P2P Has Zero Effect On Music Sales

Feb 14th, 2007 | By | Category: Digital Music

A new study in the Journal of Political Economy has found that illegal music downloads have had no noticeable effects on the sale of music, contrary to the claims of the RIAA and other music industry organizations.

The study, The Effect of File Sharing on Record Sales: An Empirical Analysis, by Felix Oberholzer-Gee and Koleman Strumpf, matched an extensive sample of music downloads to American music sales data in order to search for causality between illicit downloading and album sales. Based on their analysis, the researchers estimated that P2P file-sharing 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.”

The report is sure to be controversial, but it doesn’t settle the P2P controversy. While there was no measurable negative affect of file-sharing on sales, there report doesn’t support claims by P2P advocates that file-sharing leads to increased sales because it helps popularize tracks. .

via Ars Technica

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