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Empirical data on file-sharing's effect
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elektro80
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PostPosted: Tue Mar 30, 2004 11:13 am    Post subject: Empirical data on file-sharing's effect Reply with quote  Mark this post and the followings unread

( grabbed from a post at www.boingboing.net )


Koleman Strumpf, a conservative, Cato-affiliated economist at the University of North Carolina at Chapel Hill, has just co-authored a paper on the effects of file-sharing on album sales, based on the first-ever empirical data analysis in the field. Koleman watched the file requests on OpenNap servers (to get numbers on which albums' tracks are being downloaded) and compared them to the sales-figures for each album, correlating file-sharing popularity against sales data. His conclusion: file-sharing isn't killing record sales.

Quote:
We analyze a large file sharing dataset which includes 0.01% of the world’s downloads from the last third of 2002. We focus on users located in the U.S. Their audio downloads are matched to the album they were released on, for which we have concurrent U.S. weekly sales data. This allows us to consider the relationship between downloads and sales. To establish causality, we instrument for downloads using technical features related to file sharing (such as network congestion or song length) and international school holidays, both of which are plausibly exogenous to sales. We are able to obtain relatively precise estimates because the data contain over ten thousand album-weeks...

Even in the most pessimistic specification, five thousand downloads are needed to displace a single album sale...high selling albums actually benefit from file sharing.



PDF file: http://www.unc.edu/~cigar/papers/FileSharing_March2004.pdf

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elektro80
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PostPosted: Tue Mar 30, 2004 11:47 am    Post subject: Reply with quote  Mark this post and the followings unread

and then some have other ideas... and probably other drug habits too:



Quote:


A survey by an independent market research company has outlined for the first time the true scale of the threat of illegal file-sharing to the UK music industry.

Among its key findings are:

> An estimated 8.0m people in UK are downloading music – 92% of them doing so illegally;

> Downloading is most popular in the key teenage music buying demographic;

> The research shows that spending on music by downloaders fell by a third in 2003;

> Key indicators suggest the problem is set to get even worse.

Peter Jamieson, chairman of record companies' trade association the BPI (British Phonographic Industry), said, "These findings are truly disturbing. No one should be in any doubt about the scale of the problem we are grappling with. No one can now question the need for us to take action."

The survey, jointly commissioned by the BPI and the British Video Association, was based on a sample of 3,667 12-74 year olds. The fieldwork was undertaken by market research company TNS late last year.

The survey reveals that 17.8% of the public say they are downloading music. This equates to 8.0m people. Of those 92%, are using illegal sites, some 7.4m people.

Downloading is most popular among the key music buying audience. 12-19 year olds account for 12% of the population, 16% of music spending, but 30% of downloaders.

Downloaders split 60% male and 40% female. They are more likely to live in London and the south, reflecting the geographical distribution of broadband access.

Downloading tends to be single track led, with only 5.5% of respondents downloading whole albums.

Younger downloaders tend to be heavier users of downloading services. While 34% of downloaders overall download over 10 tracks a month, for those under 25 this rises to 47%.

The longer people have been downloading the more they do it. Only 43% of those who have been downloading for less than six months download more than five tracks a month. For those downloading for more than six months the figure rises to 54%.

Burning CDs

The survey provides striking evidence of the threat posed by the combination of filesharing and CD recorders built into computers.

40% of survey respondents buy CD-Rs, but 80% of music downloaders buy CD-Rs, the vast majority using them to record music.

While half of the downloaders buy five or fewer CD-Rs per month, 11% of music downloaders buy 11 or more CD-Rs per month.

Some 92% of music downloaders say they use CD-Rs for recording music.

The cost to the record industry
Advocates of file-sharing often argue that it is justified as it acts as a promotional tool. But this survey reveals that to be untrue. TNS are able to track the spending on music by downloaders and non-downloaders as they monitor a fixed panel of consumers every two weeks.

When TNS compared the spending of downloaders on music in 2003 versus 2002, they discovered their spending on singles was down by 59% and albums spend was down by 31%.

Overall, their expenditure on recorded music fell by 33%.

This was at a time when the overall UK record market was down just 0.8% by value.

"These numbers nail the lie that somehow the record industry should be grateful for illegal downloading because of its supposed promotional value," says Jamieson. "This research clearly illustrates that the illegal use of music on the internet is damaging the entire UK music industry"

"We cannot and will not allow that to continue."

