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A Heretical View of File Sharing

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  • #1

    A Heretical View of File Sharing

    The music industry says it repeatedly, with passion and conviction: downloading hurts sales.

    That statement is at the heart of the war on file sharing, both of music and movies, and underpins lawsuits against thousands of music fans, as well as legislation approved last week by a House Judiciary subcommittee that would create federal penalties for using what is known as peer-to-peer technology to download copyrighted works. It is also part of the reason that the Justice Department introduced an intellectual-property task force last week that plans to step up criminal prosecutions of copyright infringers.

    But what if the industry is wrong, and file sharing is not hurting record sales?

    It might seem counterintuitive, but that is the conclusion reached by two economists who released a draft last week of the first study that makes a rigorous economic comparison of directly observed activity on file-sharing networks and music buying.

    "Downloads have an effect on sales which is statistically indistinguishable from zero, despite rather precise estimates," write its authors, Felix Oberholzer-Gee of the Harvard Business School and Koleman S. Strumpf of the University of North Carolina at Chapel Hill.

    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.

    MORE


    Mr. G
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  • #2
    I've posted that under a long thread but thanks for bringing up the front.

    I couldn't agree more - and it is stupid for RIAA to take the attitude of branding their customers as thieves.

    With the internet as a new distribution model, the future bands should dump the big record labels and go on their own ways.

    han solo

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    • #3
      Seems like a pretty simple argument to me. If people are downloading songs for free, why would they ever go to a store and pay retail for them?

      Tell me how that scenerio is good for the artists and record companies. I may be nieve about this whole thing, but it seems to me the only way file sharing doesn't hurt the artist is if someone would have never purchased the CD anyway. I don't know how you would quantify that, however.
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      • #4
        Originally posted by ElviswasaBluesFan@Apr 5 2004, 08:29 AM
        Seems like a pretty simple argument to me. If people are downloading songs for free, why would they ever go to a store and pay retail for them?

        Tell me how that scenerio is good for the artists and record companies. I may be nieve about this whole thing, but it seems to me the only way file sharing doesn't hurt the artist is if someone would have never purchased the CD anyway. I don't know how you would quantify that, however.
        People have been taping others records since the technology was invented. Most people I know have huge music collections and very few of them have ever bought a CD.

        All of my cassettes are ones I recorded from other people's albums and CDs. And all of my CDs are ones I've burned from others or gotten off the net.

        If I wasn't allowed to file share anymore, that wouldn't cause me to go buy CDs. I would just keep on copying them from someone else. I think that a huge amount of the people who file share are people like me who wouldn't buy these CDs anyway.
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        • #5
          Originally posted by ElviswasaBluesFan@Apr 5 2004, 08:29 AM
          Seems like a pretty simple argument to me. If people are downloading songs for free, why would they ever go to a store and pay retail for them?

          Tell me how that scenerio is good for the artists and record companies. I may be nieve about this whole thing, but it seems to me the only way file sharing doesn't hurt the artist is if someone would have never purchased the CD anyway. I don't know how you would quantify that, however.

          This is what the article is saying. Most downloaders would not have purchased the CD anyway so how is it hurting sales?

          "While downloads occur on a vast scale, most users are likely individuals who would not have bought the album even in the absence of file sharing," the professors wrote.

          In an interview, Professor Oberholzer-Gee said that previous research assumed that every download could be thought of as a lost sale. In fact, he said, most downloaders were drawn to free music and were unlikely to spend $18 on a CD.

          "Say I offer you a free flight to Florida," he asks. "How likely is it that you will go to Florida? It is very likely, because the price is free." If there were no free ticket, that trip to Florida would be much less likely, he said. Similarly, free music might draw all kinds of people, but "it doesn't mean that these people would buy CD's at $18," he said.


          Mr. G

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          • #6
            What RIAA is missing out is people like to mix up their favorite songs on a CD.

            Hence the succecss if iTunes etc. Who wants to spend 18 bucks to just get one song and the rest are crap on a cd. (That's my understanding about one of the biggest complaints of buying these CDs).

            When VHS came out - Jack Valentini was opposed it - fearing it would hurt the movie industry. But it changed how the movie business works with rentals and video sales.

            RIAA is going through the same path - unsure of how to deal with this new technology so they are attacking people instead of trying to take advantage of this.

            han solo

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            • #7
              Originally posted by hansolo@Apr 5 2004, 09:27 AM
              With the internet as a new distribution model, the future bands should dump the big record labels and go on their own ways.
              Absolutely.

              That's the REAL risk for the big labels.
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              • #8
                Originally posted by TTB+Apr 5 2004, 09:03 AM-->
                QUOTE (TTB @ Apr 5 2004, 09:03 AM)
              • #9
                Originally posted by Crackless McCracken+Apr 5 2004, 09:06 AM-->
                QUOTE (Crackless McCracken @ Apr 5 2004, 09:06 AM)
                Originally posted by [email protected] 5 2004, 09:03 AM
              • #10
                Steve -

                history repeats itself. First MPAA with VHS and now this.

                They are always clueless when it comes to technology.

                han solo

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                • #11
                  Originally posted by Mr. Goalie@Apr 5 2004, 08:19 AM
                  Felix Oberholzer-Gee
                  I agree with the sentiments expressed in this thread, but not because of the study. It starts with a name. JJ.

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                  • #12
                    Originally posted by steveInebriated@Apr 5 2004, 09:20 AM
                    On the flip side: how could the industry not see this coming? How many people do you know who had a copy of the computer game Wolfenstein 3D and never purchased it?
                    I don't know what you're talking about.

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                    • #13
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                      • #14
                        I personally don't buy CD's because, like someone else mentioned, I don't want to pay $15 bucks for a CD that only has two songs that I like.

                        Now, companies are beginning to produce disks that do not allow you to burn the songs to a CD, and my interest in getting even those CDs with a few good songs on them is zero because I'd have to carry 50 CDs in my car instead of burning a "greatest songs" CD and reduce the number of CDs carried to 5.

                        The artists have publically stated that they do not generate any profits from the CDS. Rather, they generate their profits from the concerts. They just use the CD as a promotion tool.

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                        • #15
                          The record companies have been sticking it up the collective poopdooker of artists forever, now all of a sudden they are worried about the ARTISTS losing money? I call bullshit.

                          File sharing will not be stopped. And it shouldn't be.
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