Zeropaid's Drew Wilson has wrapped up his series examining 20 studies that looked at the impact of filesharing on the sales of entertainment products (previously). He's summed up his conclusions based on the project, comparing the entire corpus to the notorious "Phoenix study" that was used as "evidence" for SOPA:
Claim: One of the claims the Phoenix study that we picked up was that finding a legal framework to stop infringement online has proven to sell politically.
Fact: After our extensive review, we found that, even though there is fierce opposition towards laws such as SOPA and any form of graduated response, the problem isn’t actually political. The problem is that there is no scientific basis for laws such as a “graduated response” or censorship of the Internet. After we examined the studies, there was a general theme that the best approach to dealing with file-sharing was not legal enforcement, but rather, a change in a business model that’s adapted to today’s digital reality. If you wanted to find debate where there was no real consensus, then it’s exactly how the industry is suppose to adapt their business model to the digital environment. While many pointed to price point, some suggested trying to find other ways of selling music like what iTunes has done. In fact, one study suggested that enforcement does not bring back customers by itself, but rather, building a model that is actually palatable so the customers return to you more voluntarily. Even the most pro-enforcement study we came up with said that if you’re going to actually do something like litigation, build a better business model as well, but simply resorting to legal tactics against file-sharers is not necessarily a good idea.
Claim: Another claim the Phoenix study made was that (in the process of disagreeing that there is a difference between a physical stolen piece of property and an unauthorized download) there is no incentive for producers and artists to make music. In addition, because of the activities of file-sharing, there will be less creative works made available.
Fact: Let’s cut to the chase. Part 8 of our series explicitly debunked the claim that file-sharing causes the decrease in quantity of music. The authors of that study explicitly state that they found no evidence of any kind that linked any decline in the quantity of music and file-sharing. If there was any decline that happened during the existence of file-sharing, the decline was merely a continuing trend since before Napster. In addition, numerous studies point to the trend of an increase in profits for artists both before this series and during this series thanks to the sampling effect. In fact, the only evidence that file-sharing is even hurting artists at all points out that it’s only the super rich and super famous top acts in the entire industry that may suffer any sort of loss at all (as seen in part 19 of our series). Again, as far as our series and the previous studies are concerned, not true at all.
Claim: File-sharing displaces legitimate sales. The evidence points to that.
Fact: This is a classic case of error by omission. What we found in our investigation was that there are numerous reasons why music sales were in decline in the early 2000′s other than the existence of file-sharing. Explanations included an increase in other entertainment sectors, the unbundling of the music album and returning to the singles model (re: the comments of deadweight losses) and an increasing pressure of the consumers bottom line in the face of todays economic realities. So, judging by the evidence we’ve collected, the evidence does not point in the direction that file-sharing, in and of itself, displace sales, but rather, other factors would also play a role in displacement of sales.
Claim: Since people can enjoy music that they downloaded, they are taking away from society and therefore placing a tax on society which means file-sharing must be stopped.
Fact: This model, when compared to all of the models we’ve seen, is completely out to lunch. There’s been plenty of calculations and economic models and non of them say anything like this. The closest we can recall in our series was Part 5 in our series which used the flawed theory of 1 download means one lost sale. While the models suggest that consumers do get something out of downloaded material, the losses still only account for less than $2 per album.
There's lots more, and it's all worth reading. A great companion piece to TechDirt's The Sky is Rising.Next post