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A  Jupiter Media Metrix survey in US done in June 2001 consisting of  1,911 online music fans has reported that the file sharing technology which enabled persons to exchange music files free has in fact boosted the demand for CDs.

Out of the target group surveyed,  305 were experienced in online music sharing. The survey reveals that the service actually increased the music hearing habit amongst the users and were spending more than average money on buying of music cassettes.

Thirty four per cent of all peer-to-peer users said that they spent more money on music than before they used such services, the report said, while 15 per cent said that they spent less. One-half said that the amount of money they spent remained the same.

Online music fans who did not use file-sharing services were less likely to report increased spending. Nineteen per cent said that they spent more money on music, while 10 per cent said they spent less and 71 per cent said they spent the same amount.

The findings of the survey is in sharp contrast with the claim of the music companies that their sales have come down by 5 % last year due to the file sharing technology, and their aggressive campaign against Napster which effectively closed a popular service used by more than 20 million subscribers and brought down a part of the internet economy with it.

Many of the CD distributors tried to introduce their own file sharing service for a fee without much success and some have adopted Copy protected CD technology which cannot be played on the Computer and some other digital devices bringing down the value of such devices.

Now the  survey suggests that the music industry was wrong in attributing the fall inthe sales of music CD s to file sharing technology. The fall of 5%  could have also been the result of economic changes not directly attributable to the Napster like technologies. Additionally, the aggressive pursuance of the music industry against Napster has caused its own damage to  the Internet economy as some simple calculations reveal.

If the 20 million subscribers of Napster had on an average been connected to internet one hour per week, 20 million internet hours would have been used by them through their respective ISP s. This itself is worth over Rs 50 crores in Indian rupee value. Along with it, 20 million surfing hours of ad inventory has been lost. This could have provided roughly a revenue earning of Rs 120 crores by way of online ads. Besides many more high speed multi media computers would have got sold. Perhaps the online buying would also have grown.

 If we also factor in the possible growth of music sharing customers and emergence of alternate service providers, the loss to the Internet economy because of the music industry ban on Napster could be even higher.

Perhaps, if file sharing technology had grown un hindered, the dot-com bust would have been averted.

Naavi

 May 8, 2002

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File-sharing boosts online music sales-Times of India
 

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