Copyright 2004 The Financial Times Limited
Financial Times (London, England)
April 6, 2004 Tuesday
SECTION: CREATIVE BUSINESS - Openers; Pg. 3

LENGTH: 197 words

HEADLINE: Downloads may even speed up album sales

BYLINE: By ALAN CANE

BODY:


Is the music industry hitting the wrong targets in its efforts to halt the decline in CD sales?

New research argues that sharing music files over the internet does not harm album sales - in fact, for top albums, it can stimulate sales.

The academics - Felix Oberholzer from Harvard Business School and Koleman Strumpf of the University of North Carolina - have broken new ground in that rather than merely asking users about their music-sharing activities, they analysed download data from the operational files which internet computers generate. Most users were not aware aware they were monitored.

They compared this information with music sales data for several months using statistical techniques. The conclusion? There is no relationship between the number of downloads of an album and sales: "Even in our most pessimistic statistical model, it takes 5,000 downloads to reduce the sales of an album by a single copy." That would imply a 2m shortfall in 2002. In fact, CD sales declined in the US by 139m copies from 2000 to 2002. Most people who share music files would not have bought the albums anyway, they argue.

alan.cane@ft.com

www.unc.edu/~cigar/papers/FileSharing_March2004.pdf

LOAD-DATE: April 5, 2004