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Terrence Maxwell has a new article in First Monday (Is Copyright Necessary?) attempting to model the effects of different copyright policies historically and into the future (e.g. authors wanting high-protection copyright vs. the public wanting low-protection copyright). His models are fairly abstract and complex (see image below), but his results are interesting:
As indicated in the table, the desired policies of authors, publishers and public domain advocates produce very different outcomes in a 100–year simulation, some of which run counter to the protagonists’ stated goals. For instance, while the authors’ position led to the largest number of authors, it also generated the lowest sales figures, and the fewest number of volumes published. This indicates that the demand for new volumes from authors was the lowest among the three options, and points to a greater level of competition among authors seeking publication. Similarly, while the reader position generated the highest level of sales, the greatest number of different volumes, and the lowest cost for books, it also severely constrained the number of authors. This means that while a greater number of volumes would be available, diversity in authorship would be curtailed. This, in turn, would tend to diminish the likelihood of variety in information products.
Fellow Copyfight author Wendy Seltzer has a new Legal Tags post responding to the news that TiVo and ReplayTV have agreed to hobble their products with digital rights management (DRM). Therein, she compares and contrasts the story the entertainment industry tells about DRM with what history teaches:
The story, as these entertainment producers tell it, is that without DRM, no recording at all would be permitted of pay-per-view. Or, if they couldn't control the tech to stop consumer recording, they wouldn't even broadcast some content in the first place...In that case, individuals are left with the choice between DRM-encumbered content and none at all.
Would mass entertainment cease to be if mass producers couldn't restrict the choices of their audiences? No, no more than musical composition stopped when courts ruled that the piano roll wasn't an infringing reproduction or sound recording stopped when audio artists had no public performance right. Scrappy upstart technology companies disrupted the business of producing music, but when producers couldn't control the technologies of distribution, they changed their business models instead.
So what do we do about this? There's been plenty of discussion about, though little movement toward, building a "GeekPAC." But Wendy reminds us that there's a simpler, more direct route to influencing the industry: refusing to purchase DRM-hobbled products:
Too much of the public is willing to sell out the benefits of competition and creative destruction for the shorter-term promise of entertainment content. If we could instead commit ourselves to rejecting DRM, we'd force the entertainment industries to a test of whether they'd really shut down rather than offering open content, and we'd leave room for innovation in the creation and delivery of mass entertainment content.
Fred von Lohmann @ Deep Links:
As we reported last week, Microsoft's new music download store, MSN Music, advised its frustrated iPod-toting customers to simply burn their purchases to CD, then rip them to an open format like MP3. That way, they could play their MSN Music downloads on their iPod (or any other device) without having to worry about the incompatibilities created by Microsoft's platform-specific DRM restrictions.
Of course, that was too good to last. According to Salon, senior Microsoft honchos decided to have that bit of tech support advice pulled off the website.
I don't know whether Microsoft did it under pressure from the record labels, or whether out of a desire to maximize platform lock-in, but I do know it wasn't to benefit Microsoft's customers, the people actually expected to be paying for the MSN Music downloads. Chalk this up as another anti-competitive, anti-consumer use of DRM.
'Unfortunately Apple refuses to support the popular Windows Media format on the iPod, choosing to only support their own proprietary DRM format. If you are an iPod owner and are unhappy about this, please send feedback to Apple and ask them to change their policy and interoperate with other music services. There are more than 70 portable audio devices that support MSN Music today, and we hope that someday Apple decides to join with the industry and support consumer choice.'70 devices: wow! I mean, Microsoft has picked them all out for me ahead of time, probably put a little red bow on them, too. What would I need interoperability and independent consumer choice for when Microsoft can shepherd me to approved devices?"
Writes Fred von Lohmann @ Deep Links: "Tech support for Microsoft's new MSN Music service is responding to the incompatibility between its downloads and the iPod by advising its customers to burn the downloads to CD, then rip the CD to a compatible format...Now that's what I call freedom of music choice, in contrast to Real Network's misleading campaign of the same name."
Even as the FCC and consumer electronic companies try desperately to push Americans toward HDTV, one Washington Post reviewer joins the crowd throwing up hands at the complexity of it all. Parts don't interoperate well, even once you've upgraded for high-res, and worst of all, that's on purpose:
[T]he link from cable box to D-VHS remains troublesome -- by design. Thanks to an industry agreement, a high-def program can be copied from Comcast box to D-VHS only once. If you stop halfway and try again from the start, a "copy flag" prevents it.
