Filesharing study comes round again.

The Guardian has picked up a compelling study on mp3 filesharing that came out in March and which I covered at the time.

“Felix Oberholzer-Gee, Associate Professor in the strategy unit at Harvard Business School (i.e. this guy is no fool and is coming from a straight business-centric perspective), and Koleman Strumpf, Associate Professor in the economics department at the University of North Carolina, have analysed sales and download data, say ina new report, “The Effect of File Sharing on Record Sales” that “Downloads have an effect on sales that is statistically indistinguishable from zero,” and for popular albums, “the impact of file sharing on sales is likely to be positive”.

During the last quarter of 2002, the pair gathered data from two peer-to-peer file sharing servers on the OpenNap network and matched individual downloads to the weekly sales figures of 680 chart albums.

“Our hypothesis was that if downloads are killing music, then albums that are downloaded more intensively should sell less,” says Strumpf. But, after adjusting for the effects of popularity, they discovered that file sharing has “no statistically significant effect” on sales.

Prior to Oberholzer-Gee and Strumpf’s report, there were no empirical studies based on actual file sharing behaviour, and the music industries in the US and the UK have based their policies on, at best, incomplete research. At worst, the surveys and analyses they quote are misleading and inaccurate.

Some even question whether the fall in sales the RIAA quotes is real, or a product of a creative redefinition of the word “sale”. Even if it is real, there is one final fly in the ointment that can’t easily be explained away: during the past nine months, CD sales in America have increased by 7%, despite continued growth in file sharing.

As Strumpf says: “If file sharing is killing record sales, why are records starting to sell better?” ”

From the Guardian

You can get the pdf of the study here.

His home page: http://pine.hbs.edu/external/facPersonalShow.do?pid=251462

A Harvard Business Review interview with him is here — I missed this when it came out on the Solstice — I was busy, as you can imagine, and I don’t subscribe to the HBR any more.

Oh, and there’s a Phd thesis from a Princeton student saying the same thing but with a slightly less compelling argument here. Oh, and if you go to the Princeton home page, you get a picture of Andre from Outkast goofing around with some professors. Seriously.

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