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Here we'll explore the nexus of legal rulings, Capitol Hill policy-making, technical standards development, and technological innovation that creates -- and will recreate -- the networked world as we know it. Among the topics we'll touch on: intellectual property conflicts, technical architecture and innovation, the evolution of copyright, private vs. public interests in Net policy-making, lobbying and the law, and more.

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March 28, 2005

The revenge of Sapir-Whorf

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Posted by Alan Wexelblat

One of the things the Cartel has most successfully done in this war is control the language, reporting, and thought around P2P music sharing.

One side effect of this is that there has been an almost complete shut-out of mainstream reporting on real research in the area. Why? I believe it's because every study that has been done since Napster has shown that music sharing has no negative effects on music sales (CD or downloaded). In fact, some show a positive effect. If that message got into the public consciousness the Cartel would be much worse off. Therefore, they've done all they can to frame the debate in terms of their scares, not science. So we have the scene - surely worthy of Beckett - in which a certified class of 27,000 songwriters and music publishers will argue against Grokster, as Tony Mauro put it on law.com "casting it as a life-or-death struggle over theft of their means of livelihood."

There's just one eensy weensy problem here - NOBODY's livelihood is being stolen. It's just not happening. There were no WMD in Iraq, there was no cocaine on that boat (*), and music sharing does not cost artists money.

How do we know this? Well, we do studies. Like, for example, the just-published Japanese study by Keio Universtity Economics professor Tatsuo Tanaka, who looked at the P2P application "Winny" and its effect on Japanese music consumers. Prof. Tanaka's original study is reported on here (Japanese HTML), but fortunately for people like me there's an English translation (17 page PDF).

In addition to a lack of negative effects, the study argues, there is evidence for a positive correlation between sharing music and purchasing more new music. Not terribly surprising, if you've been paying attention over the last half dozen years and not been deafened by the drums of the other side. Sadly, just about nobody has been paying attention. We've been soundly defeated in the propaganda war. Here's hoping Tuesday goes better.

(*) The Usual Suspects reference, in case you were wondering

Comments (12) + TrackBacks (0) | Category: IP Markets and Monopolies


COMMENTS

1. Scote on March 28, 2005 4:48 PM writes...

It is fascinating how the RIAA frame the p2p argument. When CD sales are down, they blame p2p. When CD sales are up, the blame p2p for sales not being higher.

Studies have consistently shown that people have more entertainment options and don't spend as much on any single one as they used to. The RIAA and MPAA consistently ignore this evidence in their arguments.

Neither the RIAA nor the MPAA are entitled to have new laws written to artificially boost their business model at the expense of our constitution and its explicit limitations of copyright terms.

Permalink to Comment

2. jMHz on March 28, 2005 6:40 PM writes...

Here is another excellent study, very rigorous and scientific with lots of charts and figures.

It is called "The Effect of File Sharing on Record Sales, an Empirical Analysis" - it concludes that "downloads have an effect on sales that is statistically indistinguisable from zero"

"The Effect of File Sharing on Record Sales, an Empirical Analysis" by Strumpf and Oberholtzer.

Fat Cats Feer the Long Tail !

They have to establish financial pain because if p2p activity is seen as having no financial impact on their copyright markets it will be tossed out of court.

It isn't about copyright infringement - it is about controlling the means of distribution.

On the SXSW clip of the Bram Cohen talk someone asked if they could distribute their indie movie via bittorrent or if p2p distribution was in itself illegal *sigh*.

People listen to more music than they own.

Permalink to Comment

3. Morosoph on March 28, 2005 8:32 PM writes...

Don't forget the BBC's "Talking Point" when "piracy" comes into the news. They reported a narrow study of (relatively poor) students, ignoring the behaviour of the earning population, but ignored the study by Strumpf and Oberholtzer at the time, quoting "downloads have an effect on sales that is statistically indistinguisable from zero" only in the context of a study purporting to refute it.

It is a shame that they're letting what "ought to be true" to teach people "not to steal" overwhelm the evidence, and such minor details as pre-selecting the population are not to be seen in their reporting.

Permalink to Comment

4. Neo on March 29, 2005 12:50 AM writes...

"Prof. Tanaka's original study is reported on here (Japanese HTML), but fortunately for people like me there's an English translation (17 page PDF)."

Unfortunately, there isn't an English translation you can read properly in your browser. Why is it PDF when the original is HTML?

Re: the 3rd comment and the methodologically unsound study -- misrepresentation and deliberate fraud are only to be expected from those fighting for their "right" to continue making a dishonest living.

Permalink to Comment

5. stu willis on March 29, 2005 1:48 AM writes...

"Why? I believe it's because every study that has been done since Napster has shown that music sharing has no negative effects on music sales (CD or downloaded)."

Except for the studies which show otherwise... like... e.g.

Peitz, Martin and Waelbroeck, Patrick, "The Effect of Internet Piracy on CD Sales: Cross-Section Evidence" (January 2004). CESifo Working Paper Series No. 1122. http://ssrn.com/abstract=511763

There are others, but this is a convincing, decently researced and balanced paper...

... and even if you don't agree with the paper, it shows that there are non-RIAA funded studies which show that piracy hurts CD sales.

I'm all for the copyfight, but I think its dangerous to deny that copyright infringement isn't hurting CD sales. Other studies* show that the most significant factor** in the reason behind people pirating via P2P is because the music is free. What, you think is it cost money to use Kazaa or BitTorrent it would still be popular? Very hard to compete with free. Of course, people tend to cite other reasons for their behaviour, but thats the whole banality-of-evil thang: people are very good at finding justifications for their behaviour.


