Friday, November 02, 2007

Industry Canada P2P Study Shows Posititve Effects on Music Biz and more...

A dynamite study just released from Industry Canada shows that P2P file sharing is good for the music business, and even more...

Here's part of the abstract:

Our review of existing econometric studies suggests that P2P file-sharing tends to decrease music purchasing. However, we find the opposite, namely that P2P filesharing tends to increase rather than decrease music purchasing.

Among Canadians who engage in P2P file-sharing, our results suggest that for every 12 P2P downloaded songs, music purchases increase by 0.44 CDs. That is, downloading the equivalent of approximately one CD increases purchasing by about half of a CD. We are unable to find evidence of any relationship between P2P filesharing and purchases of electronically-delivered music tracks (e.g., songs from iTunes). With respect to the other effects, roughly half of all P2P tracks were downloaded because individuals wanted to hear songs before buying them or because they wanted to avoid purchasing the whole bundle of songs on the associated CDs and roughly one quarter were downloaded because they were not available for purchase. Our results indicate that only the effect capturing songs downloaded because they were not available for purchase influenced music purchasing, a 1 percent increase in such downloads being associated with nearly a 4 percent increase in CD purchases.

We find evidence that purchases of other forms of entertainment such as cinema and concert tickets, and video games tend to increase with music purchases. It has been argued in the literature that the increase in the number of entertainment substitutes has led to a decline in music purchasing, but our results do not support this hypothesis. As expected, we find that reported interest in music is very strongly associated with music purchases. Finally, our results suggest that household income is not important in explaining music purchases.

(emphasis added)
The study was done by two researchers at the University of London, and can be found here.

It looks like music to our ears. I look forward to reading past the abstract...but I wanted to get this out fast...

It is entitled: The Impact of Music Downloads and P2P File-Sharing on the Purchase of Music: A Study for Industry Canada and was written by Birgitte Andersen and Marion Frenz.

PS - update - See Jack Kapica's analysis on the politics of this...


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