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March 29, 2004
New UNC Study Finds File-sharing Has No Effect on CD SalesEmail This EntryPrint This Entry
Posted by Jason Schultz

An interesting new study from Harvard and UNC economists finds that file-sharing may not, after all, significantly affect CD sales:

A longstanding economic question is the appropriate level of protection for intellectual property. The Internet has drastically lowered the cost of copying information goods and provides a natural crucible to assess the implications of reduced protection. We consider the specific case of file sharing and its effect on the legal sales of music. A dataset containing 0.01% of the world's downloads is matched to U.S. sales data for a large number of albums. To establish causality, downloads are instrumented using technical features related to file sharing, such as network congestion or song length, as well as international school holidays. Downloads have an effect on sales which is statistically indistinguishable from zero, despite rather precise estimates. Moreover, these estimates are of moderate economic significance and are inconsistent with claims that file sharing is the primary reason for the recent decline in music sales.

Local news coverage here.

Category: IP Markets and Monopolies

Scott Matthews on March 29, 2004 07:46 PM writes...

The "file-sharing doesn't hurt CD sales" meme strikes me as pretty silly.

I mean, we're all technologists right? Don't we believe in the triumph of the network, even if it is a gradual process?

Point is, unregulated file-sharing obviously eventually comes at the expense of CD sales, and even more so, at the expense of sales of digital downloads.

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A. C. on April 7, 2004 01:26 AM writes...

I find it hard to agree with a highly generalistic comment such as the one posted by Mr Matthews, especially with no research data to back it up. It is essentially a question of economics, necessarily involving mass behaviour. I download music and if I like it (which occurs more often than not) I buy it to support the artist. How can anyone possibly know whether most filesharers share my motives, unless a quantitative study such as the one to which this article alludes is conducted?
There are simply too many relevant psychological factors in this case to make any unqualified "prima facie" remark with any degree of accuracy.

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