Over the weekend, Techmeme (the site I visit daily to see what’s buzzing in the tech blogosphere) brought to my attention a study that was completed in Canada that goes hand in hand with my last post.
The study called The Impact of Music Downloads and P2P File-Sharing on the Purchase of Music: A Study For Industry Canada found that there is a positive correlation between peer-to-peer downloading and CD purchasing.
The study surveyed over 2,000 Canadians on their music downloading and purchasing habits. And, according to Michael Geist’s excellent blog post the study had two key findings:
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1) When assessing the P2P downloading population, there was “a strong positive relationship between P2P file sharing and CD purchasing. That is, among Canadians actually engaged in it, P2P file sharing increases CD purchases.” The study estimates that one additional P2P download per month increases music purchasing by 0.44 CDs per year.
2) When viewed in the aggreggate (ie. the entire Canadian population), there is no direct relationship between P2P file sharing and CD purchases in Canada. According to the study authors, “the analysis of the entire Canadian population does not uncover either a positive or negative relationship between the number of files downloaded from P2P networks and CDs purchased. That is, we find no direct evidence to suggest that the net effect of P2P file sharing on CD purchasing is either positive or negative for Canada as a whole.”
I’m still trying to figure out how giving away free low bitrate digital downloads (like Radiohead did) and p2p file-sharing will turn into an actual business model for the music industry.
It still seems like the big money is to be had by allowing the major labels to promote and distribute music through the old channels (like cross-promotion with teen-reality shows on MTV and special exclusives with retailers like Wal-Mart).
Personally, I think it would be better if artists and music fans used a more direct distribution channel like the Internet to connect. I think it would be better because it reduces the gatekeeper/tastemaker role of major labels and puts it into the hands of actual music fans (and music buyers).
However, let it be said that we will always need major business players to distribute and promote music since most music artists don’t have these skills.
