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New Study: Piracy Boosts Digital Music Sales

Posted by: , 14:12 AEDT, Sun January 24, 2016

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Music piracy's effect on sales differ depending on media, quality of music, and popularity of the artist, according to new paper
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A new paper published by the Economics department of Canada's Queen's University has found that music piracy may actually help boost digital music sales, although it may have a modest negative affect on physical media sales.

The paper written by Jonathan Lee, a searcher at Queen's, is titled Purchase, Pirate, Publicize: The Effect of File Sharing and uses data from 4.8 million illegal download, from 250,000 albums on a popular private BitTorrent tracker.

Looking at top-tier artists, Lee found that far from hurting digital sales, piracy actually boosts it, suggesting that the "the word-of-mouth effect is most relevant for the digital market". Physical sales did seem to be negative affected by piracy, applying a "statistically significant but economically modest negative" pressure on these sales.

But more importantly, Lee's research seems to suggest that the effect of piracy not only varies significantly depending on the type of media (digital of physical), but also the popularity of the artists, with the mega stars being better off than the lesser known.

"Top-tier artists lose sales, but the loss is partially offset by an increase in digital sales and the overall effect is small," Lee writes in the paper.

"Mid-tier artists are helped slightly and bottom-tier artists are significantly hurt by file sharing, which could indicate that file sharing helps lesser-known artists only if they are actually talented," says Lee.

This seem to indicate that users are using piracy as a discovery tool, and money is only going towards artists whose work is actually worth paying for, in the minds of these pirates.


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