Study says file sharing helps established artists sell more albums

From Billboard:

File sharing albums before their release dates reinforces popularity and helps sales, according to a study of BitTorrent traffic by Robert G. Hammond, an assistant professor at North Carolina State University. It’s a conclusion that clashes with the music industry’s position on file sharing, but there could be some potential.

The study’s main finding is an album made available in file-sharing networks a month earlier would sell an additional 60 units. “This increase is sales is small relative to other factors that have been found to affect album sales,” Hammond writes.

But not all artists get the same benefit. The positive affect on sales impacts only established, popular artists, not new and relatively unpopular artists. The affect is double for artists who have had an album sell at least 100,000 units and double for artists who have released more than three albums than for newer artists. Hammond keeps these small gains in perspective by acknowledging the far larger effects of promotional efforts such as radio and the benefit of a win or appearance on the annual Grammy Awards.

“File-sharing proponents commonly argue that file sharing democratizes music consumption by ‘leveling the playing field’ for new/small artists relative to established/popular artists, by allowing artists to have their work heard by a wider audience, lessening the advantage held by established/popular artists in terms of promotional and other support,” writes Hammond. “My results suggest that the opposite is happening, which is consistent with evidence on file-sharing behavior.”

Hammond File Sharing Leak

The study looked only at pre-release albums, not albums after their street dates or individual tracks. Hammond’s data source was “the largest network within the BitTorrent protocol” and the largest private (invitation-only) tracker specializing in sound recordings (over 565,000 albums from about 441,000 artists). The study followed 1,095 albums by 1,075 artists from May 2010 to January 2011. The four major label groups released about 37% of the albums in the study. Independent albums distributed by the majors accounted for 22.4% of the albums.

One area of concern with the study is the geographic representation of purchases. The study compares Nielsen SoundScan data to the file-sharing activity of 148,465 people from various countries – including about 80,000 Americans and 11,000 Canadians. However, sales data by Nielsen SoundScan cover only purchases made within the United States (and some of its territories) and Canada. In other words, the purchasing activity of tens of thousands of file sharers does not appear to be represented. Hammond’s conclusions might not have changed if only U.S.-based file sharing was tracked, but it’s surprising the paper does not even mention this obvious data mismatch or explain if and how it was overcome.

The study’s findings may make the music industry at large uncomfortable — the official line is still that file sharing hurts sales — and is sure to contribute to the ongoing discussion about the music industry’s efforts to stamp out illegal sharing. News of the study spurred the blog TorrentFreak to declare “BitTorrent piracy can act as promotion.” If only it were that easy.

Continue reading the rest of the story on Billboard