment, which Oberholzer and Strumpf call “samplers”—an older crowd who downloads a song or two and then, if they like what they hear, go out and buy the music.
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