Busting the Myth That File Sharing Harms Sales

Big Content routinely cries foul over 'piracy' of their precious content and on that basis, uses its formidable wealth to continue persecuting file sharers - that's ordinary people like you and me - by trying to force extortionate financial settlements or taking them to court and lobbying governments around the world to get draconian anti-consumer laws passed such as three strikes and you're off the internet. Note that Big Content never shows in court or anywhere else, independently verified evidence of the supposed "harm" dealt by file sharing. They always rely on statutory damages and claim that it's impossible to quantify it. So, how do they know how much "damage" is being done, then? Interestingly, looking at their financials, they're always in rude health, even during these rough economic times around the world. This includes, music, movies and especially video games - witness the astounding sales of the latest Call of Duty series breaking all sales records recently. Something doesn't smell right, does it?

Most file sharing studies have shown that file sharing has a neglible effect on sales, good or bad and the ones that show damage to sales tend to be funded by Big Content. However, this latest independent study, entitled "Profit Leak? Pre-Release File Sharing and the Music Industry" by Robert Hammond, Assistant Professor of Economics at North Carolina State University, claims that piracy actually increases sales of music albums. Moreover, Hammond claims that the study is much more accurate than previous ones made, since the sample size is so much larger: 1095 albums from 1075 artists on the largest private BitTorrent tracker dedicated to music. The research focused on albums that were leaked before release and found that on average resulted in 59.6 additional sales, a small, but clearly measurable benefit. Interestingly, the artists to gain the most were the widely known ones, with the little known ones not affected by file sharing at all.

The study can be downloaded here (681KB PDF) or viewed online courtesy of scribd here and the professor's website is here.

Also, ZeroPaid made their own study on file sharing, but they took a different approach. They read through a whole range of studies on this subject and they too came to the conclusion thta file sharing isn't the problem for the recording industry. Interestingly, they explain that they used this range of studies to give them a sense of redundancy to help ensure that what they were saying was reasonably accurate. It's been painfully obvious from the start, that Big Content, fronted by their RIAA/MPAA and other related organizations around the world, are simply motivated by greed and conrol and this whole "losses" argument is a smokescreen used to pass intimidate people and pass draconian laws such as ACTA, in order to maintain that control. These studies really help to bring this out into the open more than ever.

In following the notions of science, we chose to use multiple studies instead of a select few. The reason for this is that we can have a sense of redundancy to make sure that what we were saying was reasonably accurate. If you can have five different ways of measuring a certain economic problem and come to a general consensus of a few basic facts, then you increase your chances of being accurate. Can you test something multiple times and come to the same or very similar conclusions about a question? I think that is a very scientific question and one we more or less used when approaching the issue of file-sharing in this series. Even if there were mistakes along the way on a specific study in this series, the consensus of facts can overcome such issues. In this series, I think we can establish some basic patterns of facts and I don’t think our conclusions about file-sharing are (if they are off to begin with) that far off at all.

Based on my reading of these studies and my years of experience, I think the industry should be focused on making profits, not problems.