Friday, April 27, 2007

Harvard and Kansas Study Confirms File-Sharing Is Not Responsible For Drops In CD Sales

This article discusses the results of a recent HBS and KU Business School study that finds that file-sharing is not responsible for the 2000-2005 25% drop in music CD shipments. Using album sales and downloads data for portions of 2002, the researchers used statistical analysis to identify that the consequences of downloads could not have had more than a 0.7% impact on the overall sales drop. These are some of the drivers they posit are responsible for the sales decrease:

1. Wal-Mart and other big box retailers are selling more music CDs than ever and their increasing inventory control efficiencies are translating into lower overall inventory levels and lower opportunities for spoilage.

2. Video games, DVDs and you guessed it - teen cell phone use.

So maybe the RIAA should try suing SAP, Oracle, Microsoft (XBOX) and Nokia??

All kidding aside, I hope that this study helps reduce the litigation frenzy and fear surrounding file-sharing technology. I would welcome more efforts into developing new business models that utilize the core concepts of file-sharing to create innovation in open, distributed and organic frameworks...

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