Source+4

"Harvard Gazette: File Sharing May Boost CD Sales." // Home - Harvard Public Affairs & Communications // . Web. 02 May 2011. .

**Source 4:**

1) As sales of recorded music drop precipitously, the music industry has pointed a blaming finger at the dramatic growth of file sharing among individuals who search, share, and download music files from each other.

2) In a recent study, Oberholzer-Gee found that sharing digital music files has no effect on CD sales. "It's a finding that surprised us," he says. "We just couldn't document a negative relationship between file sharing and music sales."

3) Most other research on the market impact of file sharing has relied on survey data. Asking people to self-report about what is, after all, illegal activity almost never produces reliably truthful answers, he says.

4) Oberholzer-Gee and Strumpf's study used statistical models to compare downloads of songs from 680 popular albums in a variety of styles with the actual sales of those albums, as reported to Nielsen SoundScan, the industry's leading sales tracker.

5) The researchers statistically analyzed whether the sale of an album declined more strongly in relation to the frequency and volume of downloaded songs from that album.

6) In one week, for instance, they saw a spike in downloads of songs from the soundtrack to the film "Eight Mile."

7) They would chart sales data for that CD in the following weeks to see if the download activity caused sales to decline.

8) It didn't, they were stunned to find. "This is where we cannot document any relationship between file sharing and subsequent sales," says Oberholzer-Gee, calling the effect "statistically indistinguishable from zero."

9) In fact, the study found that for the most popular albums - the top 25 percent that had more than 600,000 sales - file sharing actually boosts sales. For every 150 songs downloaded, the study showed, sales jumped by one CD.

10) Despite predictions that the Internet would level the playing field of the music industry, giving consumers equal access to obscure, independently produced artists as to chart-topping pop darlings, music downloads parallels music sales.

11) "When you look at what the music people are sharing online, it's very much like looking at radio," he says. Not coincidentally, the early days of music radio brought similar fears that consumers would not purchase records they could listen to for free.

12) The Recording Industry Association of America, the U.S. music industry trade group, has rejected the study's findings and clings to its assertion that file sharing is chipping away at CD sales, which are, undeniably, suffering.

13) Oberholzer-Gee poses several theories on the slack pace of music sales, from what he calls the "CD replacement boom" winding down as older listeners finish replacing their vinyl with CDs, to the poor economic climate, to the rising price of CDs.

14) Despite his and Strumpf's initial surprise at the results of their study, he says, it makes clear economic sense that every download does not displace a CD sale.

15) As sales of recorded music drop precipitously, the music industry has pointed a blaming finger at the dramatic growth of file sharing among individuals who search, share, and download music files from each other.