In other words, consumer electronics manufacturers have so far capitulated to the demands of greedy copyright owners that they've built extra failure modes into their devices. It's not enough that the picture might pixellate due to weak signal or bad connections, the industry must punish its best customers (those who have just spent thousands on HD-capable equipment) by breaking perfectly reasonable personal use patterns. Of course, if you're sick of being treated like a thief, you might try an open-source MythTV-based HD-PVR.
John Borland @ CNET: 'Plays for Sure' Means Microsoft's Inside: "Microsoft is planning a new branding campaign similar to 'Intel Inside' for its Windows Media audio and video technology, hoping to highlight the near-ubiquity of its multimedia technology, sources familiar with the plans say."
Derek Slater: With DRM and the DMCA, Nothing Plays for Sure: "With DRMed digital media, backed by the DMCA, nothing plays for sure. Please, somebody start THAT campaign, rather than playing these silly games. Your digital media is forever tethered to the DRM owners and relevant copyright holders. Your digital media plays the way they say it can be played, that's for sure. But you will never truly be able to use your digital media however you want on whatever device you want - we will never see true interoperability."
RealNetworks put Fred von Lohmann criticizing Apple's FairPlay on its "Freedom of Music Choice" campaign website homepage. But something tells me it may decide to veto Fred von Lohmann criticizing Real's undistinguished record on promoting choice via interoperability.
If Real actually cared about "Freedom of Music Choice," it would be telling its customers to burn the downloaded music they purchase to CD, then rip to any DRM-free format they like (including MP3, WAV, or AAC, all of which play just fine on the iPod). That's a much better option than being dragged into a feud between Apple and Real.
Meanwhile, Real's record for promoting the "healthy, open competition" made possible by reverse engineering for interoperability is less than inspiring. Consider, for example:
- In the RealNetworks v. Streambox case, Real was among the first litigants to invoke the DMCA to squash a competitor trying to interoperate with Real's proprietary streaming software.
- Real's own end-user licenses expressly forbid reverse engineering, even where that activity would be lawful as a fair use.
- Real has been conspicuously silent when it comes to legislative reforms, like H.R. 107, that have been introduced to reform the DMCA to permit legitimate reverse engineering.
Tim Wu has yet another excellent post over at the Lessig Blog, this time on the "Loser's Paradox" -- e.g., the affinity the U.S. government has for ailing business sectors.
"[T]here's not much a conceptual difference between something like the Induce Act on the one hand, and the farm subsidies for corn on the other," writes Wu. "Each case features an industry that desparately wants to slow the arrival of more competitive rivals. And each are in truth, slowly dying industries whose ongoing decay poisons our economy."
Equally excellent and apropos: Wu's Digital Audio and the Copyright Gap and Copyfight co-author Ernie Miller's Senators Put Copyright Office in Charge of Finding INDUCE Act (IICA) 'Consensus' by Sep 7. Don't miss them.
NYT: "RealNetworks plans to announce on Tuesday that it is putting its digital music offerings on sale at half price as part of an aggressive strategy to force its way onto Apple Computer's popular iPod digital music player.
Mr. Glaser acknowledged the company would not benefit directly from selling music at a loss, but he said that he believed that it would help force Apple to change its policy about licensing the iPod to play music from competitors."
Later: Engadget: "Hoping to get a little people power on their side in their battle to try and get Apple to open up the iPod to downloads from their online music stores, RealNetworks launched a 'Hey Apple, Don't Break My iPod' online petition which quickly turned against them and filled up with such witty anti-Real chestnuts as, 'REAL CRAP. rob you are a loser!' and 'If you guys dare to touch my iPod!! Oh Boy…! Im so going to rip out your....' They ended up removing the link from their site and put up another one which only lists people's names and nothing else."
Later #2:Fred von Lohmann: "In the latest development in the ongoing spat between
RealNetworks and Apple over the iPod, RealNetworks has launched its 'Freedom of Music Choice' campaign. 'Consumers are getting a raw deal with the status quo in digital music, which limits healthy, open competition that drives down prices and encourages innovation,' trumpets the campaign website.
