Source+10

Silverthorne, Sean. "Music Downloads: Pirates—or Customers? — HBS Working Knowledge." // HBS Working Knowledge - Faculty Research at Harvard Business School // . 21 June 2004. Web. 02 May 2011. .

**Source 10:**

1) Internet music piracy not only doesn't hurt legitimate CD sales, it may even boost sales of some types of music. 2) Convinced that illegal downloading and file sharing has robbed them of billions of dollars after four consecutive years of falling music sales, they criticized the team's methodology, which consisted of monitoring 1.75 million downloads over 17 weeks in 2002, scouring through server logs from OpenNap (an open source Napster server), and comparing the sales of almost 700 albums as reported by Nielsen SoundScan. Oberholzer and Strumpf concluded that there was almost no relationship between the two. 3) The researchers believe that most downloading is done over peer-to-peer networks by teens and college kids, groups that are "money-poor but time-rich," meaning they wouldn't have bought the songs they downloaded. 4) ..the music industry can't claim those downloads as lost record sales.

5) ..illegal downloading may help the industry slightly with another major segment, which Oberholzer and Strumpf call "samplers"—an older crowd who downloads a song or two and then, if they like what they hear, go out and buy the music.

6) “Our study provides the first serious evidence that file sharing cannot explain the decline in music sales in the last couple of years. In addition, in the last two quarters, music sales increased while file sharing has become even more popular.”

7) In view of our evidence and these new trends, even the Recording Industry Association of America (RIAA) now states that file sharing is only "one factor, along with economic conditions and competing forms of entertainment that is displacing legitimate sales." The industry is rethinking its position, although change occurs slowly.

8) “Our research shows that only 45 percent of music files downloaded in the United States come from computers in the U.S. More than 100 countries supply files to the U.S. file-sharing community, and many of these countries do not have strong records of protecting copyrighted materials. The RIAA does not stand a chance to implement an effective legal strategy in all these countries.”

9) “the RIAA's legal strategy does not even seem to work here in the United States. Despite the lawsuits—the RIAA has sued about 2,000 individuals to date—file sharing is more popular than ever.”

10) “Our research shows that people do not download entire CDs. They download a few songs, typically the hits that one would also hear on a Top 40 station.”

11) “This suggests that P2P is much like the radio, a great tool to promote new music. The music industry has of course long recognized that giving away samples of music for free over the airwaves can stimulate sales. The same seems to hold for P2P.”

12) “The problem with radio as a promotional tool is that it can be quite expensive for labels to get radio stations to play their music.”

13) “P2P networks are promising because they make the market for music promotion more competitive. From the perspective of the music industry, the more competition among P2P services, the less costly it will be to promote music.”