Tuesday, February 13, 2007

Peer to peer sharing: "Close to zero" effect

Over the last half-decade or so, we can only guess at the person hours, cash and goodwill squandered by the RIAA fighting peer-to-peer file-sharing. They believed that it was that, rather than a reliance on a dwindling number of big hitters and an inability to embrace the digital opportunities on offer, that threatened their businesses.

Guess what? They were wrong.

The latest Journal of Political Economy features research by Felix Oberholzer-Gee and Koleman Strumpf which has found the effect of peer-to-peer sharing's effect on legal sales has been "close to zero":

Analyzing data from the final four months of 2002, the researchers estimated that P2P affected no more than 0.7% of sales in that timeframe.

"Using detailed records of transfers of digital music files, we find that file sharing has had no statistically significant effect on purchases of the average album in our sample," the study reports. "Even our most negative point estimate implies that a one-standard-deviation increase in file sharing reduces an album's weekly sales by a mere 368 copies, an effect that is too small to be statistically distinguishable from zero."

This, remember, is 2002 - before there was any workable legal alternative to peer-to-peer downloads.

Although, of course, losing another 368 copies from Ashlee Simpson's albums total would have sent her into negative sales...

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