Problem set to worsen
Two factors suggest the losses to the record industry because of illegal downloading are set to worsen.

The longer people download, the more they tend to download. As existing downloaders become more experienced, the TNS survey suggests they will download more; Many more people are set to begin downloading. 22% of those not currently downloading say they intend to start. That represents another 7.6m planning to start downloading.
"These figures are truly worrying," says BPI Chairman Jamieson. "There can be no doubt that the need for action against illegal downloading is now urgent."

Key Facts – Downloading & Music Sales

Downloading

> 18% of people aged 12-74 claims to be downloading music – around 8m individuals. Of this 8m, 92% are downloading from illegal sources, particularly file-sharing services such as KaZaa.

> At present, downloading is essentially 'track led' – the proportion of people downloading entire albums is relatively small.

> The profile of downloaders is heavily biased towards younger age groups – 29% of them are aged 19 and under.

> These younger downloaders are also the heaviest – 47% claim to be downloading more than 10 tracks per month.

> At 3.00pm yesterday more than 2.6m people were logged onto the KaZaa network, sharing more than 630m files, few of which generate any money for the rights owners

Impact on the market for recorded music

> The impact on the singles market is clear – sales fell by 30% in 2003

> Despite falling retail prices, album sales have remained relatively stable over the last three years.

> Analysis of respondents' purchasing revealed that their spend on singles has fallen by 59% from 2002 to 2003.

> Their albums spend has fallen by a third over the same period.

> For heavy downloaders (downloading 10+ tracks per month) spend was down by 48%

> 22% of non-downloaders have expressed an intention to begin

> At present, about 2.5m homes in the UK have broadband connections, this is estimated to double in 2005 (Enders Analysis)

CD Burning

> 40% of survey respondents buy CD-Rs, but 80% of music downloaders do so, and the vast majority use them to make illicit recordings.

> Technology consultants Understanding & Solutions estimate that 375m blank CD-Rs will be sold in the UK in 2004 and that 219m will be used for home audio recording

> If so, then unauthorised CDs may well overtake legitimate CD albums sold in the UK in 2004

General Industry Stats

> Britain's music industry (in its widest sense) is worth almost £5bn a year and music activities generate the equivalent of 126,000 full-time jobs in the UK.

> The UK record industry reinvests an estimated 13% of its turnover in Artist and Repertoire to discover new talent, one of the highest levels of investment of any industry sector.

> The UK is the third largest market in the world and second only to the USA as a source of repertoire – British artists have successfully sold millions of records around the world for over 50 years.

> Retail spending on recorded music exceeds £2 billion, generating £300m in value added tax. Annual album sales are running at more than 232m units.

> The UK music industry has an enviable export record with annual net earnings in excess of £435m. (National Music Council 2002)

> Britain is a nation of music lovers and we buy more music than any other country – four units per capita each year. (IFPI Recording Industry in Numbers 2002)

> According to independent research, album prices have continued their downward trend over recent years. Latest figures show that almost half of all CD albums now retail for under £10. (Taylor Nelson Sofres 2003)

Source: BPI



...............

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Last edited by elektro80 on Tue Mar 30, 2004 12:54 pm; edited 1 time in total
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seraph
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PostPosted: Tue Mar 30, 2004 12:33 pm    Post subject: Reply with quote  Mark this post and the followings unread

I do not download music simply because I do not have time to listen to it. I barely listen to my music. The music industry is wrong thinking that downloading is a threat for its survival: I think that many who download music would not buy it anyway Exclamation
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PostPosted: Tue Mar 30, 2004 12:46 pm    Post subject: Reply with quote  Mark this post and the followings unread

seraph wrote:
I do not download music simply because I do not have time to listen to it.

there are very few exceptions to the abovementioned rule: music by Elektro80 is one (I downloaded all his pieces) Very Happy

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PostPosted: Tue Mar 30, 2004 12:53 pm    Post subject: Reply with quote  Mark this post and the followings unread

You pirate you!

[ big hug ]


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PostPosted: Wed Mar 31, 2004 10:15 am    Post subject: Reply with quote  Mark this post and the followings unread

more on the same:
http://www.unc.edu/~cigar/papers/FileSharing_March2004.pdf

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