A Fresh Study on P2P’s Effect on Music Sales
February 13, 2007, 2:17 am
Filed under: News

by Eliot Van Buskirk and Sean Michaels

Over the past few years, studies have surfaced indicating that P2P file sharing either has no statistical effect on music sales or that it is responsible for the loss of untold billions in lost profits. Maybe it depends on who is paying for the study.

Today, Ars Technica points to new one in the Journal of Political Economy (abstract here, subscription required) from Felix Oberholzer-Gee and Koleman Strumpf.

The study finds the former to be true: that there is no causal link between a song being heavily trafficked on P2P networks and its sales declining. The study’s finding is familiar, but its methodology is new.

What makes this study different is that the researchers ingeniously tracked whether increased availability of music shared by Germans on P2P networks had an impact on American sales figures. That way, they were able to eliminate a problem that has dogged earlier efforts: the fact that something that’s popular online is also popular in stores, making it hard to tell whether online downloads are contributing to hype or detracting from sales.

The study concluded that less than 6 million albums went unsold in 2002 due to online piracy; the remaining 74 million CDs that sat on store shelves at the end of the year did so due to something other than online piracy.


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