technology

WEB AFFAIRS: Consumers’ rights versus corporations’ illusions

Today’s website is not a website but a 360KB PDF document that everybody even remotely concerned with consumers’ rights should either read, or at the very least, know of.
Why is that? Because it debunks what we are endlessly told by the whining recording companies – the notorious “majors” – about file sharing and peer-to-peer (P2P) downloading by computers communicating on a network without a central server.
Using the time-honoured technique of repeating something over and over until people eventually come to believe it – and it works – the majors have been trying to persuade us that file sharing is responsible for their sales slump and they have now taken to suing and intimidating web users who download songs and music.
Interestingly, the press has been very keen to relay the majors’ claims but very quiet about other people’s versions of the situation. Well, that’s the power of the advertising dollar for you.
What other people say is simply that the majors’ assertion that each download means one less sale relies on the assumption that if you had not downloaded the file you would have bought the entire album. This assumption has no basis in fact. Many people who might download certain songs just because they can would never dream of wasting Bt500 on the entire CD.
This was clearly shown last March by two researchers at Harvard Business School and the University of North Carolina.
Says their press release: “This study is unique in that it uses data from file-sharing servers, where the authors directly observed 1.75 million downloads during 17 weeks in the autumn of 2002. Using statistical methods, they can then test if the sale of an album declines more strongly if that album is downloaded more often.”
The study found that, at worse, 5,000 downloads are needed to reduce the sales of an album by a single copy. This could potentially reduce sales by around two million copies a year. The problem is that CD sales actually dropped by 139 million copies between 2000 and 2002. Even if 10 million were directly lost to downloads that would still leave 129 million unaccounted for.
Could it be that CD prices are simply too high and that the majors’ greed is obvious enough to make people deliberately reduce their purchases?
Worse still, it seems that it only takes 150 downloads of the 25 per cent best selling albums to increase their sales by one copy. “This effect is particularly important because the profitability of the music industry depends almost entirely on the success of the most popular albums.”
In other words, file sharing could actually be profitable to the recording companies.
The whole study is available from http://www.unc.edu/~cigar/papers /FileSharing_March2004.pdf
Meanwhile, what is arguably the best P2P programme, Kazaa Lite, is easily found on the Web.
Xavier Galland
The Nation