Filesharing is Not the Enemy

Pirating online music hurts records sales and indy media -- or does it?

| May 20, 2004

Contrary to the paranoid preaching of the Recording Industry Association of America (RIAA), online filesharing may not be the grisly monster that is eating up CD sales and single-handedly destroying the recording industry. A new study conducted by Harvard Business School in conjunction with the University of North Carolina tracked 1.75 million downloads over a 17-week period in 2002 and compared those observations to the sales of 680 popular albums, finding no link between filesharing and CD sales, Joy Lanzendorfer writes for AlterNet. In fact, the truth may be that downloading music actually boosts sales for the most popular 25 percent of CDs.

Responses to the study have varied. The powerful RIAA emphatically denies the evidence, calling it 'inconsistent with virtually every other study done' on the subject; and University of Texas Professor Stan Liebowitz 'believes the study shows the result of advertising on popular music, not necessarily the effect of downloading on the entire music industry,' writes Lanzendorfer. Most agree on one thing though -- we have a lot to learn about the effect 'pirating' music has on sales. 'The only thing we can confidently say is that filesharing makes some people buy more records and some other people buy fewer records,' says Fred Von Lohmann, Staff Attorney for the Electronic Freedom Foundation.

Other than the record companies -- whose CD sales declined by 139 million copies from 2000 to 2002 -- the big loser may be independent musicians, as legendary indy artist Ani Difranco suggests. Ironically, Lanzendorfer points out, even Difranco 'got her start by people copying and passing around her tapes.' Koleman Strumpf, co-author of the Harvard-UNC report, admits that, according to the results, independent musicians are the one group hurt by downloads.

But the differences between indy and mainstream media cloud the picture, suggests Eric Garland, CEO of BigChampagne, a market research firm focusing on online media. 'Many independent musicians are not in the business of selling you a plastic disc, but a relationship,' he says. 'They want a loyal fan, the person who will buy a t-shirt or a concert ticket when they come into town. That's a very different business from the kind of widgets and Coca-Cola products the four major labels are into.'
-- Jacob Wheeler

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