Lovely sentiment. We couldn't agree more. But it's not as if Real is doing anything to change that status quo. After all, Real keeps its customers in DRM shackles that look pretty similar to Apple's FairPlay. In fact, Real's beef with Apple is really about keeping those shackles on its customers when the move songs to the iPod."
It's always interesting when guests blogsit for Larry, and Rep. Rick Boucher is no exception. Check out the lively discussion of compulsory license schemes in the comments over on Lessig Blog.
Cory Doctorow, on Siva Vaidhyanathan's new article on using technological "tethers" to force customers into using your products, your whole line of products, and nothing but your products: "It's easy to understand why hardware companies love tethering -- it's a license to screw their locked-in customers out of titanic sums of money -- but that's exactly why smart customers need to reject tethered products."
Dan Gillmor, on his decision to stop purchasing iTunes: "Threats to use copyright law against Real are exactly what you'd expect, unfortunately. Apple wants control over online music, and this is just part of the game.
What we customers want is cross-platform compatibility: standards. What the companies want is lock-in. They may win, but they're only locking me out -- because I won't play by those rules. Which means I've bought my last iTunes Music Store song until Apple starts paying more attention to what its customers want."
The Register runs an interesting meditation on Apple's DRM strategy (DRM begins to work its magic). The article basically accuses Apple of playing the ol' "format upgrade - buy everything over again" game:
"Wouldn't it be great if you could take a dozen of your favorite songs with you," [on your cell phone] Jobs told the crowd.Actually, I don't really agree with all of the Register's analysis, but it is something to consider.
Wouldn't it, just? For millions of users however this is already a reality. Much like a burglar giving the burgled householder first opportunity to buy their own stuff back, Apple is promising a right we already enjoy as a bonus. An innovation, even...."If people accept [DRM], the logic for the music industry is to apply the wonders of the Internet to the old vinyl-tape-CD upgrade gag, and to start selling different versions of playback rights (want a shedload of one-time play music for tonight's party? we can do that for you)," wrote John Lettice.
Having set the bar so low at 128kbps encoding - and the price at 99 cents per song, so high - one of the premiums that the music industry will now be able to offer is 'fair use'. In order to get the public to accept this proposition they must first forget that they ever had the right to make a copy of music they'd bought. And that's the true significance of today's announcement.
The New York Times reports that the the 9/11 Report has been "a royalty-free windfall" for publisher Norton.
"The 9/11 Commission Report," the final report of the National Commission on Terrorist Attacks Upon the United States, has remained at the top of the best-seller lists at online bookstores since its release last Thursday.
The report is topping the Amazon charts despite being uncopyrightable and freely available on the web. It's one of the of the few types of works left -- works of government authorship -- that enters the modern public domain.
According to the typical copyright story playing in Washington, this publication and its profits for the publisher shouldn't have happened. What would be the incentive to publish a book that anyone else could freely read and even republish? Yet it seems that some people still want to read on bound paper, and a publisher can still make money by being first to market at a reasonable price. Of course the newsworthiness of the event and subject had plenty to do with this story, but it helps show, as do and Lawrence Lessig's experience with it, that total control isn't the only workable business model for publishers.
Free from patent impediments at last, the GD graphics library once again supports GIF images. I doubt that Unisys's LZW patents promoted innovation -- unless you count innovation in competing graphics formats such as PNG to work around the patent.
From the GD Library FAQ:
Does gd support GIF images?
Yes. Support for GIF was restored in gd 2.0.28 on July 21st, 2004.
I used GD and GDchart in one of my first web applications. Maybe now I'll finally update that Amazon book-rank tracker, the better to watch how long 1984 has been high on the charts. (Yes, I know JungleScan does it better, but Bibliotrack was first. Aha! I should have patented it....)
Rick Klau expresses the frustration that more and more of us will feel as the content industry begins to leverage the power it won through the broadcast flag mandate: "I understand NFL's concern about its product. But guess what? I pay them for their product. And I pay DirecTV. And TiVo. At what point have I paid enough people for the
privilege of watching right to watch it when I want it?"
