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Wednesday, March 20, 2013
Web Piracy Does Not Affect Music Sales, Study Says

A report published by the European Commission Joint Research Centre claims that music web piracy does not harm legitimate sales.

The Institute for Prospective Technological Studies examined the online habits of 16,000 Europeans. They researchers estimated the effects of illegal downloading and legal streaming on the legal purchases of digital music. The results suggest that Internet users do not view illegal downloading as a substitute to legal digital music. Although positive and significant, the estimated elasticities are essentially zero: a 10% increase in clicks on illegal downloading websites leads to a 0.2% increase in clicks on legal purchases websites. Online music streaming services are found to have a somewhat larger (but still small) effect on the purchases of digital sound recordings, suggesting complementarities between these two modes of music consumption. According to the results, a 10% increase inclicks on legal streaming websites lead to up to a 0.7% increase in clicks on legal digital pur-chases websites.

The International Federation of the Phonographic Industry (IFPI) said the research was "flawed and misleading".

"The findings seem disconnected from commercial reality, are based on a limited view of the market and are contradicted by a large volume of alternative third part y research that confirms the negative impact of piracy on the legitimate music business," IFPI said in a statement.

"If a large proportion of illegal downloaders do not buy any music (and yet consume, in some cases, large amounts of it), it cannot be logical that illegal behaviour stimulates legal download sales and inflicts no harm."

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