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Old 04-06-2004, 04:31 PM   #1
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Did they really need a Harvard study to figure out what we all knew all along?

from Rolling Stone.com

A controversial new study by economists at Harvard and the University of North Carolina has found that file-sharing is not the cause of declining CD sales. Researchers spent a year and a half analyzing downloads and sales figures for 680 albums -- and what they found contradicts the record industry's claim that online piracy has led to a fifteen percent decline in sales since 2000.

"No matter how we use our statistical models, we cannot find a connection between decreased sales and downloads," says Felix Oberholzer-Gee, co-author of the report and a professor at Harvard Business School. "If you want to understand why sales have changed as dramatically as they have, do not look to file-sharing."

The fifty-one-page study -- arriving six days after the record industry sued another 532 file sharers -- is the most rigorous economic analysis available. It tracks downloading spikes and declines that are caused by factors unrelated to a song's popularity and uses the ebbs and flows to analyze file-sharing's impact on CD sales. "If it were true that increases in downloads decrease sales, we should see that whenever we have fluctuations in downloads, we would have fluctuations in sales," Oberholzer-Gee says. "That's not what we've found." Sales of top-selling albums such as the 8 Mile soundtrack, for example, did not decrease after several downloading spikes caused by factors such as Internet congestion and increased uploading from German students on vacation, according to the report. (Fourteen percent of music downloads occur in Germany; more than half take place outside the U.S.)

The research also supports the idea that most people download music that they wouldn't buy anyway. And, says Oberholzer-Gee, "the Internet is more like radio than we thought. People listen to two or three songs, and if they like it, they go out and buy the CD."

The record industry rejected the report immediately. "It flies in the face of reality," says an anti-piracy lawyer at one of the major labels. "All you have to do is ask a few college students to find out that they're buying less music." College students, in fact, have become a prime industry target: Eighty-nine of the alleged violators in the most recent round of cases were caught on university networks. Twenty-one schools ranging in prestige from Georgetown and Stanford to California State, Northridge, were caught in the net. And according to the Recording Industry Association of America, the strategy will continue: Every few months, about 500 cases will be filed, with people randomly pulled from services such as Kazaa. "We're not necessarily targeting university networks, but we want to send a stronger message," says Stan Pierre-Louis, the RIAA's executive vice president of legal affairs. "Everyone will face consequences if they violate copyright."

Two of the researchers who have done their own studies on file-sharing also have criticized the report. Josh Bernoff, an analyst at Forrester, a technology research firm, and Stan Liebowitz, a University of Texas economist, say that the Harvard-UNC study is flawed partly because it focuses too narrowly on the holiday season. Gift-buying in late December skews sales upward, they argue, undermining the damage that downloading might do.

But, says Oberholzer-Gee, "we excluded the holiday season and didn't find a different result." And while critics continue to question the study's methodology, Oberholzer-Gee says that the conclusions are irrefutable. "We did all the tests we could to make sure it was robust, and it is," he says. "What I find bizarre is that this is five years after file-sharing started, and we're the first people to do a sensible study. Wouldn't most industries do this before starting lawsuits? This should have been done years ago."
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Old 04-06-2004, 04:35 PM   #2
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CD sales are dropping because music today is shit. Simple.
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Old 04-06-2004, 05:36 PM   #3
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Hey, if even academic studies are stating that downloading does have a direct influence on lower CD sales, then that's one less argument the music companies can use.

MrBrau1, you're right, that's one reason. And the economic downturn. And the competition with other forms of entertainment (DVD, mobile phones, etc.).

C ya!

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Old 04-06-2004, 05:51 PM   #4
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can I download that study somewhere?
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Old 04-06-2004, 06:06 PM   #5
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The reason Tower and other CD chains are having trouble is because Best Buy. Circuit City and WalMart sell CDs for like 5 bucks less apiece and they can't compete with that because they don't sell other stuff. So all they ever sell is the rare stuff those places don't carry, and that's not enough to stay in business.
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Old 04-06-2004, 06:09 PM   #6
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The Studies are clearly flawed. When people can get something for free instead of buying it, the result will be a decrease in sales of the product. The Average person does not buy something that they can get for free. Its as simple as that.

