For the study, released on Monday, researchers at Harvard University and the University of North Carolina tracked music downloads over 17 weeks in 2002, matching data on file transfers with actual market performance of the songs and albums being downloaded. Even high levels of file-swapping seemed to translate into an effect on album sales that was "statistically indistinguishable from zero," they wrote.
"We find that file sharing has only had a limited effect on record sales," the study's authors wrote. "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 study, the most detailed economic modelling survey to use data obtained directly from file-sharing networks, is sure to rekindle debates over the effects of widely used software such as Kazaa or Morpheus on an ailing record business.
Big record labels have seen their sales slide precipitously in the past few years, and have blamed the falling revenue in large part on rampant free music downloads online. Others have pointed to additional factors, such as lower household spending during the recession, and increased competition from other entertainment forms such as DVDs and video games, each of which have grown over the same period.
Executives at file-sharing companies welcomed the survey, saying it should help persuade reluctant record company executives to use peer-to-peer networks as distribution channels for music "We welcome sound research into the developing peer-to-peer industry, and this study appears to have covered some interesting ground," said Nikki Hemming, chief executive officer of Kazaa parent Sharman Networks. "Consider the possibilities if the record industry actually cooperated with companies like us instead of fighting."
The study, performed by Harvard Business School associate professor Felix Oberholzer and University of North Carolina, Chapel Hill associate professor Koleman Strumpf, used logs from two OpenNap servers in late 2002 to observe about 1.75 million downloads during their 17-week sample period.
That sample revealed interesting behavioural, as well as economic, data. Researchers found that the average user logged in only twice during that period, downloading about 17 songs. Some people vastly overshot that average, however -- one user apparently logged in 71 times, downloading more than 5,000 songs.
The two professors narrowed their sample base by choosing a random sample of 500 albums from the sales charts of various music genres, and then compared the sales of these albums to the number of associated downloads.
Even in the most pessimistic version of their model, they found that it would take about 5,000 downloads to displace sales of just one physical CD, the authors wrote. Despite the huge scale of downloading worldwide, that would be only a tiny contribution to the overall slide in album sales during the past few years, they said.
Moreover, their data seemed to show that downloads could even have a slight positive effect on the sales of the top albums, the researchers said.
The study is unlikely to be the last word on the issue. Previous studies have been released showing that file sharing had both positive and negative effects on music sales.
The Recording Industry Association of America was quick to dismiss the results as inconsistent with earlier findings.
"Countless well-respected groups and analysts, including Edison Research, Forrester, and the University of Texas, among others, have all determined that illegal file sharing has adversely impacted the sales of CDs," RIAA spokeswoman Amy Weiss said in a statement. "Our own surveys show that those who are downloading more are buying less."
Talkback
I don't personally use a download service. I subscribe to Musicmatch Radio, but that's it. However when recently visiting a friend, who does use a couple of download services, I did manage to snag a couple of tracks I used to love and which I had on tape until they got chewed up.
He tends to collect rare tracks that either aren't currently available or which he has on tape or LP somewhere in the attic.
We both have vast CD/LP collections, which we do still add to. But we don't buy at anything like the rate at which we used to - having switched to DVD's. I now have at least as many DVD's as CD's, and I have around 300 CD's. I bought around 3 CD's last year, down from about 3-4 a month, BUT I don't have any ripped music that I don't already own in some form or another... Already this year, I have bought around 15 CD's and my friend probably twice that number.
I could easily download gigabytes of ripped CD's, but, I like to have the originals there. Having them ripped makes listening to a variety of music much simpler than having to dig my way through mountains of CD's and playing 1-2 tracks off each.
music sales have slumped because CD's have been recognised as the rip-off's they are. Charging £14 for a 1970's album or £5 for a single with 6 versions of the same song is a joke, and now we don't have to fall for it. When they finally compete with play.com and cdwow in the high street and sell albums for less than £10 (like Adsa, Tesco and Sainsburys manage!!!) then many people will give up copying and downloading and go back to buying the real thing.
At Last a study thats shows what people have been saying for as long as file sharing as been in the press.
lets look at the facts as stated there are lots more alternative entertainment activities out there i,e Games, DVD, Computers, not to mention out door activities like sports, gym's (as these seem to be more trendy these days) which you pay money for,
whilst on the subject of money doesnt it make sense that weather your a teeny bopper or working adult you only have a certain amount of disposable income? so if you are spending it on DVD's or games etc how can you spend the same as you used to on music? also the fact you can acquire music for free off P2P systems doesnt mean you would have gone out & bought it.
however i personally think it has slightly the reverse effect of introducing music or bands/artists you perhaps wouldnt normally listen to if you had to buy it before hand, lets face it you wouldnt go buy a car without test driving it first.
on a final note if the 'industry' would only lower the base rate of CD's, DVD's, Games, Software to relistic levels then so called piracy would be reduced to a level that is not worth considering downloading or ripping music etc.....
why is it the industry now want to stop us buying music & DVD's abroad because we are saving a bit of money? instead of been ripped off by high street shops ? also from online shops you can purchase music or DVD's that may not be available in the country of origin so why cant i buy it? its not like we wanting it for free?
To be honest I downloaded a whole load of music in the good old audiogalaxy days, when you could get what you wanted easily. I would like to salute the site for putting me in contact with alternative music I never knew the name of. And thats it, music is great if you know what you like, the record companies peddle stuff life boyzone, pop idle and crap, i repeat crap like that. So i have not qualms of ripping them off, they continiously bombarded me with this stuff, record shops still dont have much apex twin so i have to go online to get it.
And its not like artists a missing out, just ask mick hucknell (simply red) and george micheal why they've gone indipendant. No, record companies are there for the people who buy whats advertised, online i can search in my boxers and not be intimidated by the shop and its clientele.
Who heard of Zero 7 before downloads were widespread, now its background music to gardening programms. I am the type of person to turn their nose up at 'Th Hulk' in favour of The Girl With The Pearl Earing, I like alternative stuff and the record companies were never there for me.
Now I listen to bbc radio mixes, available for seven days after they have been broadcast, and the D'n'B ones are ace. I do not rip off movies, but i will rarely buy a cd unless i want the case.
File sharing must be legalized. Xerox machines are legal, Replay TV are legal too so what's the difference?