Good question. The broadcast flag allows copyright holders to take away your legitimate, personal uses, and they are perfectly capable of using that power to sell these uses back to you. The flag doesn't care about "first sale," "fair use," or any of that other stuff that copyright law traditionally allows. It listens to the signal embedded in a broadcast, not a judge. So you may *never* pay copyright holders enough to get reasonable, legal uses of digitally recorded programs. After all, it's not in their interest to stop you from paying -- again...and again...and again.
Look who's auctioning: My eyes popped this morning when I saw that eBay has announced that for 180 days it will allow sellers to offer digital downloads, through a new subcategory of its music section. This is one of these ideas that, once you hear it, you wonder why it wasn't done a long time ago. You can find nearly everything else on eBay, so why not? Seems that eBay has only considered digital music verboten for fear of being stuck in the middle of an infringement suit (like that recently filed by Tiffany's). The plan now is that sellers have to warrant that they own the copyright to the recordings being offered. This is in marked contrast to the policy with respect to cds, which are clearly covered by the first sale doctrine. I wonder if this is enough. My suspicion (though I have had many,many great experiences with eBay) is that some sellers will glibly drop in the required language without much concern about whether or not they own copyright. If that happens, I'd expect eBay to pull the plug faster than you can say "Buy it now."
Whether you like Microsoft or not, you've got to recognize that they haven't gotten to be the richest company in the world through stupidity. DRM is long-term stupid. It's technology designed to make technological products less useful ("Where do you want to frustrate your customers from doing today?"), and it doesn't work as long as there's one determined attacker in the audience.
The DRM moment has been left behind by science. Publishers were looking for pay-per-use and perfect price discrimination; DRM promised it to them. But DRM was backed by bad science. As long as we live in a world where we can still talk to our friends and still tinker with our tools, DRM is doomed to failure. And when it fails at its primary purpose, it succeeds only at driving potential customers to other sources.
In the short term, DRM may help facilitate lock-in to a particular manufacturer's products. Once you buy a few Microsoft media player tracks, it's easier to keep buying Microsoft. But as the format gets less useful, and the media player's requirements become more restrictive, OGG looks more attractive. Sure, it'll take some effort to get your existing tracks back (you might have to convert, re-purchase, or most likely, find clear versions on the Darket), but once you see the gains in flexibility, you're unlikely to look back. Customers jump ship from DRM, with best customers first over the edge. If Microsoft as technology company doesn't see that, it's just ceding its leadership to someone who does.
Or at least, that's what it's trying to do. But there's a not-so-minor complication: TiVo for radio hasn't even been born yet.
This is, of course, just how the RIAA wants it: If you kill or hobble a new technology at/before birth, it can't grow up to threaten the status quo. And the music industry should have veto power over any technology that stands in the way of the past.
"The RIAA seems to have missed the fact that recording from the radio is perfectly and clearly legal," writes Fred. "Europeans already have car stereos that can time-shift digital radio. We can already record streaming webcasts and analog FM broadcasts. So why is it, exactly, that we should somehow end up with less capable devices for digital radio?"
We put a huge amount of resources into punishing and excluding free riders in many parts of society. But is it because they are actually problem, or is it because they piss us off so bad?
My local CSA's trade box was just another good idea: at the pickup site there is a cardboard box you can drop things you don't want (and would most likely waste) and pick out other people's goodies that they didn't want. It had to be a net positive. Then they decided to make it fair and try to exclude the free riders. There's a sign on the box now that says you can only take something out if you put something in. You know, to keep something in the trade box, i guess.
When you think about it, the problem becomes apparent. If you want everything you got that week you either have to exclude yourself from the tradebox, giving up something that possibly no one else want, or give up something which it may turn out no one wanted, and you would have happily eaten. Most painfully, if no one defects from the system, it guarantees that at least one item will go to waste every week. So the tradebox was a great way to reduce waste, until they decided to kick out the free riders, and it became the vector for waste. But at least it's "fair" now.
Food that rots in the box is the co-op's deadweight loss. At some point, guarding the commons to exclude free riders saps more value than it protects. What's more, today's free rider might be tomorrow's donor or innovator, though those who bridle at "free riders" might be more comfortable with "beneficiaries of consumer surplus." In their determination to stop copyright free riders, copyright holders are causing great social harm.
