A number of studies have found that file sharing has a negative impact on record sales. Examples of such studies include three papers published in the April 2006 issue of the Journal of Law and Economics (Liebowitz, Rob and Waldfogel, Zentner). Alejandro Zentner notes in another paper published in 2005, that music sales have globally dropped from approximately $38 billion in 1999 to $32 billion in 2003, and that this downward trend coincides with the advent of Napster in June of 1999. Using aggregate data Stan J. Liebowitz argues in a series of papers (2005, 2006) that file sharing had a significant negative impact on record sales.
However, a widely cited paper published in February 2007 concludes that file sharing has no negative effect on CD sales. This paper by Olberholzer-Gee and Strumpf, was published in the Journal of Political Economy, and is the only paper which analyzes actual downloads on file sharing networks. Data gathered from tracking downloading on OpenNap servers indicates that most users logged on very rarely and when they did log on they only downloaded a little more than one CD’s worth of songs. To show how these downloads affected album sales they tracked sales and downloads of 500 random albums of varying genres and after doing so found that illegal downloads would only be a small force in the decrease in album sales, possibly even slightly improving album sales of the top albums in stores at the time.
CNET News.com staff writer John Borland reports, “even high levels of file-swapping seemed to translate into an effect on album sales that was "statistically indistinguishable from zero". Some researchers believe that massive copying has been occurring ever since the invention of tape cassettes and the increased economic impact of simpler access to copying provided by computer networks does not seem to have been large.[citation needed].
In March 2007 the Wall Street Journal found that CD sales have dropped 20 percent in one year, which the Wall Street Journal interpreted as the latest sign of the shift in the way people acquire their music. BigChampagne LLC has reported that around one billion songs a month are being traded on illegal file-sharing networks. As a result of this decline in CD sales, a significant amount of record stores are going out of business and “...making it harder for consumers to find and purchase older titles in stores.”
The debate on how file sharing has impacted on the legal sale of music, especially CDs, is underlined by figures showing a decline in music or record stores. According to an article published by the Almighty Institute of Music Retail, an estimation of 900 independent record stores have closed since 2003, leaving 2,700 stores in the USA. Carolyn Draving, the owner of the record store Trac Records, which is closed after 32 years, believes the downfall is a direct result of the illegal internet downloads. She explains that she lost many long-time consumers to the internet and knows for certain that a few stopped coming in because they just downloaded instead. Another owner, Warren Greene of Spinsters Records, claims that nobody buys CD’s anymore and that most of his customers have turned to the internet in order to obtain their music.
However, a widely cited paper published in February 2007 concludes that file sharing has no negative effect on CD sales. This paper by Olberholzer-Gee and Strumpf, was published in the Journal of Political Economy, and is the only paper which analyzes actual downloads on file sharing networks. Data gathered from tracking downloading on OpenNap servers indicates that most users logged on very rarely and when they did log on they only downloaded a little more than one CD’s worth of songs. To show how these downloads affected album sales they tracked sales and downloads of 500 random albums of varying genres and after doing so found that illegal downloads would only be a small force in the decrease in album sales, possibly even slightly improving album sales of the top albums in stores at the time.
CNET News.com staff writer John Borland reports, “even high levels of file-swapping seemed to translate into an effect on album sales that was "statistically indistinguishable from zero". Some researchers believe that massive copying has been occurring ever since the invention of tape cassettes and the increased economic impact of simpler access to copying provided by computer networks does not seem to have been large.[citation needed].
In March 2007 the Wall Street Journal found that CD sales have dropped 20 percent in one year, which the Wall Street Journal interpreted as the latest sign of the shift in the way people acquire their music. BigChampagne LLC has reported that around one billion songs a month are being traded on illegal file-sharing networks. As a result of this decline in CD sales, a significant amount of record stores are going out of business and “...making it harder for consumers to find and purchase older titles in stores.”
The debate on how file sharing has impacted on the legal sale of music, especially CDs, is underlined by figures showing a decline in music or record stores. According to an article published by the Almighty Institute of Music Retail, an estimation of 900 independent record stores have closed since 2003, leaving 2,700 stores in the USA. Carolyn Draving, the owner of the record store Trac Records, which is closed after 32 years, believes the downfall is a direct result of the illegal internet downloads. She explains that she lost many long-time consumers to the internet and knows for certain that a few stopped coming in because they just downloaded instead. Another owner, Warren Greene of Spinsters Records, claims that nobody buys CD’s anymore and that most of his customers have turned to the internet in order to obtain their music.
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