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Online Piracy helps the Music Industry – it´s official!

EU Commission: Online Piracy Does Not Negatively Affect Digital Music Sales, May Actually Help Music Industry

Quote Ibitimes:ec-results

Piracy has been blamed for the loss of revenue by the music and movie industry. While the music industry has lost plenty of revenue from physical sales, including from CDs, it has seen an increase in digital sales. The European Commission’s Joint Research Centre’s study examined the effects of online piracy and digital music sales and found that piracy does not affect digital sale.

[quote style=”1″]Taken at face value, our findings indicate that digital music piracy does not displace legal music purchases in digital format.[/quote]

The researchers observed the online habits of 16,000 Europeans as they went on to various illegal or legal music downloading sites. Using Nielsen Clickstream Data, the researchers were able to monitor Internet users from five countries, including Spain, the United Kingdom, Italy, France and Germany, and their consumption of music.

The country-by-country breakdown reveals that Internet users from Spain visit the most illegal downloading sites while Italian users were the least likely to visit a legal downloading music site.


The study did not find that online piracy led to increased legal sales as the researchers explain, “individuals who like music like to consume more of it through the various channels available. This would give rise to a positive relationship between downloading (respectively streaming) and digital music purchases, regardless of whether a complementary relationship exists.” The researchers did find that online piracy did not negatively affect music sales but there are some positive effects of illegal downloading.

Torrentfreak also analyzed the study and writes:

It seems that the majority of the music that is consumed illegally by the individuals in our sample would not have been purchased if illegal downloading websites were not available to them,” they write.

In addition, the researchers are also the first to find that free and legal streaming websites don’t cannibalize legal music purchases.

“The complementary effect of online streaming is found to be somewhat larger, suggesting a stimulating effect of this activity on the sales of digital music,” they comment.

Most of the effects were found by comparing people’s visits to “pirate” websites and legal music stores. After controlling for interest in music, the researchers found that visits to pirate websites are positively linked to visits to legal music stores.

“If this estimate is given a causal interpretation, it means that clicks on legal purchase websites would have been 2 percent lower in the absence of illegal downloading websites,” the researchers write.

The effect of legal streaming services on visits to music stores is even greater, and estimated at 7 percent. So more free streaming is linked to more visits to music stores. The report notes that their data doesn’t cover visits to bricks and mortar stores.

The researchers admit that there could be external factors influencing these effects, but conclude that the results provide no evidence that piracy is hurting digital music sales in Europe. On the contrary, the data suggests a positive relation between piracy and music sales.

“Taken at face value, our findings indicate that digital music piracy does not displace legal music purchases in digital format. This means that although there is trespassing of private property rights, there is unlikely to be much harm done on digital music revenues,” they write.

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