Surprise: File Sharing May Not Help Sell CDs After All

Actual downloading! Happening in 2001! / Photo by Getty Images
Actual downloading! Happening in 2001! / Photo by Getty Images
WRITTEN BY
Kory Grow

In 2007, a study conducted by Industry Canada appeared to suggest that file sharing wasn't bad for CD sales. In fact, its authors claimed, the data showed file sharing actually helped move physical albums. The results sounded a little fishy, but how can you argue with hard numbers?

Evidently, the answer is "by re-examining the data," which is exactly what Australian National University's Professor George Barker did. In a fresh study, he pored over what he claims are flaws in the conclusions drawn by Danish academic Birgette Andersen, who authored the original report. As Billboard and law blogger Barry Sookman point out, Barker used the same raw figures as Andersen, but concluded they proved the opposite of her findings. In raw statistics, Barker says a "10 percent increase in P2P downloads reduces CD demand by around 0.4 percent."

Barker writes that Andersen excluded consumers who had completely stopped purchasing CDs "(potentially because of P2P activity) prior to 2005" when those are the people more likely to have substituted downloading with purchasing. Also, he "controlled" for the fact that interest in both CD purchasing and illegally downloading "may be correlated" because of an individual's love of music.

Barker's findings support a study conducted in 2006 by economist Stanley Liebowitz. Billboard cites that paper as saying, "When given the choice of free and convenient high-quality copies versus purchased originals, is it really a surprise that a significant number of individuals will choose to substitute the free copy for the purchase?" Sometimes the logical conclusion is the right one.

Near the end of Sookman's blog, he speculates on how studies like these tie into lawmaking. He also cites a Canadian legislative summary about a bill that amends the country's Copyright Act as referencing the Industry Canada data. "The study should be removed from Industry Canada's website," Sookman says. "At the very least, like cigarettes, it should be appropriately labeled with a prominent notice."

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