Study: Piracy Does Not Deter the Production of Music, Films, Books
According to a new study (PDF) by economists Felix Oberholzer-Gee (Harvard) and Koleman Strumpf (University of Kansas), file sharing and weaker copyright protections generally benefit societies more than they hurt them. Among other things, Oberholzer-Gee and Strumpf argue that file sharing has done nothing to deter the production of books, music, and films. The two economists argue that weaker copyright is desirable, as long as it doesn't "lessen the incentives of artists and entertainment companies to produce new works."
One Download Doesn't Equal a Lost Sale
Specifically, Oberholzer-Gee and Strumpf review some of the latest studies related to file sharing and music and bust some of the myths that the music industry is still pushing, including the idea that every download equals a lost sale. One study, for example, examined the iPod listening habits of 5,600 consumers and concluded that only 64% of the songs on these players had ever been played. It's unlikely that these users would have paid for the songs they never played.
The two researchers also argue that the fact that music was basically available for free increased a lot of consumer's willingness to buy MP3 players in the first place. According to another study, 65% of respondents said that they did no buy a CD because they had downloaded a free copy of a song, but at the same time 80% said that they bought a CD because they had sampled it.
In addition, the authors argue that mashups are likely to drive consumers to the original recordings and don't necessarily lead to lost sales either.
Number of Recordings has Doubled Since 2000
Oberholzer-Gee's and Strumpf's focus is not so much on whether or not the music industry is loosing money because of file sharing, but whether file sharing has deterred the production of music. While there are lots of arguments about the financial losses the music industry might or might not have incurred from file sharing, the production of music is clearly up (the number of recordings produced has doubled since 2000), and so is the demand for concert tickets (and the price of these tickets). As for films, even in countries where piracy is rampant (including South Korea, India, China), as well as in the U.S., the number of yearly film productions has only increased in the last couple of years.
This study, of course, comes as a crucial moment in the file sharing debate, as the Thomas vs. Capitol case is entering its final days (our report from earlier today). There, the music industry and the court are still working under the assumption that every copy is a lost sale.
If you have some spare time and an interest in this topic, you should definitely have a look at this paper. It's actually quite readable - especially for an academic paper by two economists - and short.
CC-licensed logo image used courtesy of Flickr user Rev Dan Catt.
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I read this paper. I feel sorry for the trees -- virtual and real -- that died to make it possible.
To conclude that creative output is up because of / in spite of sharing is just what you would expect from an Ivory Tower academigod with no clue about the real world. Christalmighty. Output is UP because technology has driven the cost of production down and wildly increased access to to the tools of the trade. Oh, and distribution is damn near free because Google thinks only they should make money on digital media. ARGH. As someone who hopes to make a dime from my music, the notion that everyone has a right to it for nothin' is downright peeve-worthy.
Here's my opinion: a song is a product that just happens to be a lot easier to duplicate than a car. In fact, the same can be said of all intellectual property. BUT ease of duplication does not make unauthorized reproduction legal or okay. I don't think you need to go to Harvard to figure this out!
One more nit: all this blather about how an artist can simply tour more to make up for lost revenue on CDs completely ignores folks like me who CAN'T tour (had a brain injury).
Okay, stepping off my pedestal...
Jeff
www.cerebellumblues.com
> Output is UP because technology has driven
> the cost of production down and wildly increased
> access to to the tools of the trade.
Absolutely true. It's a rather glaring omission from the report.
> all this blather about how an artist can
> simply tour more to make up for lost revenue on
> CDs completely ignores folks like me who CAN'T tour
> (had a brain injury).
The irony is, that's exactly what the major labels used to tell us! "Why should we pay you for album sales? You can tour and sell t-shirts!"
We live in a society that is increasingly similar to the downfall of the Republic as dictated by Plato. People just want stuff for free.
I was just writing on the same basic subject about how the iPhone 3G users upset about not getting the cheapest price have the same 'want my stuff for free' attitude.
Heinlen was always fond of saying: There Ain't No Such Thing as a Free Lunch.
