What Various Studies Really Reveal About File-Sharing

Dangerous_Minds writes "Drew Wilson of ZeroPaid has an interesting look at file-sharing. It all started with a review of a Phoenix study that was used to promote SOPA. Wilson says that the study was long on wild claims and short on fact. While most writers would simply criticize the study and move on, Wilson took it a step further and looked in to what file-sharing studies have really been saying throughout the years. What he found was an impressive 19 of 20 studies not getting any coverage. He launched a large series detailing what these studies have to say on file-sharing. The first study suggests that file-sharing litigation was a failure. The second study said that p2p has no effect on music sales. The third study found that the RIAA suppresses innovation. The fourth study says that the MPAA has simply been trying to preserve its oligopoly. The fifth study says that even when one uses the methodology of one download means one lost sale, the losses amount to less than $2 per album. The studies, so far, are being posted on a daily basis and are certainly worth the read."

Comments

P2P had no effect on music sales?

[Anonymous Coward]

I know anecdotes don't mean much but...

I was in university (and poor) when Napster became popular and I stopped paying for music. I have money now but the habit kind of stuck and I haven't paid for music since; I know many people who are the same way. I'm pretty sure that P2P has cost the music industry hundreds of dollars from me personally over the last 14 years.

Re:P2P had no effect on music sales?

[Anonymous Coward]

Cost the music distribution industry, perhaps. What about the statistics on the actual artists?

Re:P2P had no effect on music sales?

[Anonymous Coward]

On the flipside, I never used to pay for music at all - ever. I either copied from friends, or downloaded. Now I'm working and have money, and using Spotify Premium (€10 a month) since it came available.

Re:P2P had no effect on music sales?

[Anonymous Coward]

And for every few albums I've downloaded, I've heard an musician I never would have otherwise, bought their album and gone to see their show when they come to town.

So the mediocre loose... but the talented, perhaps unappreciated, artists who don't get corporate radio airtime win.

Re:P2P had no effect on music sales?

[SeaFox]

Yes, but filesharing also means many people were exposed to music they might not have been otherwise, and of those there is a group who despite downloading an album will still go buy it (or buy a special limited edition version for an upgrade) to support the artist they are now a fan of.

Those extra sales will counteract the losses of the "I don't pay for anything" pirates.

Re:P2P had no effect on music sales?

[Anonymous Coward]

File sharing didn't cost the Mafiaa cartels anything from me, their own actions have.

I will not EVER pay for their produced/distributed content again, because by doing so I would be helping fund a war on the free internet, lawsuits waged on their own customers, and bought legislation to stifle innovation.

Plus p2p file-sharing gives a better product without bullshit like unskippable ads, DRM, and idiotic FBI warnings on legally purchased media.

Re:P2P had no effect on music sales?

[XiaoMing]

This is science at its best. Not only can you not cherry-pick your data to make a conclusive paper, but you also really shouldn't cherry-pick papers to make a conclusion (or vice versa) in life.

Keep in mind that the conclusion you are the living counter-example of is from one study out of many, and that the final study which directly relates one download to one lost sale (the most conservative estimate you can make) arrived at a loss of less than $2/album sold. So that means that even if not everyone were like you, the loss really becomes a sliding scale from $0-$2 per album.

You take all of the papers into account, and a larger pattern does emerge: Yes, any record that goes gold (500k sales) or platinum (1M sales) will see roughly ~$1M-$2M in losses. (http://en.wikipedia.org/wiki/Music_recording_sales_certification )
At the same time, we know that artists are thriving in this environment http://boingboing.net/2009/11/13/labels-may-be-losing.html

What does one do with these conclusions? Well that really depends on who you are: If you're the corporation, you obviously tighten your group and try to squish indie label companies for the sake of the bottom line (and in spite of artistic creativity). If you're the musician, you could "sell-out" because being well known, even if via overproduction and sheer marketing and autotuning, was your life goal, or you can maybe find a nice indie label that will help develop you for you. If you're Fox News, you defend the corporation because they're people too, who cares about our neighbors!

And as the average consumer? Well I guess I'm always impressed by the number of people defending corporations and what they think is "capitalism" in this day and age, when it's really resembling more and more a conspiracy by all the companies to screw over the consumers, rather than a competition to win their favor.

Re:P2P had no effect on music sales?

[toejam13]

I'm just the opposite. By obtaining music through alternative channels, my CD collection eventually quadrupled in size (now over 300 discs).

One benefit was that I was exposed to a huge number of artists who receive little to no airplay by traditional terrestrial radio broadcasting. I'm not a fan of the soulless generic music that dominates most of the airwaves, so this was a very significant thing for me. When I discovered a new group I really liked, I'd go hit up an online retailer. Their recommendation system would then steer me towards other similar artists I had barely heard of. I'd then go back to the well to grab some of their music. Rinse and repeat.

Another benefit was identification. There used to be a huge number of songs from the '70s - '90s I really liked, but never knew their name. Thanks to an ID tag on a digital music file, I now knew the name of the artist and song and could go buy the album through a retailer. No more mistaking the music of one artist for another.

