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Dutch Study Says Filesharing Has Positive Economic Effects
An anonymous reader writes "In a study conducted by TNO for the Dutch government the economic effects of filesharing are found to be positive. According to the 146 page report (available for download, but in Dutch) filesharing is good for the prosperity of the Dutch: with filesharing more media are available, even though this costs the media industry some profit. One of the most noticeable conclusions is that downloading and buying are not mutually exclusive: downloaders on average buy just as much music as non-downloaders, but they buy more DVDs and games then people who don't download. They also tend to visit more concerts and buy more merchandise."
And to do something in return I'll give you my attempt at translating the interesting parts of the article (which is quite interesting). Note that the net effect on the content industry is still negative, and the net gain for Dutch prosperity is positive, this might be because quite a bit of the losses are outside the country. It can also be seen as a proof of the failure of the normal free market model to give an optimal allocation of resources in the case of near-zero marginal costs.
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File sharing has positive net effect on economy
The economyic effects of file sharing on Dutch prosperity on long and short term are positive. Consumers obtain access to a wide range of cultural products due to file sharing. On the other hand it is likely that there is a decrease of turnover in the sales.
This was shown by a joint study of TNO, SEO Economic Research, and the Institute for Information Rights (IViR) into the economic and social consequences of file sharing for music, films, and games ordered by the Ministries of Education & Culture, Economic Affairs, and Justice. This analysis is conducted based on a study of statistics and recent scientific literatur, interviews with frequent downloaders, a representative survey of the Dutch population and a number of informative workshops with the [media] sector.
Estimates of the volume of global unauthorised downloading are widely divergent. The global count is at least several billion files per year, a substantial part of the international Internet traffic. Around 4.7 million Dutch Internet users of 15 years and older have downloaded something without authorisation in the past year. Citizens view downloading and sharing of music, films, and games as socially accepted, but know little of the technique and regulation involved.
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Net prosperity gain
For the music industry the downloaded recordings cannot be translated 1-on-1 into lost sales. Many downloading consumers would not have bought the same amount of music [that they downloaded] against current prices if downloaded would not be possible. Additionally, there are people who download music in order to get to know it and buy it if they like it.
Although there are also positive effects of downloading music on sales, a negative effect on the turnover of the involved sectors is likely. This is especially the case for music because downloading music has become the most normal. There is a differentiated effect based on the artist: well-known artist are most impacted negatively, while relatively unknown artists can even profit when file sharing increases their reknown. For society at large the lost turnover of the [media] sector is opposed to the gains by the large group of downloaders that would otherwise not have made a purchase. The net effect on prosperity is substantial.
Rise of new business models
The music and film industry are faced by the challenge of matching their supply with the changed consumer demand. New business models are on the rise. The music industry is moving to use new sources of revenue (concerts, merchanise, sponsoring). There is a place for music recordings, but in the future it will probably become impossible to run a company on music recordings alone. Within the movie industry the markets of cinema and DVD sales are still growing. DVD rentals are down strongly. In the longer term this might change as faster internet becomes available. Here also new business models are important. The gaming industry is growing in spurts, especially console games and their combination of hardware and software. Especially here file sharing is less prevalent than in e.g. PC games, where turnover is stagnating. A platform bound official game has so many advantages that it is not inconceivable that this branch will be able to aboid file sharing to a larger degree than the music industry.