Study: Piracy has positive effect on sales with respect to digital downloads for top tier artists

[ghettosynth]

A new study claims that while the overall effect of piracy is negative, that this effect is due to impact on physical sales. It further claims that there is a positive effect on digital sales, this is the so called advertising effect. The paper develops a nice model and then analyzes that model with a more comprehensive data set, with respect to specific features, than has been used in the past.

A brief summary of the paper from Electronic Beats

http://www.electronicbeats.net/feed/doe ... sic-sales/

A more complete summary of the paper from torrent freak.

https://torrentfreak.com/piracy-can-boo ... ws-160121/

A link to download the working paper to read it for yourself.

https://ideas.repec.org/p/qed/wpaper/1354.html


From the abstract, emphasis mine:

I find evidence that additional file sharing decreases physical sales but increases digital sales for top-tier artists, though the effects are modest. I also find that file sharing may help mid-tier artists and substantially harms bottom-tier artists, suggesting that file sharing enables consumers to better discern quality among lesser-known artists.

To me, this last statement is rather interesting. The author is suggesting that people use file sharing to try, but then decide not to buy for lower tier artists and further, that the reason is related to music quality.

It seems that piracy harms bottom tier artists more than it helps top tier artists. I suspect that this is, in part, owing to a perception of value. People don't want to have to pay for you if you are on the bottom.

FYI, YMMV.

[SampleScience]

From my research, piracy has pretty much destroyed the music industry. Not much remain except the few occasional internet sensation here and there. It force artists who want to make a living producing music to turn to more "commercial" avenues (music libraries, niche market genre, special limited editions, etc.). In fact, music licensing alone has grown and is a viable access to financial independence through music. I know a couple of obscure artists who make a great living off that. But I don't think they represent the majority + you have to produce specific "in demand" genres of music, which is not necessarily interesting for everything. Some people will prefer more experimental or "leftfield" genre of music not suitable for music licensing (or very hard to sell to music supervisors).

[Daags]

music industry

[chk071]

Studies are bad m'kay.

[sprnva]

While both sides in the piracy camp have endless studies to validate their stance, what is certain is that the landscape has changed. The industry is no longer the gatekeepers. While the internet and technology has made piracy easier and more widespread than ever, it's also made music production and distribution easier than ever. Personally, I'd call that a win for most of us.

I'd be interested to hear both sides take on streaming. From what I can gather unless you're Taylor Swift you can forget about making anything off that. Yet it's perfectly legal and the industry get their ample piece of the pie. From an artist's point of view it seems even worse than piracy to me because it doesn't come with the guilt factor of piracy yet the artists are making pennies from it.

[ghettosynth]

...

[jancivil]

I don't know why people buy music product. I don't consume music in a car or at a gym, or require music to accompany my forays out into the wild at all. I don't follow 'the music industry' or very commercial fare really. This track in another thread here, by Adele... if this type of user can have a small file mp3 on the mp3 doohickey and carry it to their picnic or whatever, downloaded from piracy, what are they paying for? I suppose there are people that understand it's theft and never do. I suppose there are people that haven't accessed any such thing as a pirated copy.

But as to an argument from value, the sound of that POS is not helped majorly by way of a larger file I think. It just seems so disposable. There are things I think sound pretty good that are as disposable. I don't really think a lot of this is a keeper, unless you're really vapid you'll grow out of Britney Spears. So I'm really reelin' in the years here I suppose. I don't understand.

I'm not a music consumer. I'm not a consumer much at all. I do expect that lowest common denominator fare will far outstrip substance (by definition) but I was actually taken aback by well over a billion views for "Hello". So,
there are scores of people that tried that "Adele" one out on Vevo/YT and went, 'oh yeah, I'll buy that for a dollar!'? Criminy.

I used to be a bit more of a hoarder, but I don't need 'my copy' so much anymore. So this takes me to a more abstract view, and more than ever I don't think that the music is really the idea here, as to perception of value.

[chaosWyrM]

From my research, piracy has pretty much destroyed the music industry.

i have to entirely disagree. the way i see it, there are 2 main factors in the "destruction" of the music industry:

1. its own complete lack of adaptability in regard to technology.

2. music as a form of entertainment has generally lost its value. with the emergence of so many other easily accessible forms of entertainment...music just isnt as popular as it used to be. it doesnt speak to groups of people on the scale it once did and it isnt a mortar that holds subcultures together anymore. people are not longer defined by the music they listen to. "hes a punk", "shes a raver", "hes a metal head"...these kinds of references are hardly ever used anymore, and certainly not to reference any newer genres or their listeners.

what are "edm kids"? there isnt even such a thing...edm isnt even a genre of music. i cant think of a single recent music genre where you can tell who listens to it by the clothes people wear. those days are gone...and with it went a substantial amount of power that music had as an art form.

of course a all of that is simply due to the fact that people have access to a great deal more than they used to. the thing that makes the "internet age" so fantastic...is also the thing that is homogenizing everything.

music is simply not as relevant as it used to be.

