Music piracy surprisingly good for business, study claims

Downloading music illegally does not harm the music industry – in some cases it even helps it – according to a new study by the European Commission’s Joint Research Centre.

The results have been published in a paper entitled ‘Digital Music Consumption on the Internet: Evidence from Clickstream Data’, which can be found online. The study took a sample of some 16,000 Europeans and had as its main objective to find a link between music piracy and subsequent visits to legal digital music stores. It concludes that piracy can actually provide a boost to music revenues online, irrespective of the genre, and that it should not be viewed as a pressing issue by the industry at all.

“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”, according researchers at The Institute for Prospective Technological Studies, which is part of the EC Joint Research Centre.

There has been a widely held belief that free and legal streaming websites were another part of the problem, but they were also in the scope of the study and likewise were found not to have a detrimental effect on online music purchasing habits. “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”, researchers concluded.

Those involved conducted the stuffy by first determining a person’s interest in music. It was then a case of finding a spike in online purchases and whether it followed a visit to a pirate website. The results showed a positive link. The scientists claim that “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.”

Compared to those 2 per cent, a much larger 7 per cent increase was found when correlating visits to legal streaming services with subsequent visits to music purchasing websites and stores. Although, admittedly, there can be a multitude of other factors affecting consumer behavior, the researchers emphasize the fact that at least no negative effects were witnessed on music revenues in the course of the study. In fact, in Europe the relationship between piracy and music sales has only been a positive one.

Hammering the point home, the researchers concluded that “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”.

Although the researchers stated that they don’t wish to involve themselves in a policy discussion, at least now, the growing number of people opposed to increased government surveillance will have some argument to fall back on, while, predictably, the anti-piracy lobby is likely to feel threatened.

And this is already evident in the backlash from the international music industry body, the IFPI, who are quite critical of the study. A statement of theirs points to the fact that the body conducting the research was heavily relying on "conclusions based on approximations and estimates of music activity" and that transactions aren't studied in detail, providing a very limited scope of consumer behavior.