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Saturday, December 07, 2013
DRM Keeps Music Sales Down: study

Digital rights management (DRM) doesn't help the business of music, a PhD candidate at the University of Toronto found in a study.

Laurina Zhang uses data primarily from Nielsen SoundScan and analyzed 5,964 albums from 634 artists. Zhang's finding was that the elimination of DRM from digital music files increased sales by an average of 10%.

However, popular albums benefitted from a lack of DRM far less than less popular albums. The study found that the removal of DRM from popular records had an insignificant impact on sales, while records that sold less than 25,000 copies saw a 30% increase in sales and records that sold less than 100,000 a 24% increase.

Relaxing sharing restrictions does not impact all albums equally, according to the study. It increases the sales of lower-selling albums (i.e., the \long tail") significantly (30%) but does not benefit top-selling albums. My results are consistent with theory that shows lowering search costs can facilitate the discovery of niche products," thestudy found.

The study used as its statistical keystone the gap between EMI's removal of DRM in 2007, and the other three major labels' removal in 2009.

Certain genres may have benefitted from a lack of DRM -- or not -- based on that genre's typical demographics and their familiarity and/or comfort with illegal file sharing. Basically this means that the older the demographic, the more likely it is that the removal of DRM would help album sales in that genre due to a perceived discomfort with file sharing by those fans.

Major labels have removed DRM from their digital music files in 2009. After all, DRM was an experiment which failed to accomplish its goal of reducing music piracy.

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