Tuesday, March 30, 2004

STATS ENTERTAINMENT: There's been a lot of material published on file sharing, most of it by the branch of the copyright industry that releases music, and much of it attempting to prove that file sharing will ruin sales, bankrupt musicians, make Christina Aguilera have to reinvent herself as some kind of cheap two-bit whore, leads to cancer of the head and limbs, blinds kittens in an indiscriminate fashion and was responsible, through some sort of worm hole in time, for the attacks on Pearl Harbour and the Maradonna 'Hand of God' fiasco. But there's not been much independent work done on the effects of people swapping music online, mainly because the file sharers aren't part of a few multibillion dollar industries with cash to spare to buy off a few dodgy Stats Profs. However, Felix Oberholzer of Harvard Business School and Koleman Strumpf
UNC Chapel Hill
have done some research into the effects of all those bittorrents zooming about, and they've drawn conclusions that don't exactly match up with the RIAA's claims. The whole document is a bit of a wade-through, but the abstract is clear enough:

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.

Which seems clear enough to me.

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