The decrease in album sales coincides with the increase in File Sharing and CD burning. As for those who explain the decrease in sales because of "shitty music", there was just as much of that "shitty music" if not more, when sales were going through the roof. Counting for inflation, CD prices have never been cheaper.
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Old 04-07-2004, 12:15 AM   #7
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LOL... I actually wonder if file sharing actually does increase CD sales more than it takes away from them... I wouldn't be surprised if it doesn't....
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Old 04-07-2004, 12:22 AM   #8
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it has to be increasing them among smaller labels that aren't being polled in studies that show the record industry losing money. the way i see it, people who really care about music aren't going to stop buying it and stop supporting the bands they like just because they can get it for free. it's the people not purchasing mainstream music who are screwing it up for everyone else. that can be attributed to either side of the arguement: that the music being put out on major labels is shit, or the people listening to it happen to be the ones not chosing to support who they listen to. i feel a lot less guilty downloading music by a multi-millionare band on a major label than i do downloading stuff on a small label by a lesser-known band.
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Old 04-07-2004, 01:20 AM   #9
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Quote:
Originally posted by IWasBored
the way i see it, people who really care about music aren't going to stop buying it and stop supporting the bands they like just because they can get it for free.
Agreed. I download music, as do my dad and sister, and we still go out and buy CDs. Downloading is a good way to help me see if I want to hear more from an artist I may be getting into. If I like what I hear, I'll gladly go out and buy the CD. Besides, once again, smaller towns do not always have the CDs you would like to get available, which is what happened to me. Now it's not so hard for me, 'cause there's a couple bigger cities nearby where there's more access to this stuff, but in the last town I lived in, the stores barely sold squat in the way of CDs by artists I liked-it was basically greatest hits compilations and maybe one or two other CDs, all of which I'd already owned (and depending on the artists I was into, with some of them, when looking around, I didn't see a single one of their CDs in stores at all). There's many factors involved in why some people may not be buying CDs.

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Old 04-07-2004, 01:45 AM   #10
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I heard an interesting theory about dropping CD sales in our local paper. He wondered if sales dropped because older people like himself had gone out, bought CD players and steadily bought all their favorite older albums on CD. Once they had them all, they quit buying...

We had a long discussion about downloading in one of my classes. Everyone said the same thing--they only downloaded stuff they couldn't get anywhere else, or to listen to more of the album before buying it. No one quit buying music as a result--the only reason they didn't buy an album was because they only liked one song off it. No one downloaded whole albums rather than buying them.

We download stuff all the time, but it's mostly older or obscure stuff we can't get anywhere else, or won't buy a whole CD for. If downloading really has affected music sales, that's probably why--the industry can't sucker anyone into buying crappy albums for one good song.
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Old 04-07-2004, 04:39 AM   #11
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Quote:
Originally posted by Salome
can I download that study somewhere?
Yes, you can! Here's the link:
http://www.unc.edu/~cigar/papers/Fil..._March2004.pdf

I haven't read it myself. The prospect of a 52 page academic study is a bit too much for me at the moment. There are other subjects I have to devote time to.

C ya!

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Old 04-07-2004, 06:01 AM   #12
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I'd say there are several reasons why sales drop: increase of CD prices (at least in my country, by 30% for the most popular bands/singers in the last two years or so), competing with DVD/internet, but maybe the most because the music industry (the major 5 labels that own 90% of the market) focuses on teens and pushes on rap/R&B/hip hop/num-metal music (and demands commercial succes or it will drop the artist from their bill), and so leaving out other audiences that do not care as much for this type of mainstream music. Music industry is way too short-term oriented ever since the 90's brought about the boy-band, produced bubble-gum pop music, and the Spice girls clones, and now all sorts of Pop Idol type of music.

The major bucks IMO these days is in touring, not as much as album sales (or even singles). It would be interesting to see how much money the labels are losing by the downloads, they suffer the most if you ask me. If younger bands can't get a deal because people download their music, it's the label's fault IMO because they won't be able to sell as much as they "should" to even get a record deal, much less stay with the label in the future.

