Study: File sharing benefits society

  • 23/06/2010

By Dan Satherley

Two US academics have argued that although file-sharing has had a financial impact on the entertainment industry, it has provided an overall benefit to society.

Felix Oberholzer-Gee, Harvard, and Koleman Strumpf, the University of Kansas, presented their paper File Sharing and Copyright at a music industry conference in Vienna last week. In it, the pair argue that file sharing has weakened copyright holders' economic grasp on their material, but that the primary function of copyright – to provide an incentive for people to create – has not been diminished.

In fact, more creative works than ever are being produced.

“Data on the supply of new works are consistent with our argument that file sharing did not discourage authors and publishers,” the authors wrote. "Since the advent of file sharing, the production of music, books, and movies has increased sharply.

"The publication of new books rose by 66 percent over the 2002-2007 period. Since 2000, the annual release of new music albums has more than doubled, and worldwide feature film production is up by more than 30 percent since 2003.

"In our reading of the evidence there is little to suggest that the new technology has discouraged artistic production. Weaker copyright protection, it seems, has benefited society.”

Oberholzer-Gee and Strumpf say there are more people than ever recording and releasing music, despite the impression there is no longer any money in it, because it's enjoyable in itself.

"Under this view, musicians take pleasure from creating and performing music, as well as aspects of the lifestyle such as flexible hours and the lack of an immediate boss.

"If this theory is correct, the economic impact of file sharing is not likely to have a major impact on music creation."

Also, because the vast majority of money goes to a tiny percentage of "superstars" – 1 percent of artists account for 82 percent of all new-release sales – file sharing would have a limited impact on creation, as most musicians don't make a living from it anyway.

In fact, digital tools have actually made it easier for musicians to find an audience without the help of major labels.

The author's analysis also suggests internet piracy is only to blame for one-fifth of the drop in recorded music sales since the turn of the millennium. Instead, the blame lies with the expansion of other entertainment industries – particularly videogames – and that music fans stopped re-buying old albums in the middle of the decade, having replaced their old vinyl/cassette tape albums.

In one study they cited, it was discovered in the average iPod collection of around 3500 songs, almost two-thirds had never been played, "making it unlikely that these consumers would have paid much for a good portion of the music they owned".

The authors acknowledge their study does not "consider the welfare of artists and entertainment companies".

"Our approach… reflects the original intent of copyright protection, which was conceived not as a welfare program for authors but to encourage the creation of new works," wrote Oberholzer-Gee and Strumpf, who say the music industry as a whole has actually gotten larger over the last decade, largely due to merchandising and concert revenue.

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