From: Ad 

http://arstechnica.com/news.ars/post/20070212-8813.html

"A new study in the Journal of Political Economy by Felix
Oberholzer-Gee and Koleman Strumpf has found that illegal music downloads
have had no noticeable effects on the sale of music, contrary to the claims
of the recording industry.

Entitled "The Effect of File Sharing on Record Sales: An Empirical
Analysis," the study matched an extensive sample of music downloads to
American music sales data in order to search for causality between illicit
downloading and album sales. Analyzing data from the final four months of
2002, the researchers estimated that P2P affected no more than 0.7% of
sales in that timeframe.

The study compared the logs of two OpenNAP P2P servers with sales data from
Nielsen SoundScan, tracking the effects of 1.75 million songs downloads on
680 different albums sold during that same period. The study then took a
surprising twist. Popular music will often have both high downloads and
high sales figures, so what the researchers wanted was a way to test for
effects on albums sales when file-sharing activity was increased on account
of something other than US song popularity. Does the occasionally increased
availability of music from Germany affect US sales?

The study looked at time periods when German students were on holiday after
demonstrating that P2P use increases at these times. German users
collectively are the #2 P2P suppliers, providing "about one out of
every six U.S. downloads," according to the study. Yet the effects on
American sales were not large enough to be statistically significant. Using
this and several other methods, the study's authors could find no
meaningful causality. The availability and even increased downloads of
music on P2P networks did not correlate to a negative effect on music
sales.

"Using detailed records of transfers of digital music files, we find
that file sharing has had no statistically significant effect on purchases
of the average album in our sample," the study reports. "Even our
most negative point estimate implies that a one-standard-deviation increase
in file sharing reduces an album's weekly sales by a mere 368 copies, an
effect that is too small to be statistically distinguishable from
zero."

The study reports that 803 million CDs were sold in 2002, which was a
decrease of about 80 million from the previous year. The RIAA has blamed
the majority of the decrease on piracy, and has maintained that argument in
recent years as music sales have faltered. Yet according to the study, the
impact from file sharing could not have been more than 6 million albums
total in 2002, leaving 74 million unsold CDs without an excuse for sitting
on shelves."


Hummm....so it looks like a "job for the boys" for the RIAA
backed up by FUD injected into the majors.

Adam

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