It is often thought that illegal downloading has « killed » the music industry and, more broadly, the cultural content industries (Movies, video games, etc.).
It was what I thought until I discovered an extraordinary paper …
… Presenting an empirical study which found that illegal downloading had a slightly positive effect on sales of legal music and streaming. I was obviously taken aback by that, especially since it came from the “Joint Research Center”, an organ attached to the European Commission.
Since I couldn’t find a real synthesis on the subject, I thought I was going to do it. I dug and the more I went, the more I saw that the certainties sold by the institutions were nonsense.
Basically, the reasoning followed was that illegal downloading would decrease music sales because consumers would rather pirate (for free) than pay and that would be bad because it would decrease the incentives to produce music and therefore the production of music.
The empirical studies addressing the question were riddled with errors. Here are the main categories:
- Poor consideration of technological changes (I.A.1; I.A.3; II.B.1; II.C.1,2,3,4)
- The failure to observe the actions of the recording industry, whether in its management (IA2), its rejection of innovation (II.D.2 and 3) or its violence towards consumers ( II.D.4; II.E.3).
- Poor control of variables, such as income (II.A), interest in music (II.B) and the impact of competing products (II.C.2).
- Artists aren’t the majors, they don’t earn much from CD sales, and they’re not motivated by money alone. (III.A)
I concluded :
- whereas the correlation between the development of illegal downloading and the decline in music sales is questionable;
- that assuming it to exist, it would in no way provide information on the variation in the profits generated and would therefore in itself have no meaning;
- that assuming it is existing, and meaningful, the studies could in no way claim to have isolated the various variables biasing the observations;
- and, finally, that assuming all this established, the alleged impact on production would not be proven at all, or even refuted by empirical data.