Online piracy ‘does not hurt the music industry’- EC study

25/03/2013

Illegal downloading has little impact on music sales and actually drives consumers to make legal purchases, according to a new study published by the European Commission’s Joint Research Centre.

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The research looked at the browsing habits of more than 16,000 Europeans, and found that there is actually a positive link between online piracy and visits to legal music stores.

“It seems that the majority of the music that is consumed illegally by the individuals in our sample would not have been purchased if illegal downloading websites were not available to them,” researchers said.

The study also found that music streaming websites such as Pandora (P) and Spotify do not cannibalize music purchases.

“The complementary effect of online streaming is found to be somewhat larger, suggesting a stimulating effect of this activity on the sales of digital music,” researchers noted, adding that the music industry should not see piracy as a growing concern.

The European Commission’s study contradicts an earlier report backed by the MPAA that claimed the closure of sites like Megauplaod resulted in increased movie sales.

“Taken at face value, our findings indicate that digital music piracy does not displace legal music purchases in digital format,” the paper concluded. “This means that although there is trespassing of private property rights, there is unlikely to be much harm done on digital music revenues.”

However the international music industry body the IFPI was highly critical of the research.

"The findings seem disconnected from commercial reality," it 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."

View the full EC report here

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