The More Music You Share, The More Music You Buy?

from the another-study dept

Thu, Jun 16th 2011 10:40am — Mike Masnick

We've seen a bunch of studies like this in the past as well, but here's yet another report claiming that the more people share music, the more music they buy. Now, there are some caveats here. The report is done by a company that's trying to build a business around "legal music sharing," so it's a biased party. Also, its methodology is not particularly clear. So, even though it supports what plenty of other (more complete and open) studies have said, I'd at least take this one with a grain of salt.

Of course, there are some conflating factors in all of this. It wouldn't surprise me at all if some of the biggest file sharers are also some of the biggest music buyers, since they're often the biggest music fans. However, it would be wrong to then assume that because such people buy "more," it means that they buy more than they would have otherwise. That point has not been shown by studies. It may be true for some and probably is not true for many. However, what it does clearly suggest is that these file sharers are happy to pay for things when it makes sense. Once again, this reinforces the key point we've made before, that this is a business model challenge. These are underserved customers who are willing to buy, if the offer is reasonable.

Once you realize that, you quickly recognize the sheer pointlessness of the RIAA's strategy over the past decade plus. Rather than treating these people as underserved customers, who could be better served with better offerings, they instead treat them like criminals. That pushes them away, rather than making the more likely to buy anything. It's really amazing that the RIAA and the big record labels still haven't figured this simple point out.

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Filed Under: buying, music, sharing

22 Comments

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drewmo (profile), 16 Jun 2011 @ 11:32am

The methodology is clear. Apple estimates that only 3% of the tracks "stored in the average iTunes user's digital library was purchased from the Apple music store."

WithMe takes this number, and notes "14% of the tracks in our users' libraries are digitally purchased". They note that since their users are sharers, they come to the conclusion "People Who Share Music Are 5x More Likely To Buy Digital Music". I suspect this hypothesis is true, but this "report" does absolutely nothing to show it.

Problems with their methodology:
1. iTunes reported the percentage of tracks in their library that were purchased in the *itunes store*, which WithMe then compares to a number of tracks simply *purchased digitally*. There are MANY ways to purchase music digitally outside of iTunes, so this comparison is meaningless.

2. Even worse, WithMe is making the claim that *iTunes users are not music sharers*. Why? Because they don't use WithMe. So they aren't sharing music.

Mike, I don't have to take a grain of salt with what they say, and neither do you! You can see clearly how they're backing up their claim, no salt necessary. This is nothing but an advertisement for their service.

You're doing a disservice to the real evidence of the benefits of sharing by including this PR piece in the ranks, even with your disclaimer.
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Bengie, 16 Jun 2011 @ 11:33am

In the Past
There have been numerous studies like this by universities back in the Napster days that showed the same thing.

On average, a "pirate" spends more money on movies/music than anyone else. The exception is commercial pirates and actually sell/give-away discs.
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Anonymous Coward, 16 Jun 2011 @ 11:36am

The theory I've held to for the last several years is that the recording industry wants to be in control of which music consumers are buying. They make their decisions which music they would most like to promote, which artists they want to see on top of the charts. And of course that included making sure that only artists signed with the big labels had any chance of succeeding in a big way. Any artist trying to go it independently wasn't likely to get far, not without that magical major recording contract. Before it was practical for CDs to be ripped and shared, you had to buy or borrow if you wanted to have the latest by your favorite artist. And AM/FM radio were the primary means by which people discovered music - for that you had maybe a dozen stations in any given market, some of them competing head-to-head for listeners with the same tastes.

Now thanks to ripping and sharing, if a group of friends like many of the same artists, they need buy only one copy of a CD. The rest can buy other CDs further down the list. Collectively they might buy just as many CDs, just each buying different ones instead of everyone having to buy their own copy of whichever ones they like best. And then you get Internet radio, with literally thousands of different formats covering niche genres, older time periods, and music taste algorithms. People discover new artists they enjoy. People looking for something to contribute to the filesharing pool will seek out obscure and backlist titles to add to it. There's lots of music out there in the long tail.

