Piracy doesn't hurt CD sales?

This was originally posted as a comment.

"Why? I believe it's because every study that has been done since Napster has shown that music sharing has no negative effects on music sales (CD or downloaded)."

-- Alan Wexelblat over at Copyfight in a comment [worth reading] on the revenge of Sapir-Whorf.

Except for the studies which show otherwise... like... e.g.

Peitz, Martin and Waelbroeck, Patrick, "The Effect of Internet Piracy on CD Sales: Cross-Section Evidence" (January 2004). CESifo Working Paper Series No. 1122.
http://ssrn.com/abstract=511763

There are others, but this is a convincing, decently researced and balanced paper...

... and even if you don't agree with the paper, it shows that there are non-RIAA funded studies which show that piracy hurts CD sales.

I'm all for the copyfight, but I think its dangerous to deny that copyright infringement isn't hurting CD sales. Other studies* show that the most significant factor** in the reason behind people pirating via P2P is because the music is free. What, you think is it cost money to use Kazaa or BitTorrent it would still be popular? Very hard to compete with free. Of course, people tend to cite other reasons for their behaviour, but thats the whole banality-of-evil thang: people are very good at finding justifications for their behaviour.


* Such as Gopal, Ram D., Sanders, G. Lawrence, Bhattacharjee, Sudip, Agrawal, Manish K and Wagner, Suzanne C, "A Behavioral Model of Digital Music Piracy" . Journal of Organizational Computing and Electronic Commerce, Forthcoming http://ssrn.com/abstract=527344
** Such as convenience, 'clubs', ethical attitudes vis a vis the RIAA.

--

The real problem is that the issue isn't clear-cut but, like in most wars, both sides tend to pretend is. I mean, these days most peope I know just pirate TV shows. Why? Cause they're not being broadcast here (e.g. Wonderfalls; Deadwood***), or we're a year behind (Enterprise; Spooks; Arrested Development), or they get screwed around by the network channels (Arrested Development; Sopranos). If they like the show, they'll buy it on DVD (Firefly; Arrested Development; the Sopranos;

***Well, its on PayTV, but whatever...

---

UPDATE: This is my follow up comment to Dr Wex's reply:

Thanks for all the feedback guys. I should point out that while its 'hard to compete with free', it isn't impossible. A lot of my research (of other people's research really) has been on the economics of piracy. e.g. exploring the basic idea that people purchase legitimate goods when the cost* of doing so is less than the cost of piracy. The new economic models of the future content-industry must understand these costs and realise that things like DRM can actually make pirated goods more attractive.

(What, so if buy software X I have to worry about a frigging dongle, but if I pirate it, I just use the crack and don't have to care about losing the dongle??)

It as, as Dr Wex points out, Apple that has really understood this and pushed the whole 'we need to compete with the pirates' mentality.

OTH:

"That the Cartel haven't managed to emulate the bottled water people yet is only a testament to their unfitness to survive in a free market."

Well, there are plenty of things which are unfit to survive in a free market, but which we, nonetheless, decide to protect legally and economically. (This is more true in Austraila, where I'm based, but even things like education in the US).

In fact, the whole basis - as you sure know - for copyright is that 'expressive goods' ARE unfit to exist in a free market. I still believe in that idea - probably because I work in a content industry** - but feel that copyright protectionism has gone too far.


* In a broad sense, which includes (as Dr Wex also points out) convenience, privacy, bandwidth, legal penalities etc. etc.


** As Warren Ellis said, its usually the people who don't try to make a living from art that think that art should be free.