Norwegian P2P downloaders buy more music

Researchers at the BI Norwegian School of Management conducted a study that concluded that downloading infringing copies of music strongly correlates buying above-average amounts of music. The music industry says that this doesn't prove that downloading from P2P entices people to buy music, and you know what? I think they're kind of right.

The Norwegian study closely matches the findings from a Canadian study a few years ago. Both studies show that people who download a lot buy a lot of music -- and other research and interviews I've conducted suggest that downloading a lot of music is also correlated with doing other music-related stuff, like attending concerts, making mixes for friends, playing music, recording music, and so on.

There's a simple explanation for this: if you really love music, you do lots of music-related things. If you're in the 20 percent of fans that buys 80 percent of records, you're probably in the 20 percent of downloaders that download 80 percent of music, the 20 percent of concertgoers that buy 80 percent of the tickets, and so on. The moral is that music superfans love music and structure their lives around it.

Which means that when the music industry targets "the worst offenders" in its legal campaigns against downloaders, the people they're attacking are the ones who are spending the most on music.

Now, does this mean that downloads end up interfering with sales of music, or not? My guess is that it's a little of both. As Tim O'Reilly wrote, Piracy is Progressive Taxation. Obscure acts probably get more sales than they lose. Modestly well-known acts probably lose and gain about the same. Very famous performers probably lose a little. This has been the conclusion in the quantitative studies in music and books to date, and it makes sense to me.

Unsurprisingly, BI found that those between 15 and 20 are more likely to buy music via paid download than on a physical CD, though most still purchased at least one CD in the last six months. However, when it comes to P2P, it seems that those who wave the pirate flag are the most click-happy on services like the iTunes Store and Amazon MP3. BI said that those who said they download illegal music for "free" bought ten times as much legal music as those who never download music illegally. "The most surprising is that the proportion of paid download is so high," the Google-translated Audun Molde from the Norwegian School of Management told Aftenposten.

Study: pirates biggest music buyers. Labels: yeah, right

• [Tigerbomb]

  “Obscure acts probably get more sales than they lose.”

  Anecdotally, small touring bands seem to be selling fewer copies. Sure, they’ve probably seen a rise in enquiries from Moldovia but the boxes of discs they’re carting around in the van are unsold because the people who might’ve picked one up at the show have already downloaded it.

  I’ve also been told that despite the hype, the bottom has started to fall out the 7″ market too.

• [Phikus]

  When I had a gigging band, we made our CDs available to purchase at our shows and we also put them up on our website for free, including the artwork / sleeve info. We would encourage folks to download, as I could have happily done without carting around CDs from show to show. As a band trying to get exposure, I saw CDs more as business cards than product. We gave away a lot of them for free. We also allowed people to record our shows, as long as they made no money from copies of shows they spread around. It’s all about finding your audience initially, and technology allows you to do this as an up and coming band easier than ever before, cutting out the traditionally gate-keeper middle-men of the Industry.

  Once you get to the point that you have found your niche audience, then you really don’t have to worry about whether folks are buying your CDs, because most people can’t be bothered to download them. For everyone that downloads for free, there are 10 people still buying your records, as long as you put something into the production value of the CD. Your shows are filling clubs which is paying you enough to do your thing, and you can then make more $ if you need to by signing your CDs at your shows, increasing their value and personalizing experiences for your fans.

  I buy a hell of a lot of music, and download as well, often for free. Most of my downloads are what is not commercially available. Sometimes I download an album to have it as soon as it comes out, only to buy it a couple of weeks later when I have the spare cash, because:
  a) I like to support artists I love and…
  b) When good production value is put into art / liner notes, etc, I like to have that stuff, having grown up with vinyl. I will always buy the “deluxe edition” of albums I love and have often re-bought classics several times over the years whenever there is a great quality remaster offered. (I have re-bought the entire cannon of Elvis Costello twice now on CD because they increased the value by making a 2nd disk of outtakes and unreleased material available for each album.) You rarely had this kind of re-income for the same basic product much in the vinyl era (the good ol’ days, if you believe the Music Industry hype.)

  Conversely, if an artist puts nothing into the quality of the hard copy of the product (i.e. the brown paper bag cover), then I don’t feel obliged to do more than download the music, if I have to have it.

  So, it’s just a paradigm shift. Make less filler on your albums if you want people to buy the whole thing and put some coolness into the sleeve and people will buy your hard copies. Enough with the whining from an industry that is just going through a transition, not dying. The labels need to stop attacking fans and concentrate more on their strengths, like distribution, or they may indeed find themselves out of jobs.

