Rich Fiscus
30 Sep 2007 13:00
A paper from economist Stan Liebowitz argues that both the music industry and file sharing defenders are cherry picking facts to prove their points.
The primary purpose of the paper was debunking earlier research out of Harvard University which concluded that P2P file sharing has no impact on CD sales. The argument in that study was that P2P activity falls drastically during the summer because most college students don't use file sharing services when they're not at school.
Liebowitz points out two key problems with the study. First, he says the publicly available data on file sharing doesn't back the Harvard study with regard to file sharing patterns. According to his analysis file sharing activity actually increased slightly over the summer in the years covered by the original study. He also notes that the Harvard researchers didn't release their entire dataset, making it impossible for it to be subjected to any kind of peer review.
His report isn't one sided though. He also points out that the music industry's problems are primarily of their own making. He says that music labels' attempts to Block the availability of new technology and sue customers hasn't done anything to stop profits from dropping.
File sharing may or may not impact CD sales, but there are two realities that are inescapable. CD sales are dropping partly because of music downloading - whether legal or illegal, and you can't stop technology from being developed. That combination spells the end of the CD as the linchpin of the music industry, and record labels will either have to act accordingly or be prepared to lose money to those who do.
You can download the entire report from Social Science Research Network.