These problems aren't new to copyright. They just show up here more often because technology has driven the marginal cost of the next copy of a copyrighted work near zero, and peer-to-peer lets independent re-distributors shoulder those costs that remain. As a matter of hard costs, the free rider costs the copyright holder and publisher nothing. So long as we can get over the startup hump -- giving creators enough incentive to get the first copy of a work produced -- we should be able to give everybody access to it.
Copyright has long recognized this paradox. The Consitutional compromise is to give authors exclusive rights for limited times. But today, of course, the times have gotten longer (CTEA), the costs of exclusion (DRM or the PIRATE Act) have risen, and fewer and fewer members of the public get to benefit from the consumer surplus of a smoothly functioning market.
We may not have all the answers to a perfectly functioning copyright commons yet, but it can't be to assume, as the MPAA's copyright "education" does, that "If you haven't paid for it, you've stolen it." Only a broken system leaves orphan films to rot because the only ones willing to restore them don't hold (and can't find holders of) the necessary bundle of rights.
The NPD Group has released a new study (More CD Buyers Try Legal Digital Music Services, NPD Finds) on CD purchasing, authorized downloading, and P2P use.
The main spin of the study appears to be that, for those consumers who buy CDs, 3 out of 4 dentists... no wait, make that 1 out of 20 purchasers also pay to download music. In other words, if you buy music in stores, you may buy music online. (duh?)
More noteworthy, I think, is another set of results buried at the bottom of the press release:
According to NPD there were other notable differences in CD purchase behavior, depending on how consumers used specific online music services. CD buyers who also used an online music subscription service, such as Rhapsody, in the past twelve months purchased an average of 11 CDs last year; those who had paid for a music download from legal download site, like iTunes, purchased 10 CDs; those who used a P2P file-sharing site purchased eight CDs; and those who did not download or stream music from the Web bought six CDs.
If one assumes an average CD price of $12, then the average P2P user in their survey is paying the RIAA labels $96 per year for music they already can get for free. Who says you can't compete?
Ed Felten has posted his attempt at synthesizing the supposedly contradictory studies on how file-sharing affects CD sales:
The Grand Unified Theory explains the study results by breaking down the users of filesharing into two subpopulations, which I will call Free-riders and Samplers.
Free-riders are generally young. They have few if any moral qualms about filesharing, and they tend to assume that others feel the same way. They use filesharing to accumulate libraries of music, as an alternative to buying CDs.
Samplers are generally older and more risk-averse. They are highly engaged with cultural products of all sorts. They are morally conflicted about filesharing, and use it mostly to download songs that either aren't for sale, or that they don't value enough to pay for. They buy music that they really like, and filesharing causes them to find more music they like, so it tends to increase their CD purchases.
Increasingly, cable companies are getting into the business of Personal Video Recorders (PVR), integrating them into the cable set-top box. While in many ways convenient for the consumer (one less electronic component, potentially less expensive, never have to worry about recording the right channel), a worrisome potential for control over the viewing experience remains. If the cable company gives you the PVR, they will likely retain the ability to modify how you are permitted to use it. EE Times reports on one possible example of this with regard to integrated DVD recorders (Set-top boxes may put a lid on rewritable DVDs):
The current scheme under discussion is preventing disks made on a set-top burner from being played on any other system by linking the content to the serial number of the set-top using triple DES encryption.
essentially you’d be able to create an archive, but when your cable box dies on you or you move and switch to a different cable or satellite provider, your entire collection would be useless to you.
John Schwartz at the NYTimes has an interesting article this morning on the recent UNC/Harvard Study claiming P2P has almost null effect on CD sales. In particular, I thought the critique of the RIAA's "illegal activities" survey method was particularly good:
The industry has reacted with the kind of flustered consternation that the White House might display if Richard A. Clarke showed up at a Rose Garden tea party. Last week, the Recording Industry Association of America sent out three versions of a six-page response to the study.
The problem with the industry view, Professors Oberholzer-Gee and Strumpf say, is that it is not supported by solid evidence. Previous studies have failed because they tend to depend on surveys, and the authors contend that surveys of illegal activity are not trustworthy. "Those who agree to have their Internet behavior discussed or monitored are unlikely to be representative of all Internet users," the authors wrote.
"The single-bullet theory employed by the R.I.A.A. has always been considered by anyone with even a modicum of economic knowledge to be pretty ambitious as spin," said Joe Fleischer, the head of sales and marketing for BigChampagne, a company that tracks music downloads and is used by some record companies to measure the popularity of songs for marketing purposes.
