Is file sharing theft?

[eclassical]

Compelling answer, Rikard. And a refreshing one, too, given that you represent a commercial entity. So my next question must be: What would you do if record labels and law makers the world over introduced a system whereby all downloads had to contain a way of identifying which online store sold them, and which system was then used to prosecute or penalise online etailers for any files shared illegally once it was established that these originated from their stores? Sounds far-fetched, doesn't it? But let's face it, the record companies are only tolerating the current DRM-free situation until they can think of a better way to recoup what they see as 'losses' because of illegally shared files. If they can't hit individuals, they'll sooner or later hit companies.

I don't see that coming at all. Purely hypothetically speaking, I would then quit my job and resort to being a pirate somewhere in the Caribbean, preferably Tortuga and start selling coconuts. I wouldn't want to be part of such a society or business.

I don't even like the idea of watermarking MP3s (or any other files) with something to identify who bought the file. How legally secure is that? Imagine your kids' friends copying your legally purchased water marked files and bringing them home to file share. Then, he, or someone down the line, gets caught and they identify the files as originating from you and you get sued for making those files available in the first place. In a way that's even worse than DRM IMHO.

Yarrr!

Rikard

[BorisG]

Complicated subject because there are so many greedy pigs on both sides of the fence.

[Robert Dahm]

And what if the artist wants you to download their music without the blessings of their label?  That is the case with Nine Inch Nails.  If you download their music from their own torrent for free, are you still doing the wrong thing?

Yes, you are doing the wrong thing. If the artist wants their music to be available for free, then they shouldn't have signed their music over to a record label in the first place. On the other hand, from a moral stand-point I see this as being far less problematic.

Olberholzer-Gee, Journal of Political Economy (Febuary, 2007)
Quote
Using detailed records of transfers of digital music files, we find that file sharing has had no statistically significant effect on purchases of the average album in our sample. Even our most negative point estimate (Table 7, model VI), implies that a one standard deviation increase in file-sharing reduces an album's weekly sales by a mere 368 copies, an effect that is too small to be statistically distinguishable from zero. Because our sample was constructed to be representative of the population of commercially relevant albums, we can use our estimates to test hypotheses about the impact of P2P on the entire industry.

This could be wrong, of course, I'm just showing that this is not my personal views.

This is very important research, I think. Of particular interest is the phrase 'commercially relevant albums'. The area of the market that I am most interested would struggle to be defined as 'commercially relevant'. The 'commercially irrelevant' or 'commercially suspect' has always been the area that has suffered as a result of record lable uncertainty. Fortunately, the gap is being filled by smaller record labels. Unfortunately, though, the artists don't make much of these recordings...

I'd also be interested to know about what was defined as an 'album download'. The majority of people I know who download a lot of music are only interested in popular music, and do so by song, rather than by entire album most of the time. I think perhaps an interesting addition to these figures  would be to examine the loss (if any) made by a single song (whose value would be determined as a percentage of the total album value on which it appears) with or without downloads.

[eclassical]

This is very important research, I think. Of particular interest is the phrase 'commercially relevant albums'. The area of the market that I am most interested would struggle to be defined as 'commercially relevant'. The 'commercially irrelevant' or 'commercially suspect' has always been the area that has suffered as a result of record lable uncertainty. Fortunately, the gap is being filled by smaller record labels. Unfortunately, though, the artists don't make much of these recordings...

I don't know what to think here. There probably are differences between the effects on lesser known artists and the big sellers. I have no theory (!) on what this difference would be. Reasoning: On the one hand, the really big artists seem to do just fine financially. And on the other hand smaller artists are in more need of the possible marketing effects from file sharing. Smaller artists are also able to start their own promoting by home recordings and putting their music on the net for legal downloading. There are also probably differences between popular music and classical music. But I've not thought about this so much. What do you think?

A small note on the Nine Inch Nails. They released an album recently under the creative commons license. I think it was this license:
http://creativecommons.org/licenses/by-nc-sa/3.0/us/

They made their album available for free download and charged a lot for a luxury DVD (which rapidly sold out by loyal fans). The reason they put the songs on the Pirate Bay torrent site, was that the downloads of their album were so immense that their site went down! Bittorrent is great for distributing the bandwidth.
http://en.wikipedia.org/wiki/Ghosts_I-IV

I'd also be interested to know about what was defined as an 'album download'. The majority of people I know who download a lot of music are only interested in popular music, and do so by song, rather than by entire album most of the time. I think perhaps an interesting addition to these figures  would be to examine the loss (if any) made by a single song (whose value would be determined as a percentage of the total album value on which it appears) with or without downloads.

This is from the report:

In order to compare sales and downloads, we match the 260,889 songs which U.S. users
successfully transferred during our study period to the 10,271 songs on the 680 albums in our
sample.    The matching procedure is hierarchical in that we first parse each transfer line,
identifying text strings that could be artist names. These text strings are then compared to the
artist names in our set of albums. The list of artists contains the name on the cover and up to two
other performing artists or producers that are associated with a particular song. For example, the
song "Dog" on the B2K album "Pandemonium" is performed by Jhene featuring the rapping of
Lil Fizz. For "Dog," B2K, Jhene and Lil Fizz are recognized as artists. Once an artist is
identified, the program then matches strings of text to the set of songs associated with that
particular artist. Using this algorithm, we match 47,709 downloads in the server log files to our
list of songs, a matching rate of about 18%.
There are two reasons why this rate is less than 100%. First, a download may be for a song that
is not in our sample. These transfers are not of any concern, they simply reflect the fact that we
are working with a sample. A second reason for a match rate of less than 100% could be that our
matching algorithm fails to recognize songs. To investigate this possibility, we hand-checked a
file with 2,000 randomly chosen unmatched transfers, comparing these downloads against our
sample. Only five of the unmatched songs were in our sample. As a result, we believe that the
18% match rate mostly reflects transfers of songs that are not in our sample.

I hope that answered your questions! You can read the report here otherwise:

http://www.utdallas.edu/~liebowit/intprop/OS%202006-12-12.pdf

Cheers
Rikard

[eclassical]

Hello!

Here's another report on the effects of "piracy":

Unauthorised copying of software, music or films, so-called digital piracy, may have benefits for the affected companies, an Oxford researcher has claimed.

http://www.ox.ac.uk/media/news_stories/2008/080317.html [University of Oxford]

In particular:

Ms Croxson points out that piracy poses a threat to sales only when those who otherwise would buy become tempted instead to copy. In any market there are some who value the product but never would buy. Their piracy cannot harm the seller. Quite the opposite: because, like any consumer, a pirate will talk to others about product experiences, copying which does not displace sales can actually help business. Consumer `buzz' is hugely important for sales success, studies have shown, and piracy drives up buzz without the need for extra marketing.

Hmm, where have we heard that kind of reasoning? Not from stealing pirates who are just trying to justify their theft, I hope? 

Rikard