Copyright 2004 The Tribune Co. Publishes The Tampa Tribune
Tampa Tribune (Florida)
April 19, 2004 Monday
FINAL EDITION
SECTION: MONEYSENSE; Pg. 3

LENGTH: 558 words

HEADLINE: Study Says File Sharers Not Hurting CD Sales

BYLINE: DOUG STANLEY, dstanley@tampatrib.com

BODY:


By DOUG STANLEY

dstanley@tampatrib.com

If you believe the record industry, file sharing is killing the music business.

The industry is so sure unauthorized downloading is crippling sales it has sued thousands of consumers in a campaign aimed at deterring music fans from continuing to share files.

But a first-of-its-kind study, conducted by two independent economists, concludes file sharing isn't to blame for the steady decline in sales during the past several years.

"Downloads have an effect on sales which is statistically indistinguishable from zero," write Felix Oberholzer-Gee of the Harvard Business School and Koleman Strumpf of the University of North Carolina at Chapel Hill.

After years of emotional debate on both sides of the issue, it's refreshing to see some objective data on the relationship between file sharing and sales.

In their draft report, Oberholzer-Gee and Strumpf didn't delve into the legal and ethical hornets' nest surrounding sharing music files, only whether the practice adversely affects sales.

The researchers analyzed nearly 1.8 million downloads over 17 weeks in fall 2002, then compared that data against music purchases during the same time using some incredibly complex mathematical formulas.

"We find that file sharing has no statistically significant effect on purchases of the average album in our sample," they write in a draft. "At most, file sharing can explain a tiny fraction of this decline."

Industry Refutes Study

Predictably, the Recording Industry Association of America is critical of the study and continues to blame file sharing for a significant downturn in music sales.

The trade group says CD shipments have fallen from 939 million units in 1999, the year the original Napster swept the Internet, to 746 million units last year — a 21 percent decrease.

Oberholzer-Gee and Strumpf argue there are many plausible reasons for the sales slide, including the economy, fewer album releases, growing competition from other forms of entertainment, such as DVDs and video games, a reduction in music variety stemming from consolidation in the radio industry and a consumer backlash against record industry tactics.

The researchers' 52-page draft is on Strumpf's Web site, www.unc.edu/~cigar. www.unc.edu/~cigar.

Information about the industry's campaign against unauthorized music downloads is on its Web site, www.RIAA.com.


To read previous columns by Doug Stanley, go to TBO.com, keyword: Tech.

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NOTES: PLUGGED IN BUSINESS & TECHNOLOGY

LOAD-DATE: April 21, 2004