Also check out Ed Felten's write up on the article here.
I'm a bit skeptical about Google's purported new 1GByte free email service that brings the power of Google to your email ("Gmail"). If it is a joke, it is brilliantly done with the knowing or unknowing assistance of the New York Times (reg. req.) among others (Google to Roll Out E-Mail Service). If it is a hoax, Google has even put out a diversionary April Fools message: Google Copernicus Center is hiring. Read the Gmail press release: Google Gets the Message, Launches Gmail. Read the Gmail about page: About Gmail.
This certainly looks real, and even if it isn't, the growing inexpense of storage means that it will be true eventually, probably sooner rather than later. I could say all sorts of things about what this means for the market and communications, but this is Copyfight, so let's talk about IP.
The Merc has a great article on how the RIAA bashes P2P out of one side of their mouth while secretly using data from the networks to boost sales of their CDs. Check out this tasty bit:
Record-label executives discreetly use Garland's research firm, BigChampagne, and other services to track which songs are traded online and help pick which new singles to release. They increasingly use such file-sharing data to persuade radio stations and MTV to give new songs a spin or boost airplay for those that are popular with downloaders.
Some labels even monitor what people do with their music after they download it to better structure deals with licensed downloading services. The ultimate goal is what it always has been in the record business: Sell more music.
``I know of a case where an artist had obviously gone with the wrong single, and everyone loved this other song they had on their record,'' said Guy Oseary, Madonna's business partner and head of her label, Maverick Records. ``In the world of what we do, it's always good to have real information from real fans.''
Maverick used BigChampagne's 100-city breakdown of popularly downloaded songs to persuade radio stations to start playing a new band, Story of the Year, during prime daytime listening hours instead of at night.
The online data revealed that despite Story of the Year's lunar rotation, its single ``Until the Day I Die'' ranked among the top 20 most popular downloads, alongside tracks from Blink-182, Audioslave and Hoobastank that received significantly more airplay. And when the band performed in a city, ``we didn't necessarily see the phones blowing up at radio, but we saw download requests for the song skyrocket as they went through,'' said Jeremy Welt, Maverick's head of new media.
Armed with this data, Maverick fought for more airtime at radio, which translated into more CD sales. Story of the Year's album, ``Page Avenue,'' just went gold, selling more than half a million copies....
Folks keep asking why more artists aren't breaking into the mainstream through P2P. I think this may provide some answers -- they are; the record labels are just taking all the credit.
[ed-Sorry for the lack of links/source. This was sent via email. I think it's from Variety.]
Update: here is the link to the Variety story, although a subscription is required to see the whole thing.
By MEREDITH AMDUR
Is Hollywood to blame for the music industry's woes?
According to market research group NPD, it's not just illegal downloads of electronic MP3 files that are eating into traditional music sales but the ever-increasing popularity of DVD movies.
In a survey of consumers who admitted to spending less money on CDs in the last year, some 21% blamed an increased spending on DVDs for their reduced appetite for CDs. Only 15% of respondents blamed their DVD habit in the same survey a year and a half earlier. NPD noted that the increase was the largest single jump in its survey. At the same time, the number of consumers who cited downloading as their excuse for lower CD spending fell from 30% in 2002 to only 21% this month.
NPD, which just finished up a study into understanding why people are buying less music, said the chief reasons remain the high price of CDs (48% cited) and the general quality of content available recently (42%).
One household entertainment budget
While music and movies are vastly different pastimes, NPD analyst Russ Crupnick argues that the decline in CD sales is increasingly attributable to the rapid rise in DVD sales. (Similarly, many publishers believe the lure of inexpensive DVDs, available in big chains like Borders, has eaten into book sales.) Researchers note that purchases and rentals of movies and music, along with videogames, typically come out of the same household budget for entertainment, so an increase in one can have a direct impact on the other.
"As DVD prices fall, especially for catalog titles, the price-to-value proposition only gets higher," noted Crupnick.
NPD reported that the average full length CD sold for a still-hefty $13.47 in the fourth quarter of last year. This price represents a fairly modest 2% reduction from the same period in 2002 and 4% down from 2001. Many DVD movies can be purchased for $15 or less.
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.