• [Tigerbomb]

  Also, Swedish online retailer closes down. Blames piracy.

  http://www.dotshop.se/ds/news.php?nid=322

• [IamInnocent]

  This is a great article, very well thought out just as well as your comments Cory: much appreciated.
  The reasons for the claimed decline in sales for recorded music would really need further analysis before squarely accusing piracy. Nevertheless, the opportunity to pick’n'choose single songs after sampling the album, thanks to P2P and the iTune model, may very well be the most important factor. IMO, it is about time that the industry’s grip on our wallets loosen up a bit.

• [Anonymous]

  My son is 20 now and he never had bought a CD in his young life.
  But he has a separate harddisk of 500 Gigabyte full of downloaded popmusic, of course all from ilegal sites and he never paid a penny or cent for all this.

• [BCJ]

  Through the magic power of Anecdotal evidence, I thought I would throw in my 2 cents.

  I download music through bittorrent (lately, about an album a month, but at peak times, about 6 albums per month), I also buy a lot of music (usually about 4 CDs a month, last month though I easily spent $250). When I download music, it almost always is to check out new bands (or to get access to music I could not reasonably buy), and the albums I like I tend to buy (though sometimes it takes a while).

  I have a friend who has 500GB+ of downloaded music. He downloads more music than anyone else I know. He probably spends close to $1500 a year buying music.

  In general, my experience has been that people who download a lot of music love music, and that people who love music tend to buy a lot of music. Are they buying less than they would if there wasn’t file sharing–it’s possible (my main limit in purchasing music is how much money I have, not how much music I’ve downloaded), but they are still buying a lot more music than the average consumer (I wouldn’t be surprised if most of the losses are from casual music listeners who download a couple of individual tracks instead of buying marginal albums).

  That being said, I really don’t agree with downloading movies illegally. I don’t think the same try & buy philosophy is used (I tend to watch movies only once), and I think that it directly cuts in to ticket sales (I’m not saying that 1 movie download = 1 lost ticket/dvd/rental, just that people who download movies pay for a lot less movies than they would otherwise). I have only (illegally) downloaded 2-3 movies, and in every case, it was because the movie was obscure enough that I could not buy or rent it (If you can buy, Godspeed You Black Emperor, I certainly don’t know where).

• [BCJ]

  @6 TIGERBOMB

  but is it really piracy that caused them to go under? I would argue that Amazon and the iTunes Store are at least as big of threats to music stores as piracy (though I have absolutely no way of backing this one up).

• [BCJ]

  Thinking what I just said a bit, I think I can actually only make the claim that the people I know who buy a lot of music download a lot of music, I can’t necessarily say that the people who download a lot of music, buy a lot of music.

  Also, I am not sure how accurate my guess is on how much I download. Suffice it to say that of the ~50GB of music I have on my computer, ~40GB is legally acquired.

• [PaulR]

  Anonymous @ 1, Felix @ 2:

  The statement “the 20 percent of concertgoers that buy 80 percent of the tickets” is valid.

  The other 80% of concertgoers buy 20% of the tickets. In other other words, there’s a hard-core bunch of concertgoers who go to ALL the concerts. They buy most of the tickets. There is a group of concertgoers, four times larger, who only go every once in a while.

• [Anonymous]

  Old music threatens new music:

  Anyone spending time listening to not-new music threatens the livelihood of conscientious musicians and craven producers equally.

  Availability of ancient music and movies obviates the need (and revenue stream) of newer materials, plain and simple.

• [shakti1]

  The BI report claims that P2P file sharers are likely to buy ten times as much legal music as people who never download illegally. The Norwegian study looked at almost 2,000 online music users, all over the age of 15. We also saw that users stating that they were involved in illegal P2P file sharing were in fact the legal download services’ biggest clients. http://www.loudbeats.com

• [mokey]

  this is pretty much how i’ve always felt things were going down. i mean, if you’ve got a hard drive full of 80s japanese hardcore, chances are you’d be listening to that stuff whether it was online or not.

  and loving music so much almost certainly drives people to support those artists. for example, 90% of the music i buy is from touring DIY bands. like, bands that play house shows and are actually losing money just to play music they love. the other 10% is just that need to actually own (even though it’s got major distribution) whatever certain record it is that i’ve been listening to non-stop for the last few months.

• [Anonymous]

  yeh, i just threw out about 200 copied tapes from when i was a teenager in the 1980s. to make more room for my bought CD and vinyl collection. freesharing recruits fans to music. once you’re a music fan, you realise that mp3 quality is rubbish anyway.

• [Anonymous]

  Dotshop was a great service, but had they turned their operation into an online service I would have used them a LOT more. Boomkat’s online service is fast becoming very, very impressive, not to mention that you can buy many releases as both mp3 (320kbps) *and* lossless FLAC files. The latter is a great bonus in my book.

  And it seems Boomkat is doing ok. I’ve certainly taken a large amount of flac from them. Ha-hum.

