Monday, July 24, 2006

Danish file-sharing

Lawrence Lessig reports on significant research from Denmark about file sharing. Unlike other research, this uses actual sales data (not estimates) from a monopoly publisher who controls 99% of the Danish market for music. The data shows that the big drop in sales since 2000 represents a "return to normality" -- music sales in Denmark had been steady for fifteen years, until an unusual and (as yet) unexplained doubling took place between 1993 and 2000. Between 2000 and 2004 (the latest figures available) sales returned to normal.

Interestingly, the lost sales almost entirely affect "big name" established artists. Exactly as you would expect, file sharing acts as free advertising for relatively minor artists, who gain more new sales from the exposure than they lose from illegal downloads, but the biggest of the big, who can't gain because their exposure is already saturated, see a small reduction in sales. The Danish experience has been that file sharing has led to more artists getting published, not fewer, with most artists making more money while the most successful make a little less.

If the Danish experience is typical of all music markets, then Metallica was probably right to fear Napster; but on the other hand, for every one Metallica who would lose sales there are probably thousands of bands and artists who gained sales. It isn't clear to me that copyright law should be based on the needs and wants of Metallica instead of a thousand other bands who, while smaller individually, collectively probably outsell Metallica a hundred times.

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