Quick Notes-Industry news: New Study Says Stop Blaming P2P
A new study (read here) in the Journal of Political Economy by Felix Oberholzer-Gee and Koleman Strumpf which took a careful look at P2P and sales data for the dawn of the P2P era in 2002 concludes that P2P played only a minor role in the demise of CD sales.
"Using detailed records of transfers of digital music files, we find that file sharing has had no statistically significant effect on purchases of the average album in our sample," the study reports. "Even our most negative point estimate implies that a one-standard-deviation increase in file sharing reduces an album's weekly sales by a mere 368 copies, an effect that is too small to be statistically distinguishable from zero."
803 million CDs were sold in 2002 representing a decrease of about 80 million from the previous year. The RIAA balmed the majority of the drop on piracy and has maintained that same argument during every year that followed as music sales plummeted. Yet according to the study, file sharing could not have accounted for more than 6 million albums total in 2002 which leaves 74 million unsold CDs left sitting on shelves.
What then is to blame? Because the recording industry focused on units shipped rather than sold, the decline could be attributed in part to reduced inventory. Best Buy and others no longer tolerated unsold stock sitting around and new automated inventory control systems enabled fast re-stocking So big retailers simply ordered fewer CDs. The study also highlighted the explosion in DVD sales during that same 2002 competing for consumer dollars and the video game explosion came shortly thereafter.
Read two other industry news:
EMI mulls unprotected Web song sales: sources read here
New genre of video games target mental health read here
"Using detailed records of transfers of digital music files, we find that file sharing has had no statistically significant effect on purchases of the average album in our sample," the study reports. "Even our most negative point estimate implies that a one-standard-deviation increase in file sharing reduces an album's weekly sales by a mere 368 copies, an effect that is too small to be statistically distinguishable from zero."
803 million CDs were sold in 2002 representing a decrease of about 80 million from the previous year. The RIAA balmed the majority of the drop on piracy and has maintained that same argument during every year that followed as music sales plummeted. Yet according to the study, file sharing could not have accounted for more than 6 million albums total in 2002 which leaves 74 million unsold CDs left sitting on shelves.
What then is to blame? Because the recording industry focused on units shipped rather than sold, the decline could be attributed in part to reduced inventory. Best Buy and others no longer tolerated unsold stock sitting around and new automated inventory control systems enabled fast re-stocking So big retailers simply ordered fewer CDs. The study also highlighted the explosion in DVD sales during that same 2002 competing for consumer dollars and the video game explosion came shortly thereafter.
Read two other industry news:
EMI mulls unprotected Web song sales: sources read here
New genre of video games target mental health read here
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