Latest Music Piracy Study Overstates Effect of P2P

Blackbeard writes "A new study from pro-business think tank Institute for Policy Innovation claims that music piracy accounts for $12.5 billion in lost output to the US economy. That includes 71,060 lost jobs and $422 million in lost tax revenues... if the figures are accurate. Ars Technica's write-up points out a number of flaws in the IPI's reasoning. 'The study makes for some alarming reading, but it suffers from a few significant flaws. First and foremost, it appears to fall into the "illicit downloads = lost sales" fallacy, the view that each song obtained over a P2P network is a lost purchase.' There's more: 'The IPI study also assesses the increased demand for music if piracy didn't exist and assumes the market would remain as "intensely competitive" as it is today. The problem is that music fans are largely disenchanted with the market. By and large, music fans think that music is too expensive, and that much of what is available isn't very good.'"

Comments

Re:To put it into 'software piracy' terms...

[Alsee]

If a high-school kid was a massive warez junkie and managed to accumulate 1.5 million dollars worth of pirated software, would the IPI consider that 1.5 million dollars worth of lost sales... from a kid with a maximum $2K-$3K a year income?

Duh, of course not. No one is that stupid.
You obviously didn't read the article. Because the article explicitly quotes:

In this study, the weighted average substitution rate used for the physical piracy of recorded music is 65.7 percent.

What the IPI is actually saying that high-school kids with a maximum $2K-$3K a year income (which equals a $50 a week allowance) who accumulate 1.5 million dollars worth of music downloads are measured at a rate of 65.7 percent... or more specifically nine hundred and eighty five thousand five hundred dollars of spending each.

Don't go making up silly fictional figures claiming "the IPI consider that 1.5 million dollars worth of lost sales".

Silly rabbit.

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