  Regarding the survey: Aren’t they turning the cause and effect on its head? I would suggest that it is people who buy a lot of music that download a lot of music, not people who download a lot of music that buy a lot of music.

  I know a considerable amount of people who download music, but *never* buy any. I would venture to guess that 80 per cent (at least) of The Pirate Bay crowd seldom, if ever, buy anything like a CD (or online release) or movie/DVD/Blu-ray/whatever.

• [redrichie]

  “Is the music industry dead yet, is the music industry dead yet?”

  I’m glad that the study above is not being used to suggest that if you download you’ll automatically buy more music and go to concerts. As it happens, the major labels going down won’t affect my music habits one iota because I haven’t partaken of mainstreamery for years. Although…I suspect they won’t. They’ll just change.

  This is anecdotal, but it does seem to me that the worry isn’t for people, like me, who got into music pre-Napster and aren’t ideologically focused on bringing down the industry of entertainment (like I say, I don’t care what happens to the majors) but those who grew up and got into music with the “you can get it free on the ‘net” attitude.” Speak to them and you’ll find that most of them actually don’t have any strong opinions either way, it is just the way it is for them.

  Out of interest, I’d be interested to know why the “home taping is killing music campaign didn’t kill music, HAH!” argument gets trotted out so often? The thing about home taping is that if I wanted to make a copy of something to share with friends pre-Internet, I’d have had to have a physical copy of it to copy for them and I’d know fairly intimately all those that I chose to share it with. Now it’s possible to “share” the one copy perfectly millions of times over with millions of your closest friends around the world.

  Mind you (and against my question *slightly*) I read, recently, an interview with Phil Todd of Ashtray Navigations, er, “fame” who said that, basically, the reason that his band sounds the way that it does now is from hearing nth generation cassette copies of old and long out of print psych albums as a kid. And you know what? It’s true!

  Mind you, the act of copying there added something (however unintentionally) to the music which led to creativity where, as is oft pointed out, copies done on the web are perfect (that’s how it works) so the two actions are still not identical as far as I can tell. Surely the point is that things have moved on, so arguments from the 1980s don’t have any place here?

• [dculberson]

  @BCJ (8) – I actually do exactly what you described but with movies. I download a lot of movies and TV shows but also buy a lot. Why? Because the quality is better, it’s nice to have physical media, and I like to support the things I enjoy. I do re-watch movies and TV shows a lot – they’re nice to exercise to and such. I own a few hundred DVDs and have downloaded hundreds of movies.

  I guess what I’m saying is while you might be a certain way with music but not movies, there are people who are the opposite. So while you don’t like to re-watch movies, there are many people that do – the same people probably download and purchase a lot more movies than you do.

• [Anonymous]

  what is one to do when an album/release is out of print or costs too much to acquire? should i just not listen to it then?

• [BCJ]

  @13 DCULBERSON

  Good point, I retract my previous statement about movies. That will teach me to avoid using the exact same broad statements that I was just arguing against.

• [Anonymous]

  “Obscure acts probably get more sales than they lose.” Nope. Please, please Cory, stop posting things that you know nothing about. Obscure acts have seen sales collapse. I am desperate for books to go the same way – for a mass market e-book reader device to achieve the same market saturation as MP3 players. Then you will realise for yourself what ease of copying means for content creators.
  For what it’s worth, I don’t think anyone should face legal sanctions for downloading, and trying to hold back the tide is futile – copyright is dying. My point is to say to you, Cory, you continually post these stories that (so called) “piracy is a good thing” and this is at best a gross simplification of the truth.

• [Anonymous]

  “the 20 percent of concertgoers that buy 80 percent of the tickets”

  empty venues?

  (perhaps “the 20 percent of fans who buy 80 percent of the concert tickets”?)

  [Nitpicking, I know. Sorry.]

• [Feliz]

  #1: You beat me to it.

  Otherwise, fascinating study. Makes perfect sense. Also, don’t you get the impression RIAA has been well aware of this for years?

• [blackboxensemble]

  Other than the one person who was in a band once, none of you posters have anything to lose, but everything to gain (in a short-sighted way), from pirating. And you can’t use the ex-band guy’s statements to justify illegal downloading – because he was *willing* to give his music away. As a composer, I am not – and most other actual working composers and musicians aren’t either, and that is the point. You can’t violate someone’s rights just because you think you ought to be able to. It’s just selfish, really. Own it.

• [Anonymous]

  This is in line with research done in the 70s, when taping vinyl LPs on to cassettes was the “threat” to the music industry. Surprise, surprise, people doing taping – like me – were among the highest spenders on LPs – like me. Plus ca change. “Shifting units” is all the industry was interested in then – and now. And their attitude is “f**k the customer”.

• [RabidViking]

  I no longer buy records that suck. And I check out more bands. That’s what piracy does for me.