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Public opinion of file sharing

In 2004 there were an estimated 70 million people participating in online file sharing.

According to a CBS News poll in 2009, 58% of Americans who follow the file sharing issue,

considered it acceptable "if a person owns the music CD and shares it with a limited number of friends and acquaintances"; with 18- to 29-year-olds this percentage reached as much as 70%.

In his survey of file-sharing culture, Caraway (2012) noted that 74.4% of participants believed musicians should accept file sharing as a means for promotion and distribution.

 

Economic impact

 According to David Glenn, writing in The Chronicle of Higher Education, "A majority of economic studies have concluded that file sharing hurts sales". A literature review by Professor Peter Tschmuck found 22 independent studies on the effects of music file sharing. "Of these 22 studies, 14 – roughly two-thirds – conclude that unauthorized downloads have a 'negative or even highly negative impact' on recorded music sales. Three of the studies found no significant impact while the remaining five found a positive impact."

A study by economists Felix Oberholzer-Gee and Koleman Strumpf in 2004 concluded that music file sharing's effect on sales was "statistically indistinguishable from zero".

This research was disputed by other economists, most notably Stan Liebowitz, who said Oberholzer-Gee and Strumpf had made multiple assumptions about the music industry "that are just not correct." In June 2010, Billboard reported that Oberholzer-Gee and Strumpf had "changed their minds", now finding "no more than 20% of the recent decline in sales is due to sharing".

 However, citing Nielsen SoundScan as their source, the co-authors maintained that illegal downloading had not deterred people from being original. "In many creative industries, monetary incentives play a reduced role in motivating authors to remain creative. Data on the supply of new works are consistent with the argument that file sharing did not discourage authors and publishers. Since the advent of file sharing, the production of music, books, and movies has increased sharply.

Glenn Peoples of Billboard disputed the underlying data, saying "SoundScan's number for new releases in any given year represents new commercial titles, not necessarily new creative works."

The RIAA likewise responded that "new releases" and "new creative works" are two separate things. "[T]his figure includes re-releases, new compilations of existing songs, and new digital-only versions of catalog albums. SoundScan has also steadily increased the number of retailers (especially non-traditional retailers) in their sample over the years, better capturing the number of new releases brought to market. What Oberholzer and Strumpf found was better ability to track new album releases, not greater incentive to create them."

A 2006 study prepared by Birgitte Andersen and Marion Frenz, published by Industry Canada, was "unable to discover any direct relationship between P2P file-sharing and CD purchases in Canada".

The results of this survey were similarly criticized by academics and a subsequent revaluation of the same data by Dr. George R. Barker of the Australian National University reached the opposite conclusion.

"In total, 75% of P2P downloaders responded that if P2P were not available they would have purchased either through paid sites only (9%), CDs only (17%) or through CDs and pay sites (49%). Only 25% of people say they would not have bought the music if it were not available on P2P for free." Barker thus concludes; "This clearly suggests P2P network availability is reducing music demand of 75% of music downloaders which is quite contrary to Andersen and Frenz's much published claim."

According to the 2017 paper "Estimating displacement rates of copyrighted content in the EU" by the European Commission, illegal usage increases game sales, stating "The overall conclusion is that for games, illegal online transactions induce more legal transactions

Market dominance

A paper in journal Management Science found that file sharing decreased the chance of survival for low ranked albums on music charts and increased exposure to albums that were ranked high on the music charts, allowing popular and well known artists to remain on the music charts more often. This had a negative impact for new and less known artists while promoting the work of already popular artists and celebrities.

A more recent study that examined pre-release file sharing of music albums, using BitTorrent software, also discovered positive impacts for "established and popular artists but not newer and smaller artists." According to Robert G. Hammond of North Carolina State University, an album that leaked one month early would see a modest increase in sales. "This increase in sales is small relative to other factors that have been found to affect album sales."

"File-sharing proponents commonly argue that file sharing democratizes music consumption by 'leveling the playing field' for new/small artists relative to established/popular artists, by allowing artists to have their work heard by a wider audience, lessening the advantage held by established/popular artists in terms of promotional and other support. My results suggest that the opposite is happening, which is consistent with evidence on file-sharing behavior.

Billboard cautioned that this research looked only at the pre-release period and not continuous file sharing following a release date. "The problem in believing piracy helps sales is deciding where to draw the line between legal and illegal ... Implicit in the study is the fact that both buyers and sellers are required in order for pre-release file sharing to have a positive impact on album sales.

Without iTunes, Amazon and Best Buy, file-sharers would be just file sharers rather than purchasers. If you carry out the 'file sharing should be legal' argument to its logical conclusion, today's retailers will be tomorrow's file-sharing services that integrate with their respective cloud storage services

 

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