P2P & the Purchase of Music

In The Impact of Music Downloads and P2P File-Sharing on the Purchase of Music: A Study for Industry Canada researchers found “no direct evidence to suggest that the net effect of P2P file-sharing on CD purchasing is either positive or negative for Canada as a whole.” However, when it comes to the “Canadian P2P file-sharing subpopulation” the study found that Canadians who engage in P2P file-sharing actually buy more music. For every 12 downloaded songs, CD purchases increase by 0.44.

With respect to the other effects, roughly half of all P2P tracks were downloaded because individuals wanted to hear songs before buying them or because they wanted to avoid purchasing the whole bundle of songs on the associated CDs and roughly one quarter were downloaded because they were not available for purchase.

This “‘market creation’ effect of P2P file-sharing” is interesting indeed. Through P2P file sharing one can access content that is not available for purchase.

It will be interesting to see how the Music Industry responds. The Industry presents correlative evidence, that in the last five sales have decreased by $465 million while P2P file sharing has increased, to suggest that they’ve been losing money due to file-sharing but this report dismantles that claim. This report may also be helpful in reaffirming the “private copying” prevision in the Copyright Act that enables Canadians to legally copy and share music.

The Copyright Act contains a special exception for “private copying”: it permits the copying of music files “onto an audio recording medium for the private use of the person who makes the copy”, but does not permit copying for the purpose of “distributing” or “communicating to the public by telecommunication” (s.80). It is generally accepted that downloading music for personal use is legal under this section.

One comment.

  1. One of my classes suggested that the observed decline in CD sales is simply because of the increase in DVD sales. People are switching from buying lousy music to buying lousy movies.

    Basically, none of these technologies has been stable for long enough to get any idea of a baseline level of purchases so as to be able to observe the commercial effect of some technological or social change.

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