Suw Charman @ The Guardian
Listen to the flip side

New research suggesting that file sharing has no impact upon sales of CDs has, not surprisingly, angered the music industry. [our very own] Suw Charman reports

Suw has a good article in the Guardian about the paper (PDF) by Associate Professor Felix Oberholzer-Gee of Harvard Business School in Boston and Professor Koleman Strumpf of the University of North Carolina where they assert that "Downloads have an effect on sales which is statistically indistinguishable from zero, despite rather precise estimates." It's an important first paper in the battle against the rampant idea that file sharing is destroying the music business and Suw does a good job introducing it and additional ideas to public in a more popular medium. Yay!

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Also relevant is the paper by Ian Condry of MIT looking at piracy patterns in the US vs. Japan.

http://www.technologyreview.com/blog/blog.asp?blogID=1493

Condry quotes the same Oberholzer/Strumpf paper in his work.

I wouldn be reluctant to place too much store on this paper, unless you have read, understood and accepted pages 13 to 23 in detail. The way in which they establish causality isn't all that strong in my view. I would question whether the exogenous variables they are using (track length; German school holidays; network conditions) cause significant enough variance for a long enough period to be useful, or if they are really exogenous at all (holidays and network conditions factors are driven by the season, just like the music industry itself; albums with greatly different average track lengths are likely to appeal to different demographics).

While I am very cautious, the paper does bring together some interesting data. I think there are a lot of opportunities for testing the hypothesis further though, for example, by looking at online music sales to broadband users, or looking at how roll-out of broadband is correlated to music sales in a particular area.

I agree Antoin. It's a good "first paper". We need more.

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