[jancivil]

suggesting that file sharing enables consumers to better discern quality among lesser-known artists.

To me, this last statement is rather interesting. The author is suggesting that people use file sharing to try, but then decide not to buy for lower tier artists and further, that the reason is related to music quality.

It seems that piracy harms bottom tier artists more than it helps top tier artists. I suspect that this is, in part, owing to a perception of value. People don't want to have to pay for you if you are on the bottom.

The last statement here seems perfectly clear. However, I don't think musical quality can objectively be all that much more of a factor for the bottom than it is on top. Unless people looking at the obscure or unknown artist are through that considered better suited to judge 'musical quality'. If that is a tempting notion, I think it is not what really results in sales anyway. I think that here, the buy tends to be subjective; that there is a particular regard for the person/the story and things that really click or don't as a whole, so even where the music is in itself highly regarded it's not (nearly) enough. So it's not so very different than the purchase of the known quantity. It may be true that the thing that happens with a less picky consumption of the already popular doesn't happen with lesser-knowns, which seems practically axiomatic.

[nineofkings]

The issue with the last part is the conflation of popularity with quality that economists and statisticians are so quick to make.

[imiumofficial]

Certainly piracy and digital evolution have had an influence on music, resulting in the decrease in sales, however this is changing the industry in other areas, commercialising artists and making bedroom producers internationally famous.. Time will tell if this revolutionary change is for better or for worse...

[Boardwalk]

“Believe only half of what you see and nothing that you hear.” ― Edgar Allan Poe

[herodotus]

The issue with the last part is the conflation of popularity with quality that economists and statisticians are so quick to make.

Yes, and I understand why this occurs with economists. I mean, they are looking for data, and sales figures are data. Download numbers are data. Judgments concerning quality, however well informed, are not really data.

What I don't get is why (especially when it comes to music) they feel called upon to make this leap from popularity to quality. So far as I know, this is rarely done with, say, food. No one concludes that McDonald's sells the most hamburgers because they make them better than everyone else. Still less does this happen with beer or whisky. Sam Adams has commercials that brag about the fact that they only have a 1% market share, while Arrogant Bastard says right on the bottle:

It is quite doubtful that you have the taste or sophistication to be able to appreciate an ale of this quality and depth. We would suggest that you stick to safer and more familiar territory—maybe something with a multimillion-dollar ad campaign...

My guess is that this happens because music is not really a consumer good like food or beer. It has only seemed that way for the past 100 years or so because of a wrinkle in the history of technology; and because of digital audio and the web, this wrinkle has been almost completely ironed out.

The music industry has had much in common with the fashion industry, in that it is driven by image and glamour and muted sexuality. Unfortunately for the music industry, it doesn't manufacture a universal human necessity like clothing.

[nineofkings]

Personally, I think the record industry in particular will need to change its business model. Due to piracy and saturation, individual recordings have less value as a product. This doesn't mean, however, that music itself has lost value. Clearly people still need and use music on a daily basis. It's just that they're less willing to value individual .mp3 files as the end product like they would a CD or (for some reason again) vinyl record. I don't think the loss of sales due to piracy means the end of the record industry, like the RIAA and others have cried in the past.

Instead, I think the industry as a whole needs to redefine what the value is in purchasing music. We have the Internet now. If the recording itself is not the thing people are paying for, what is? To my eyes and ears, it appears to be the brand of the artist. When presented with a Nickelback song that kinda sounds like a Pearl Jam song, most people would prefer the Pearl Jam song at least partly because of who is behind it. I'm thinking more artist-centric funding rather than individual recording purchases will become more prominent as time goes on. Things like Patreon or Kickstarter or Imogen Heap's developing Mycelia platform.

[herodotus]

Personally, I think the record industry in particular will need to change its business model. Due to piracy and saturation, individual recordings have less value as a product. This doesn't mean, however, that music itself has lost value. Clearly people still need and use music on a daily basis. It's just that they're less willing to value individual .mp3 files as the end product like they would a CD or (for some reason again) vinyl record. I don't think the loss of sales due to piracy means the end of the record industry, like the RIAA and others have cried in the past.

Perhaps not. But consider the fact that throughout the most successful years of the music industry, the products that they made their money off were objects that contained musical recordings.

They were the only people who could make these recordings, because recording gear was expensive and difficult to operate and maintain.

They were the only people who could make the objects (i.e. 78 rpm records, 33 1/3 rpm records, 8-track tapes, CDs, or whatever) because they required special equipment and manufacturing facilities.

They were the only people who could distribute the objects, because that entailed maintaining a network of wholesalers, retailers, and promoters.

This situation produced an oligopoly which was protected from extended competition, not just by laws and lobbyists, but by the immense barriers to entry created by the technologies of mass production.

Today, the laws and lobbyists are just about all they have left.

They don't just need a new business model. They need a new business.