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CRIA Trying to Debunk Industry Canada’s Pro-P2P Study

CRIA Trying to Debunk Industry Canada’s Pro-P2P Study

Industry Canada-commissioned study found that “P2P file-sharing tends to increase rather than decrease music purchasing,” but the Canadian Record Industry Association has released a study that claims that the opposite is true, that P2P decreases overall music sales.

Back in 2007 Industry Canada, a ministry of the Canadian federal government, released the results of an independent study it commissioned on the effects of illegal downloading entitled “The Impact of Music Downloads and P2P File-Sharing on the Purchase of Music.”

Conducted by Birgitte Andersen and Marion Frenz of the Department of Management at the University of London in England, the study made the startling conclusion that there is a positive correlation between file-sharing and music sales.

“Our review of existing econometric studies suggests that P2P file-sharing tends to decrease music purchasing,” said the study. “However, we find the opposite, namely that P2P file-sharing tends to increase rather than decrease music purchasing.”

The study angered the Canadian Record Industry Association (CRIA) which has fought a bitter battle to discredit, so far unsuccessfully, the study ever since.

Enter the latest and greatest attempt released by the Canadian Intellectual Property Council (CIPC) and entitled “The True Price of Peer to Peer File-Sharing.” Dr. George Barker, director for the Centre for Law and Economics at the Australian National University, took a “closer look” at the survey data gathered by Industry Canada and believes he has a different conclusion.

“Without access to peer to peer file-sharing, even the hardest core downloaders, the ones who normally don’t buy any legal music at all, say they would go legal”they would buy a third of the music they previously downloaded, from legal sources,” explains Barker. “That means that copyright reforms that reduce access to P2P sites would not only increase music sales, but would support artists and other professionals in the recording industry and boost government revenues as black market activities return to mainstream commerce.”

Barker concludes that P2P in fact “harms” legal music sales and, that if people no longer had access to it (?), 75% of illegal file-sharers would then purchase music legally. He says that “hardcore” downloaders who only use P2P to acquire music would legally purchase one third of their music if P2P were not available

First off, I’m not sure how he plans to remove P2P access entirely being that it’s most simplest form, email attachments, would prevail in all but the most draconian of legislative efforts.

Secondly, Birgitte Andersen, one of the co-authors of the original study Barker’s trying to debunk, has already discussed how P2P increases music purchases.

She divided the reasons for sharing music freely as follows:

• Market substitution effect: We found with statistically significance that people download some music freely as they are unwilling to pay.

• Market creation effect:  In particular, we also found with statistically significance that people engage in P2P file-sharing because they explore, and this leads to subsequent purchases due to a ‘hear before buying’ effect.

• Market creation effect:  Another statistically significant market creation effect is that people look for music which is ‘not available elsewhere’ (e.g. in the mainstream outlets) boosting new markets.

• Market segmentation effect: Another reason for people to engage in P2P file-sharing is that people are ‘wishing to not to buy ‘whole album’’, but prefer the single digital file.

“Overall, we found that the increase in music purchases of more active P2P file-sharers is explained by the fact that the significant ‘market creation effect’ of P2P file-sharing outweighs the significant ‘market substitution effect’, where people download music freely as they are unwilling to pay,” she wrote in a rebuttal last year.

Barker seems to be suffering from what Anderson called a “misguided obsession” on the substitution rate of P2P since he is clearly, as she puts it, “ignoring the market creation effect.”

Using his conclusion that three out of four people who download some or all of their music using P2P say they would purchase music if P2P were inaccessible, he goes on to claim that this translates into hundreds of millions of dollars of increased music sales.

There’s no mention of how he came to a different conclusion than that of Andersen and Frenz, but there appears to be no consideration of the “market creation effect” that Anderson speaks of. In fact, there’s no admission that P2P can have any positive effect whatsoever.

Stay tuned.

[email protected]

[Hat Tip]

Jared Moya
I've been interested in P2P since the early, high-flying days of Napster and KaZaA. I believe that analog copyright laws are ill-suited to the digital age, and that art and culture shouldn't be subject to the whims of international entertainment industry conglomerates. Twitter | Google Plus
Anonymous
Anonymous

The problem is thus; a CD is downloaded here in 13 seconds. There is nowhere I can buy it at a good price and have it down that fast. It is an outrage that even today, one cannot simply go to a record company site, and download/stream some files, browse an archive and have a cheap time of it. I would gladly pay Universal Records five pounds if I could browse their site. Saves me going to Youtube.

Aerilus
Aerilus

"the ones who normally don’t buy any legal music at all, say they would go legal—they would buy a third of the music they previously downloaded, from legal sources,” one of the things you should learn in school is statistical significance When i read this statement i take it to mean that there was a poll and people said that if they could not get music by downloading it they might buy it and some people said yes that's great but you have provided absolutely no proof especially that people would buy a third of what they download. i don't think he understand how fast and easy it is to download music. a cd will run you 10-20USD it can be downloaded in 320bbs MP3 in around 10-30minte with half way decent bandwidth and only take minimal user intervention. people accrue massive amounts of music by downloading it off limewirei should know i clean up there computer after they infect them by doing it. buying a third of the music that they download would easily mean that they are spending thousands if not tens of thousands of dollars on music that is not practically possible.

James
James

One thing I find interesting that they don't ever include is that some people buy an album but leave it somewhere where they can't rip it to the computer so they download it instead.

wash
wash

I think what it is, is that 75% of those forced to purchase would be locked in marketable genre groups. no more needing to innovate then. You fail to see the point "aerilus". Some people like to support good artists. if its OOP how come the right to copy is still withheld?



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