Two extremes. People want everything for free and corporations want to hold on to their profits forever. Maybe patents should expire sooner and then free market competition would make things cheaper (or free). "Build one product and milk it for life" business plan does not work anymore.
The only people downloading lots are the addicts, people that probably spend half their money on their sh*t anyway...
A quick review of copyright law history in the United Sates provides some perspective in regards to the original intent of the US Constitution concerning copyright:
http://www.arl.org/pp/ppcopyright/copyresources/copytimeline.shtml
Current copyright law originated in Europe and (in my un-learned opinion) grossly extends the copyright term beyond what United States law originally intended (28 years maximum). I'd say 50 years beyond the death of the author is not "securing for limited times". R.I.P. U.S. Constitution, you were good while ye lasted!
I don't want music for free. As a music consumer, I want good music and think artists should be fairly paid for that.
But I don't want to play the rules majors dictate anymore.
In switzerland if you want 1 track of a CD for a fair price you have the choice between iTunes store and iTunes store...... !?! (or did I miss another service??)
It's not what I call a free market!!
Majors have just miss the internet opportunity years ago....
Artists, studios, and Internet professionals should work together and kick majors out of the business... P2P and social media will do the marketing thing with no charge...
Little mistake here: the paper states that 64% of the songs on people's lists have never been played.
Thanks
lots of music website supply free music downloading ...It's really great ..
I stopped reading here:
"Oberholzer-Gee's and Strumpf's focus is not so much on whether or not the music industry is loosing money because of file sharing..."
Loosing. Yeah.
The word is Losing. One O. Loosing is, if anything, the process of becoming loose.
Like your mom's vagina.
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Have to agree that it seems to be a very shoddy report. Production is up, but how much of that has the remotest chance of seeing any return on investment? No matter what way you look at it, the only way to get real exposure and success is still through the major labels. Their importance has increased if anything, as the mid-sized companies have fallen away.
The past 2-6 years has seen every Tom, Dick and Harry upload music to the online stores, creating a glut of articles about "now everyone can do it". Watch as the stores now start to weed out the duds that sell nothing, or charging for hosting.
Although the figures for movie production might be up (I'm not sure about that one), it will soon start to fall as the cycle for producing a movie can be up to five years. The effects of P2P are just now being felt, and investors are becoming increasingly wary.
One of their chief worries is not people staying away from movie houses, it's the subsequent DVD sales that were often where the profits were. And these are being directly impacted by P2P.
Felix Oberholzer-Gee is not the only one to have such conclusion in his studies. Actualy, nearly every scientific who has studied the P2P's impact on economy has the same conclusion.
Paristech-Telecom: http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=354513
Canadian Gov.: http://www.ic.gc.ca/epic/site/ippd-dppi.nsf/en/ip01457e.html
OECD: http://www.oecd.org/dataoecd/11/54/34992262.pdf
Ministry of Justice, Education & Culture in Holland: http://www.seo.nl/en/publications/reports/2009/2009-02A.html
The list is endless
Interesting to see so many people jumping on the point that the increase in production of music and films can be attributed to the reduction in production cost of said media.
A drop in production cost will usually lead to an increase in production (whether purely by capacity increase, or more producers entering the market). If general market theory is to be believed, then that would skew the supply and demand relationship in favour of the consumer...
So why each time I go to the cinema does my ticket seem cost more?
I don't mind paying for a product, but I don't appreciate being ripped off for it.
If media producers want to continue to operate then they need to adapt to new market realities. Not delude themselves into thinking they can turn back time.
I can find a lot of music or any file on internet.
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http://pianotutorial.net
I can't ever remember buying a CD that had more than a few good songs on it. Would you go to a restaurant that only served huge meals with 1 item you liked on each platter? CD sales are down because people can get the exact songs they like from other sources (legitimate or not).
Also, the value of a piece of music is indefinite. Only an egomaniac would think that a few months (or less) worth of work is worth an infinite amount of money. Even worse, people think that just because they make something that their creation automatically has value.
It doesn't.