Source+7

Pollock, Rufus. "Oberholzer and Strumpf (2004)." // Miscellaneous FactZ – The Online Home of Rufus Pollock // . Web. 02 May 2011. . .

**Source 7:**

1) Summarizing, if music downloading reduces the probability of buying by 30%; if 15% of the population download music; if downloaders are twice as likely to buy music than non-downloaders; if -- conditional on buying -- downloaders and non-downloaders buy the same quantity of units, under all these assumptions sales in 2002 would have been 7.8% (0.3*[(0.15*2)/115)]) higher than the level they experienced.(1)

2) This result is plausible given that movies, software, and video games are actively downloaded, and yet these industries have continued to grow since the advent of file sharing.(Oberholzer and Strumpf)

3) These alternative factors include poor macroeconomic conditions, a reduction in the number of album releases, growing competition from other forms of entertainment such as video games and DVDs (video game graphics have improved and the price of DVD players or movies have sharply fallen), a reduction in music variety stemming from the large consolidation in radio along with the rise of independent promoter fees to gain airplay, and possibly a consumer backlash against record industry tactics.(Oberholzer and Strumpf)

4) It is also important to note that a similar drop in record sales occurred in the late 1970s and early 1980s, and that record sales in the 1990s may have been abnormally high as individuals replaced older formats with CDs (Liebowitz, 2003).

5) Our analysis also reveals that other factors than music downloads on file-sharing networks are likely to be responsible for the decline in music sales in 2003. - Peitz and Waelbroeck

6) The results indicate that transition from LPs to CDs might describe the increase in music sales during the 1990’s as well as the recent slowdown.

7) These two other methods indirectly measure the effect of Napster in that they explicate that more than 80% of music sales decrease in 2000 might have resulted from factors aside from Napster.

8) According to Blackburn who investigates this issue the 'bottom' 3/4 of artists sell **more** as a consequence of file-sharing while the top 1/4 sell **less**.

9) (Summarizing their experiment[Oberholzer and Strumf]) Moreover, the estimates are of rather modest size when compared to the drastic reduction in sales in the music industry.

10) (Summarizing more of their experiment) However, the joint effect of the download and the popularity interaction terms is never statistically significant