The Impact of Music Downloads

A few years ago, Birgette Andersen and Marion Frenz of the University of London published a study (available through Industry Canada) titled “The Impact of Music Downloads and P2P File-Sharing on the Purchase of Music: A Study for Industry Canada“.

It’s a short and fascinating read, and found  that, contrary to popular belief,  peer-to-peer file sharing increases purchases of CDs.

Here’s a short quote from the study:

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).

The fact that this focuses mostly on CD purchasing, and discerned no impact on electronic purchasing is demonstrative of how dated the study may be.  I would be interested to see an updated survey and study, since iTunes/electronic purchasing is rapidly expanding.

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