As online retailers have moved away from 20 second 32kbps previews to song clips of longer duration and better quality, it is just getting easier to use their sites to preview. But nothing beats the convenience of those alternative channels.

Re:P2P had no effect on music sales?

[Anonymous Coward]

I was in university (and poor) when Napster became popular and I stopped paying for music. I have money now but the habit kind of stuck and I haven't paid for music since; I know many people who are the same way

Before I was in university I didn't buy a single record, simply because I didn't like the crap that was being pushed through the radio (all radio). Both napster and new friends helped me to find music that I actually like. These days, I go to 3-4 concerts and 2 festivals a year.

Yes, I do download. Still, most of my music collection comes from CD rips, either from friends' or the library (which is legal in my country).

Re:P2P had no effect on music sales?

[Maslaka]

I'm not so sure. I have bought some music, but this has always been if I really cannot find it for free (pirated). Part of it is because it's more convenient and faster, but mostly it is because by doing that I have more money to spend on other things. This seems to be same way with tons of people, so yes, what RIAA and labels are saying about piracy is not that far from the truth. Most of casual piracy is indeed because people can get away with it and "save" money by pirating.

I have also recently looked around iTunes and it seems like they have pretty much everything available, and more, like podcasts and remixes etc. If iTunes works any way similar to the mac app store, then there's no reasoning about convenience either. Buying is just a click away and everything works fast and quickly. Faster than pirating actually. The funny thing is, I live in a country that quite openly sells pirated software, movies and music. You can go to established, huge malls and most stores are selling pirated versions at cheap prices.

I do also go out more to venues and to listen live music (especially if dining out - which is almost every night as it's the way here, most people don't cook at home and want to socialize). However, I don't think it's because I've got better access to free music by piracy, but just because I've grown up and it's usual thing for young adults to do, especially if dating, and especially here.

But piracy really is a huge problem. Something needs to be done about it. I don't think the huge fines RIAA/MPAA puts on people and destroying lives are the right way, but someone needs to come up with better solution to the problem.

Re:P2P had no effect on music sales?

[scourningparading]

But piracy really is a huge problem.

No. It's copying certain data without permission. I cannot fathom how anyone could perceive that as being a much more severe problem than jaywalking. They may or may not be losing potential profit, but that is all.

I cannot see how copying music is a "huge" problem even as someone who supports copyright. We have much, much, much larger problems to worry about, and oftentimes, dealing with copyright infringers is both a waste of time and taxpayer money (at least when it's the government dealing with them).

I don't think the huge fines RIAA/MPAA puts on people and destroying lives are the right way, but someone needs to come up with better solution to the problem.

Laughable. What do you suggest? Even as someone who supports the idea of reasonable copyright laws, I do not believe it is possible to stop.

Through legislation? Again, laughable. That will just make people angry, and likely invade people's privacy, violate rights, and a host of other things.

Laws? Again, won't work. It will just anger people even further, and it's impossible to stop them all.

If you're suggesting that they make a product that can compete with the pirated versions, then that is a much more sound strategy. That means no DRM, good customer support, and hassle-free. But still, there will be those who will not buy no matter what.

Re:P2P had no effect on music sales?

[chilvence]

Thankyou, for stating the obvious :). I know that statement seems sarcastic, but it is the one thing people seem to so easily overlook. Not only is the music distribution industry redundant, the only thing it seems to be good for in my mind is promoting gutter trash like Justin Bieber, which most likely would never fly on its own.

Piracy may not be 100% right, but neither is expecting to get mega rich off the back of the general scumbag population just because you can do something that resembles actual music.

Re:P2P had no effect on music sales?

[betterunixthanunix]

The music industry isn't that bad in terms of freedom

In the late 90s, the RIAA asked researchers in the security community to evaluate SDMI, essentially a DRM system for CDs that was supposed to be built into every music player:

http://en.wikipedia.org/wiki/SDMI

Researchers who attempted to publish their work on SDMI, even those who did not agree to the confidentiality requirement, were threatened by the RIAA. Thankfully, SDMI ultimately died and the researchers were able to publish -- after the government assured them that the DMCA protected their ability to publish their work.

So where is the RIAA today? Pushing for every more restrictive copyrights and paracopyright laws. Attacking other countries for not having restrictive copyrights. They have toned down their attacks on file sharers because the attacks were a waste of their money and were losing them whatever public sympathy they had left. The RIAA is as bad when it comes to respecting freedom as the MPAA.

Re:P2P had no effect on music sales?

[dgatwood]

If I had to draw an analogy, it's like if the police were to actively search for jaywalkers and only jaywalkers. That's just ridiculous.

No, that's still a poor analogy. Deaths from jaywalking are quantifiable. Jaywalking poses a clear risk to human life in some cases. On the scale of actual damage, jaywalking causes far more harm to society than non-commercial piracy.

