STUDY SAYS FILE TRADING HAS LIMITED EFFECT ON SALES

In the study, music downloads were tracked for 17 weeks in 2002, matching file transfer data with the market performance of the songs and albums. Even high traffic of songs translated into an effect on albums sales that was “statistically indistinguishable from zero,” according to the study.

Its authors wrote: "We find that file sharing has only had a limited effect on record sales. While downloads occur on a vast scale, most users are likely individuals who would not have bought the album even in the absence of file sharing. And these are your tax dollars at work."

The report, which used data obtained directly from Kazaa and Morpheus, was met with cheers from P2P networks and jeers from the RIAA. Such is progress.

Sharman Networks CEO Nikki Hemming said: "We welcome sound research into the developing peer-to-peer industry, and this study appears to have covered some interesting ground. Consider the possibilities if the record industry actually cooperated with companies like us instead of fighting."

Said RIAA spokeswoman Amy Weiss: "Countless well-respected groups and analysts, including Edison Research, Forrester, and the University of Texas, among others, have all determined that illegal file sharing has adversely impacted the sales of CDs. Our own surveys show that those who are downloading more are buying less."

The research was conducted by Harvard Business School associate professor Felix Oberholzer and University of North Carolina, Chapel Hill associate professor Koleman Strumpf. The pair used logs from two OpenNap servers at the end of 2002 to observe about 1.75 million downloads over a 17 week period. They found that the average user logged in twice during that period, downloading about 17 songs.

They chose a random sample of 500 albums from the sales charts and compared the sales of these albums to the number downloads. In their findings, they believe that it would take 5,000 downloads to displace the sale of one CD, meaning despite the huge amount of file-sharing, the overall slide in album sales over the past several years couldn’t be solely the fault of swapping. The researchers also said that there could be a slightly positive effect on the sales of the biggest albums.

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