The interesting part is not all bands have a problem with downloading, and CD burners/MP3 players are perfectly legit to buy - and go figure: consumers download popular music. (the biggest artists still sell huge amounts of albums anyway)
Luckily, several musicians realised the downloading is inevitable and that internet is something you just can't compete with, so they now offer live shows (like Pearl Jam), live MP3s (like Metallica), music on their website (George Michael plans to do that) or just plainly allow fans to tape their live shows (Dave Matthews band). Also I think services like itunes are a part of how to deal with the new technology, NOT sending out lawsuits to teens.

Personally, I only downloaded a few U2 songs I couldn't get anywhere else to see if I like them - otherwise I don't do it because I still buy all my CDs.
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Old 04-07-2004, 06:40 AM   #13
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Quote:
Originally posted by MrBrau1
CD sales are dropping because music today is shit. Simple.
Agreed

Mind you I noticed on Video Smash Shits on the weekend there were a few ugly bands so perhaps its the begining of a broadening of the music styles widely available at the moment. Heres hoping anyway.
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Old 04-07-2004, 07:13 AM   #14
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Quote:
Originally posted by Flying FuManchu
LOL... I actually wonder if file sharing actually does increase CD sales more than it takes away from them... I wouldn't be surprised if it doesn't....
I agree, because I know several people, especially young guys, who went on CD buying kicks because of the stuff they found online. It got them interested in songs and bands, found new and obscure bands, and went hog wild. Their CD collections grew to twice the size of pre napster. Also, most people like the liner notes, the covers, and the REAL CD better than a 'burned' one with magic marker writing on it. I usually lose those. I keep my CDs in cases, even if I take them in the car in those pocket things I still put their booklets with them. The only 'burned' CDs I have are a few bootlegs and compilations of things I liked 'okay' but never would have bought in the first place.

That's one thing that's overlooked in this, a lot of people burn things they kinda like but would never actually have paid for, like if you like one song and don't want to pay 15 bucks for it buying the whole CD, but burning or not, they didn't lose any money if it was never going to be bought anyway.
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Old 04-07-2004, 12:46 PM   #15
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Exactly ^^^^.

Quote:
Originally posted by U2girl
I'd say there are several reasons why sales drop: increase of CD prices (at least in my country, by 30% for the most popular bands/singers in the last two years or so), competing with DVD/internet, but maybe the most because the music industry (the major 5 labels that own 90% of the market) focuses on teens and pushes on rap/R&B/hip hop/num-metal music (and demands commercial succes or it will drop the artist from their bill), and so leaving out other audiences that do not care as much for this type of mainstream music. Music industry is way too short-term oriented ever since the 90's brought about the boy-band, produced bubble-gum pop music, and the Spice girls clones, and now all sorts of Pop Idol type of music.

The major bucks IMO these days is in touring, not as much as album sales (or even singles). It would be interesting to see how much money the labels are losing by the downloads, they suffer the most if you ask me. If younger bands can't get a deal because people download their music, it's the label's fault IMO because they won't be able to sell as much as they "should" to even get a record deal, much less stay with the label in the future.

The interesting part is not all bands have a problem with downloading, and CD burners/MP3 players are perfectly legit to buy - and go figure: consumers download popular music. (the biggest artists still sell huge amounts of albums anyway)
Luckily, several musicians realised the downloading is inevitable and that internet is something you just can't compete with, so they now offer live shows (like Pearl Jam), live MP3s (like Metallica), music on their website (George Michael plans to do that) or just plainly allow fans to tape their live shows (Dave Matthews band). Also I think services like itunes are a part of how to deal with the new technology, NOT sending out lawsuits to teens.
*Nods*

Another artist who has no problem with downloading is Tom Petty...a few months ago, I heard a story about him allowing a bunch of his albums to be availiable on Napster for people to download. .

Seriously, all those who are upset with file-sharing...I wonder what they have to say about the artists who allow it to happen?

Angela
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