Which comes back to that theory I mentioned at the start. The record companies look at all this and say, 'That's the problem'. They want to go back to the way things were when everyone bought a lot of the same CDs, when few listeners were exposed to anything that didn't get played on broadcast radio. When too many consumers are spreading out their purchases across more different artists, when it's too easy for listeners to discover new music, to gain access to lesser known backlist and long tail artists, they see this as a problem, and would like to herd most of these music fans back to the chart-toppers they want to promote. That's why the recording industry hates filesharing. That's why they're trying to kill Internet radio with crippling royalty rates.

At least, that's my theory. I might be wrong, but I suspect it's at least partially true.
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Anonymous Coward, 16 Jun 2011 @ 11:45am

"some caveats"? There is very little credibility in this report at all. The same report with the opposite findings from the **AA types would have you going ballistic. Why be so nice on this one?
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drewmo (profile), 16 Jun 2011 @ 11:50am

Re:
That's the part that bugs me too. Mike is great at debunking reports and statistics, but it saddens me to see anything resembling willful blindness just because the spurious conclusion supports his views.

Mike, they're good views! I agree! But you can't emphasize the importance of scrutinizing evidence only some of the time.
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Huph, 16 Jun 2011 @ 11:58am

Re: Re:
It gets more fun when you read the cited bunch of studies and see that those "studies" (one is a *poll*) aren't much more credible.

But, this is a little beyond the pale. As was mentioned, it borders on being an advertisement.
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Anonymous Coward, 16 Jun 2011 @ 12:05pm

Re:
>>They want to go back to the way things were when everyone bought a lot of the same CDs, when few listeners were exposed to anything that didn't get played on broadcast radio.

Time travel, putting toothpaste back in the tube, and rocks spontaneously rolling uphill are all things that that executives in formerly successful industries fervently believe are possible.
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Anonymous Coward, 16 Jun 2011 @ 12:14pm

Correlation is not Causation (or is it now?)
Those who pirate the most buy the most because they are the biggest fans. That is why they spend so much time pirating.

You cannot say that the reason they buy is that they pirate, as the same demographic bought MORE pre-Internet piracy.

If you want to imply that correlation is in fact causation (ie. pirates buy the most so piracy is good for sales), you also have to accept other correlative-causative relationships. That would include the clear correlation that as piracy has steadily increased, sales have gone down.

You can't have it both ways.
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jupiterkansas (profile), 16 Jun 2011 @ 12:15pm

Re:
That's it in a nutshell!

They don't care how many people are buying music, as long as we're buying their music. They need for all musicians to have to go to them if they want to make a living wage in the music business, because they know if musicians can do it without them they will, and their jobs as middlemen will be done for.
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PRMan, 16 Jun 2011 @ 12:17pm

Re:
My situation is an excellent example of the misleading nature of this article.

I have about 4500 tracks in iTunes.

I bought about 100 from Apple. This translates to 2.2%.

I have bought about 500 DRM-free MP3s from Amazon. That's 11%, very close to 14%.

The rest (≈84%) are tracks that I have ripped from CD.

I don't share at all, but my numbers match the article pretty closely.
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PRMan, 16 Jun 2011 @ 12:18pm

Re: Re:
Actually, since 11 + 2.2 = 13.2, I'm VERY close to the article's numbers.
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A Monkey with Atitude, 16 Jun 2011 @ 12:40pm

Re: Correlation is not Causation (or is it now?)
Sorry, but the sales of Plastic discs have gone down... not the music industry (who's own numbers prove that time and time again, but hey why let a straw-man get in the way of facts)... I don't buy inflated pieces of plastic, sorry, no reason too, my Ipad carries a library, my phone carries more than i need too... so why lug a suitcase when i can pocket my phone...
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Chuck Norris' Enemy (deceased) (profile), 16 Jun 2011 @ 1:40pm

Re: Re:
But you also purchased the CDs, too?
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The eejit (profile), 16 Jun 2011 @ 1:56pm

Re:
So, it's like politics, only with musicians and livelihoods at stake.
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Gwiz (profile), 16 Jun 2011 @ 5:12pm

Re:
At least, that's my theory. I might be wrong, but I suspect it's at least partially true.

That is a very good theory. Taking it a little deeper, it really boils down to the internet being designed as a many-to-many communication platform, as opposed to the older one-to-many platforms, like tv, radio, newspapers magazines and even what music was physically available to purchase at the brick & mortar stores.

