While Breakdown's official policy is to not condone unauthorized file-trading of copyrighted music, we have long suspected that the efforts by the RIAA and the major record labels to supress file sharing are actually counter productive. In an article entitled A Heretical View of File Sharing in today's New York Times, John Schwartz discusses a study that helps prove this point. According to Schwartz, a team of American research economists recently published a paper that discredits the industries assertion that file-trading has a negative effect on record sales. Their analysis is more than anecdotal -- they examined four months worth of data to correlate trends between internet downloads and album revenue. Their conclusion? No matter how frequently a song is traded, there is a negligiable impact to the label. In fact, the study showed that, in certain cases, sales increased along with file-trading. Of course, correlation does not equal causality, and one can not jump to premature conjectures. Granted, it is not unlikely that the number one cause of decreased record sales is actually the stagnant economy (as discrectionary goods are obviously impacted when budgets are tight). That said, CD sales will obviously decrease over time, as more and more individuals elect to purchase music over the internet instead of traditional formats. The obvious question is whether consumers will be buying new music from the labels or retailers directly, or opting to take advantage of a more practical medium before the labels figure out what is going on.
[Ed. Chris points out that the original PDF from the paper's authors is available here, and that additional coverage can be found here and here.]