* Such asGopal, Ram D., Sanders, G. Lawrence, Bhattacharjee, Sudip, Agrawal, Manish K and Wagner, Suzanne C, "A Behavioral Model of Digital Music Piracy" . Journal of Organizational Computing and Electronic Commerce, Forthcoming http://ssrn.com/abstract=527344
** Such as convenience, 'clubs', ethical attitudes vis a vis the RIAA.

Permalink to Comment

6. Julian Bond on March 29, 2005 2:22 AM writes...

Stu Willis: "It's very hard to compete with free". However, downloading is not free if you include the effort involved in assembling an album encoded as you like it with accurate tags and filenames. I think it was Steve Jobs who made this point and said that you pay yourself minimum wage to do this work. I'm convinced there's a price point somewhere around $0.10 per song or $1 per album where lack of hassle trumps free. So Free+effort = Cheap+easy.

At which point, see AllOfMp3.com. Treat music as a long tail business and digitise everything that's ever been recorded and make it available in this style.

Permalink to Comment

7. Java Black on March 29, 2005 8:59 AM writes...

If they are actually gaining, or at least not losing, from file sharing, it is important to question why the big guys are spending so much in fighting it. Could it be that the corporations see a new avenue opening up where new distributers can add some competition to the closed market? Obviously. I hate it when I have to talk like an economist.

Permalink to Comment

8. Dr. wex on March 29, 2005 11:00 AM writes...

All: thanks for the pointers. Good to have them.

Neo: I can't tell you what format the original is in - the reporting is HTML. Issuing reports in PDF is pretty common due to peoples' concerns over graphics and identity of on-screen and printed versions. YMMV, of course.

Stu Willis: I find the "it's free" argument disingenuous. I'm sitting at my desk typing this while drinking a bottle of Poland Spring water. Why did I pay money for water when I can get it for free? Because there's a perceived value that is worth the price. iTunes is creaming every other download service because Apple put some thought into the convenience and value. Why should I pay money for downloadable music? Because it's a pain to find things on KaZaa, because the software is spyware-infested, because it's a pain to configure and it's slow... on and on. "Free" is only one metric in a consumer's arsenal of considerations. That the Cartel haven't managed to emulate the bottled water people yet is only a testament to their unfitness to survive in a free market.

Finally on the substantive point, the Peitz and Waelbroeck paper is oddly self-contradictory. They claim that file sharing accounts for the drop in CD sales in 2001 but not 2002. That strongly suggests a statistical anomaly, no?

Permalink to Comment

9. Doctor Memory on March 29, 2005 12:40 PM writes...

Hey Alan. Not really disagreeing, but it's worth pointing out that the hassle factor of Kazaa is not at all an intrinsic quality of p2p music sharing systems, but a direct and deliberate result of the Cartel's assault on the original Napster. Napster-1 was lightyears more convenient to search and use (specifically in the area of finding well-tagged files), and had no spyware encumberances. But of course, Napster was buried in an avalanche of lawsuits, and the vacuum it left behind was predictably filled by a series of increasingly more consumer-hostile and legally shady players.

Permalink to Comment

10. Dr. wex on March 29, 2005 1:52 PM writes...

Hey Dr M - good to see you here. I think we're in vehement agreement, mostly. I used Napster 1, and Bearshare, and LimeWire, and a couple other programs. They've all had varying degrees of goodness and hassle. And I'm certainly aware that some of the current weaknesses are the result of Cartel legal intimidations. But the point is still that Apple is the first implementor I know of to really take a look at the weaknesses of current offerings and respond with improved user experience (e.g. first to drop the subscription fee and just let you go in and buy).

Permalink to Comment

11. steph on March 29, 2005 3:56 PM writes...

i just wanted to say that i have read through a few studies on this topic, and there is another interesting point that they all seem to be missing:

while most studies say that cd sales have been basically unaffected by file sharing, they don't mention the fact that people are accessing music they might not have heard of otherwise, and they are going to the concerts. and bands that are not on large labels now have a way for their music to reach the masses.

Permalink to Comment

12. stu willis on March 29, 2005 6:55 PM writes...

Thanks for all the feedback guys. I should point out that while its 'hard to compete with free', it isn't impossible. A lot of my research (of other people's research really) has been on the economics of piracy. e.g. exploring the basic idea that people purchase legitimate goods when the cost* of doing so is less than the cost of piracy. The new economic models of the future content-industry must understand these costs and realise that things like DRM can actually make pirated goods more attractive.

(What, so if buy software X I have to worry about a frigging dongle, but if I pirate it, I just use the crack and don't?)

It as, as Dr Wex points out, Apple that has really understood this and pushed the whole 'we need to compete with the pirates' mentality.

OTH:

"That the Cartel haven't managed to emulate the bottled water people yet is only a testament to their unfitness to survive in a free market."

Well, there are plenty of things which are unfit to survive in a free market, but which we, nonetheless, decide to protect legally and economically. (This is more true in Austraila, where I'm based, but even things like education in the US).

In fact, the whole basis - as you sure know - for copyright is that 'expressive goods' ARE unfit to exist in a free market. I still believe in that idea - probably because I work in a content industry** - but feel that copyright protectionism has gone too far.

* In a broad sense, which includes (as Dr Wex also points out) convenience, privacy, bandwidth, legal penalities etc. etc.

** As Warren Ellis said, its usually the people who don't try to make a living from art that think that art should be free.

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