Article...
Don't Blame Kazaa
by DAMIEN CAVE
A controversial new study by economists at Harvard and the University of North Carolina has found that file-sharing is not the cause of declining CD sales. Researchers spent a year and a half analyzing downloads and sales figures 680 albums - and what they found contradicts the record industry's claim that online piracy has led to a fifteen percent decline in sales since 2000.
"No matter how we use our statistical models, we cannot find a connection between decreased sales and downloads," says Felix Oberholzer-Gee, co-author of the report and a professor at Harvard Bussiness School. "If you want to understand why sales have changed as dramatically as they, do not look to file-sharing."
The fifty-one-page study - arriving six days after the record industry sued another 532 file sharers - is the most regorious economic analysis available. It tracks downloading spikes and declines that are caused by factors unrelated to a song's popularity uses the ebbs and flows to analyze file-sharing's impact on CD sales. "If it were true that increases in downloads decreases sales, we should see that whenever we have fluctuations in downloads, we would have fluctuations in sales," Oberholzer-Gee says. "That's not what we've found." Sales of topselling albums such as the 8 Mile soundtrack, for example, did not decrease after several downloading spikes caused by factors such as Internet congestion and increased uploading from German students on vacation, according to the report. (Forteen percent of music downloads occur in Germany; more than half take place outside the U.S.)
The research also supports the idea that most people download music that they wouldn't buy anyway. And, says Oberholzen-Gee, "the Internet is more like radio that we thought. People listen to two or three songs, and if the like it, they go out and buy the CD."
The record industry rejected the report immediately. "It flies in the face of reality," says the anti-piracy laywer at one of the major labels. "All you have to do is ask a few college students to find out that they're buting less music." College students, in fact, have become a prime industry target: Eighty-nine of the alleged violators in the most recent round of cases were caught on university networks. Twenty-one schools ranging in prestige from Georgetown and Stanford to California State, Northridge, were caught in the net. And according to the recording industry Association of America, the strategy will continue: Every few months, about 500 cases will be filed, with people randomly pulled from services such as Kazaa. "We're not necessarily targetting university networks, but we want to send a strong message," says Stan Pierre-Louis, the RIAA's executive vice president of legal affairs. "Everyone will face consiquences if they violate copyright."
Two of the researchers that have done their own studies on file-sharing also criticized the report. Josh Bernoff, an analyst at Forrester, a technology research firm, and Stan Liebowitz, a University of Texas economist, say that the Harvard-UNC study is flawed partly because it focuses too narrowly on the holiday seasons. Gift buying in late December skews sales upward, they argue, underminding the damage that downloading might do.
But, says Oberholzer-Gee, "we excluded the holiday season and didn't find a different result." And while critics continue to question the study's methodology, Oberholzer-Gee says that the conclusions are irrefutable. "We did all the tests we could to make sure that it was robust, and it is," he says. "What I find bizarre is that this is five years after file-sharing started, and we're the first people to do a sensible study. Wouldn't most industries do this before starting lawsuits? This should have been done years ago."
|*END*|
Article can be found in this months issue of Rolling Stones.
First off, I want to say that Oberholzer-Gee is the kewlist name I've ever heard! Second, if it wasn't for file-sharing, I would've never heard of a lot of bands that I now love. I download bands I've never heard to see if they're any good or not. If they are, when I have money I buy the CD. So yes, it is a lot like radio.
I think all these lawsuits are incredibly stupid. And if I ever get sued, I will never buy another CD, haha.