Record Industry Sales Not Hurt by File-Sharing, Professors Say

CHAPEL HILL, N.C.
Dr. Koleman S. Strumpf of the University of North Carolina at Chapel Hill and Dr. Felix Oberholzer-Gee of the Harvard Business School have recently completed and released a study that contends music file-sharing among computer users has not been a cause for reduced U.S. record sales. Claims by the record industry based on surveys of those admitting to illegal downloading of music files have been made on untrustworthy data, according to the professors. "Those who agree to have their Internet behavior discussed or monitored are unlikely to be representative of all Internet users," the authors wrote in "The Effect of File Sharing on Record Sales: An Empirical Analysis."
Studying music downloaders over a 17-week period in the fall of 2002, Oberholzer-Gee and Strumpf compared that activity with music purchases during that time. Their conclusion: Jumps in downloading had virtually no measurable effect on sales. Given the worst-case example, "it would take 5,000 downloads to reduce the sales of an album by one copy," according to the authors.  
 In response, the Recording Industry Association of America issued a report titled "Downloading Hurts Sales," blasting the authors' study as incomplete and flawed. The national news media, including the New York Times, featured stories about the study.
In contrast to the recording industry's belief that sales of popular albums declined as song downloads increase, the researchers observed no correlation between downloads and sales. It was concluded that file sharing doesn't hurt sales because those who do it wouldn't buy music anyway, according to Strumpf.