Many-to-many communication platforms are by their very nature hard to control and control is really what they like to get back.
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dale, 16 Jun 2011 @ 6:41pm

the reverse is also true
When I stopped sharing, I also stopped buying. Now the music industry is ignored when I consider where to spend entertainment dollars.
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AW, 16 Jun 2011 @ 8:14pm

Re: the reverse is also true
I used to buy far more albums and songs myself when I was sharing. Now I have such a bad taste in my mouth I rarely spend my money on entertainment. It's also that a lot of quality has gone downhill with the quantity, but mostly I just really dislike the whole process of buying something where I'm assumed to be a thief, then having to strip out the DRM to get it to play how it should in the first place...and don't get me started on non-skippable DVD trailers.
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AW, 16 Jun 2011 @ 8:23pm

Re: the reverse is also true
Thinking about this more, the difference is that I used to be excited about new music and finding new music and new artists to give money to. Now I feel that most artists are just in it for the money (I actually know this isn't true as I, someone who isn't big into music much anymore, have a surprising number of musician friends). It's hard to separate the anger I have for ruining something I enjoyed, with the shorter amount of time I have to enjoy it as I get older. If you create an association of feeling dirty with enjoying music enough to share it, it becomes a more private, less enjoyable and less frequent thing. When you're associating music and piracy in the same sentence so often, you form bad relationships between the words and your brain subconsciously filters that. There's actually a lot more to it than that but a fabulous book on the subject is called Blink by Malcolm Gladwell.
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CJ (profile), 17 Jun 2011 @ 12:16am

Re:
Now add to your mix places like ccmixter.org freemusicarchive.org audiofarm.org and freeplaymusic.com who offer free music to the public made by music artist under different creative commons licenses. But let�s not stop here another thing that has popped up, and is becoming even more popular, and is the "in" thing is software like audacity for Linux and Windows. WavePad for Mac. Plus the much other software that you can get free or pay for. Some you may pay dearly for, but many are free. You need worry about the RIAA. Start a trend, and make your own music. Or join one of the many websites that have popped up on the Internet. Or join a few. Then upload your new creations. Or sit back, relax, and enjoy what they have to offer the public. That's not enough for you? Well there are plenty places online for you to stream your own music like shoutcast, blogtv blogtalkradio ustream, etc. Oh and you can spend hours at these places listening too. Oh but you like the oldies? Well there is a place called musicstack.com that you can get used Vinyl Records, CDs and Music Albums. I am sure there are plenty more of them out there that do the same as them. The record companies must be really teed off at the consumers, and everyone mentioned above for thinking these alternatives up.

Places like these took a big chunk out of the record companies. I am sure a few of these were created simply because of out of frustration, and being sick of being treated worse than dirt by the record labels. As for youtube? I can pretty much see a trend come upon them too. Many new artists not wanting the record labels breathing down their necks will start to use youtube as a means to get their music out to the public. Just like the places mentioned above I bet we see many artist jump to youtube, and use a few of the other alternative resources to show off their talent. Then we really will see record company's take a plunge. I believe youtube is ready for them. So is the public. I know Google will be breathing a sigh of relief.
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Anonymous Coward, 17 Jun 2011 @ 7:50am

Yes, it's true that CD sales are down markedly from the late 1990s, and paid digital downloads haven't come close to picking up the shortfall. RIAA likes to blame filesharing but the real reasons are many and complex, and to a large extent the record companies have only themselves to blame.

I've been tempted to write to the RIAA and congratulate them on the success of their campaign to drive down music sales by pissing off the music-buying public.
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AJBarnes, 17 Jun 2011 @ 9:46am

What a crock
I'm always amazed when the industry says they've lost 'billions' in sales because someone steals their product.

Now, really... how much does the auto industry claim it has lost because people steal cars? Were car theifs truly potential customers who would have purchased that new BMW that they stole if they couldn't find one to steal?
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Ninja (profile), 12 Jul 2011 @ 10:45am

Re:
Mike clearly states that we should see the study with care. It's clearly biased even if it does point to the direction of more respected and open studies.

Actually it's good for the community to see that both sides, MAFIAA and sharing may have their 'bogus study day'. MAFIAA with more frequency than it should.

Even being a supporter of file sharing and engaging in the activity in a daily basis I can see this study can't be taken seriously as much as the gazillion lost sales studies released by MAFIAA affiliated companies can't be a source of how the entertainment industry is faring.
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