It's more like the police creating an entire special crimes division to prosecute the unauthorized sale of lemonade by schoolchildren. In theory, restaurants are harmed because people buy fewer drinks. Therefore, the unauthorized manufacture and sale of lemonade reduces restaurants' potential profit. Further, those unauthorized producers consume and provide resources without paying money back to the government in sales taxes, so the government loses money, too, and they're violating the law. It is in almost every way an accurate analogy; the only real differences are that the composition of a glass of lemonade is not particularly creative and that the copy is not likely to be exact.

The cost to restauranteurs across the nations from these unauthorized lemonade sales is probably huge, possibly even on the order of tens of millions of dollars annually, worldwide, assuming that you quantify every child-sold glass of lemonade as the lost sale of a $3.50 glass of lemonade from a restaurant. Yet although the cost is high in aggregate, the cost per infraction is negligible, and the cost of enforcement would vastly exceed the amount of money you could possibly hope to extract from the destitute kids committing the acts of lemonade piracy.

Now, to take the analogy one step further, I'll describe how the restaurant industry could ostensibly overreact to match the music and movie industries:

• Restaurants could build anti-theft devices into every disposable cup of lemonade that introduces a bad flavor when you carry it out the door. This prevents kids from making taste test comparisons to improve the quality of their copies.
• As kids find ways to disable these devices, the restaurants could create newer, more sophisticated devices to thwart future attempts.
• When kids discover that they can pour the contents into another container, the restaurants could install full body X-ray scanners at the door to detect any concealed pouches of liquids, and could hire full-time guards to monitor those scanners.
• When kids realize that they can conceal pouches of liquids inside their mouths, the restaurants could upgrade to full-body CT scanners.
• When restaurants discover kids with an illegal lemonade stand, they could obtain a search warrant for their parents' houses to search for evidence that the kids copied their lemonade.
• Restaurants could hire lawyers to go to lemonade stands to infiltrate their lines of customers and try to obtain information for prosecution purposes. When the kids and other people in line refuse to tell who the children's parents are, the restauranteur associations could get subpoenas to force them to provide that information so that they can sue the parents. Eventually, though, the judges would realize that the mere existence of a kid with a lemonade stand is not sufficient to prove that his or her parents knew about it, and would begin rejecting the requests for subpoenas.
• Restaurants could hire their own cop-like enforcers to break into businesses and inspect lemonade at random, requiring the business owners to prove that they purchased their lemonade through an authorized channel.
• Restaurants could mandate that all new infants be equipped with devices implanted in their mouths. These devices would search for sophisticated watermarks (specific chemical additives that make it possible to distinguish authorized lemonade from copies), and would refuse to allow the infants to consume unlicensed lemonade.

You get the idea. To describe the current copyright policing in the U.S. as utterly ridiculous is perhaps

Re:How about a study that shows....

[The1stImmortal]

First of all, I happen to agree that distribution against the author's wishes is somewhat disrespectful.
However.

• - Something being merely disrespectful has rarely stopped people actually doing something. This applies to both individuals and companies.
• - It is reasonably rare these days (at least in big-business copyright trade like pop music, pop cinema etc) that the person(s) who actually created a given work is/are the same as the people earning the majority of income from the work, or doing the marketing, setting distribution terms etc - and of course often also seperate from those initiating legal actions
• - Authors rights are hardly inherent natural rights - they are social rights. That is, the existance, and continued respect, of Authors' rights is dependent on society and culture (and increasingly, on business culture). Should society generally move in a different direction in terms of considering authors to have rights over their work, then it's possible that Authors' rights will diminish or cease to exist. It is possible we are seeing such a movement in social/cultural perception of a social right occuring

Now, there are other issues implied in your post. For instance, those who control copyright in a work may act at odds with the wishes of the author, or even at times at odds with the legal owner of the copyright. Even when technically legal, this is itself a form disrespect that should be fought (though whether the fighting is done by breaking the law or by changing the law is an open question)
Also, there is the question of inappropriate influence. Compared to the size of the "copyright industry" (by which I mean primarily film and music, and to an extent software, where the product is copyright-enforced artificial scarcity), there is an argument that inappropriate levels of political influence are exerted. Possibly this is due to the "fame" obsession in the general populace - ie, perceptual bias.

Who are these guys?

[Anonymous Coward]

Open up google and put in the following line:
"T. Randolph Beard" "George S. Ford" "Lawrence J. Spiwak"

Doing a quick google search using the names in the article shows something interesting. Articles on telecommunications, wireless, net neutrality threats, and a bunch of other stuff. What also pops up is this strange organization called Phoenix Center.

T. Randolph Beard (Professor of Economics, Auburn University)
George S. Ford (Chief Economist, Phoenix Center for Advanced Legal & Economic Public Policy Studies)
Lawrence J. Spiwak (President, Phoenix Center for Advanced Legal & Economic Public Policy Studies )

Do another google search with the following line:
site:www.phoenix-center.org pdf

This shows a whole bunch of articles behind this strange organization.