Illegal Music Downloads Not Hurting Industry, Study Claims

Controversial new European research supports pro-piracy arguments

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It’s common sense: taking a thing that you used to pay for is not good for the people who created that thing. But when it comes to entertainment piracy, lots of folks—whether motivated by statistical curiosity, forward-thinking vision or a desire to rationalize their own law-breaking—have argued that things aren’t quite so simple. Now, with the release of a new analysis of 16,000 European music consumers, those on the side of piracy have evidence to back them up.

A few findings of the study — conducted by Luis Aguiar and Bertin Martins using Nielsen “clickstream” data, and released by the European Commission Joint Research Centre — confirmed assummptions: attitudes differed by country, and piracy definitely affects off-line music sales.

But one was startling: illegal music downloads, they discovered, had essentially no effect on the number of legal music downloads:

Perhaps surprisingly, our results present no evidence of digital music sales displacement. While we find important cross country differences in the effects of downloading on music purchases, our findings suggest a rather small complementarity between these two music consumption channels. It seems that the majority of the music that is consumed illegally by the individuals in our sample would not have been purchased if illegal downloading websites were not available to them. The complementarity effect of online streaming is found to be somewhat larger, suggesting a stimulating effect of this activity on the sales of digital music.

Specifically, the study found that legal purchases would be about 2 percent lower without illegal downloading available—meaning, yes, illegal downloads boost legal downloads. Their conclusion: people who download pirated music mostly do so for tunes they wouldn’t have ever spent money on. The positive effect of streaming was even larger.

(MORERevenue Up, Piracy Down: Has the Music Industry Finally Turned a Corner?)

One interesting finding from the study is the observation that illegal downloaders were active in music consumption during more than twice as much of the year as legal-only consumers—including being more active on legal sites. In other words, people who like to listen to a lot of music are more likely to listen to music from multiple sources, while people who don’t really care for music are more likely to download only legally but not very much overall.

This complicates the evidence, because there’s no way to know whether those music lovers would consume the same amount total—or like music just as much—if illegal downloads weren’t an option (though the authors tried to track how many music-related sites the participants visited while not actually purchasing or listening to music).

Other findings include:

  • Women and men stream music about equally but men download more.
  • People with higher education levels stream more music, but income does not affect streaming levels.
  • Spanish people click on illegal downloading sites 230% more than Germans, with Italians coming next at 134% more than their neighbors to the north. The study’s authors speculate that these differences could be due to cultural differences and/or economic situations in the countries involved.

(MORE: Why YouTube is Launching a Music Service)

Not everyone is ready to take these study results at face value. The International Federation of the Phonographic Industry released a response on Mar. 20…and they are not happy:

IFPI believes the [Joint Research Centre] study is flaws and misleading. The findings seem disconnected from commercial reality, are based on a limited view of the market and are contradicted by a large volume of alternative third party research that confirms the negative impact of piracy on the legitimate music business.

The IFPI notes that clicking on a legal download website does not equal buying music, that past studies have found that the “some people buy and steal a lot of music because they love music” argument is counterbalanced by the many people who consume a huge amount of money purely illegally, and that the study ignores other music-consumption options like subscription services.

And of course, as the study’s authors do acknowledge, sales data are not the only reason music-industry professionals don’t like piracy. Even if the IFPI’s criticisms were unfounded, the copyright and ethical implications remain unchanged: if you went into a store to steal a candy bar and, in the process, found lots of other stuff you were willing to pay for, would that make it okay to steal the candy? And what does it mean if you don’t really care?

7 comments
GraemeDonaldson
GraemeDonaldson

It's enough to read the abstract of that paper to realise this article is terribly inaccurate...

MadMike
MadMike

im curious to all the people thinking this article is stupid and everyone should legally buy and download their music let me ask you one question. whats the diffrence from when you had a blank cassette in your boom box and you hit record to make yourself a copy of the song without paying

sbpinnyc
sbpinnyc

Lily, are you an intern or perhaps just out of school? Someone needs to teach you how to read studies like this because, seriously, you not only misread and misunderstood it, you reported it incorrectly and inaccurately. Going for the headline is not a credible thing to do.

jmcconkey0009
jmcconkey0009

I dislike the candy bar metaphor. The candy in its original form is like a song yes, an item so to say that was manufactured. It had a cost involved, R&D all of that. Same for a song. The difference comes when the candy bar is mass produced. There are variable costs associated for ever bar on the market, the cost of chocolate, wrapping ect. When a song is proliferated on the Internet the costs are over an done with, no more variable costs associated. Therefore what are you stealing by pirating? The artist has nothing to steal except profits. And if your an artist who simply in it for the money I can see how this may be troubling. But a true artist who cares about the people, the emotion conveyed, and creating timeless pieces, then you should be filled with ebuliance that people want to steal your music. I'm an artist myself, and I understand that not everyone has the discretionary income to spend to hear a song I've created, but they all should have a right to enjoy the music, and if they do truly enjoy it they will be more inclined when there income does increase to support the artists. So yes, I side with freeing the music and the rise of independent artists.

dockanvas
dockanvas

Going to be honest, I thought that said International Federation of the Pornographic Industry.

KaceyBaker
KaceyBaker

This article represents absolute stupidity and a ungrateful generation. 

Until you understand the science of the music industry, where it's been and the low it is currently at, don't embarrass yourself by even covering this profound display of ignorance!

The world has fallen so low and from the truth that society has started convincing themselves that wrong is right. As long as there is an transparent excuse than there is no reason to fell guilty? Is that the way it works now?

This is what's wrong with the world, promoting this garbage.

I know I'm coming on strong, but I use to get payed a $20k advance per track with points for publishing and other bits n pieces that I wont touch on because common people don't understand. These days record labels and promoters do not pay for my work and tell me I should be thankful to be associated with them on the basis that they might be able to help me get some paid work. Get F**ked!!

So before people are so ridiculously stupid to believe DL haven't hurt people, why not ask the real people who's music is being downloaded. People who were making a lucrative career pre the DL boom. Not stupid irrelevant tracking or studies that champion stupidity. 

Every one reading this, imagine checking your bank account next month to see a thief hacked your account before you could withdraw your money, you worked hard for all month for that pay and a hacker steals it. Now imagine this happened every month for a few years forcing you to re think your career to avoid this hacker, then imagine an entire nation, country world having their monthly pay packets stolen and hacked sending you broke. 15 years later having to rethink your career choices you one day read an article called 'Hackers not hurting any one'. This is the reality. Absolute $hit.