What was the reaction outside Ragdoll to your early ideas?
Anne Wood: 'The first presentations I ever made on the idea were greeted with a kind of stunned silence. Someone in the BBC asked, 'Are these real rabbits?' In the US they thought it looked like a post-nuclear landscape caught in sunshine!'.
The two distinguished gentlemen Strumpf and Oberholzer-Gee have most likely made RIAA executives choke on their lunches. Those two economists at Harvard and UNC-Chapel Hill have done the research and the math on how much CD sales are actually hurt by P2P sharing. The answer: A whopping one CD per 5,000 files downloaded. Needless to say, RIAA are already trying to discredit the study.
Songs that were heavily downloaded showed no measurable drop in sales, the researchers found after tracking sales of 680 albums over the course of 17 weeks in the second half of 2002. Matching that data with activity on the OpenNap file-sharing network, they concluded that file sharing actually increases CD sales for hot albums that sell more than 600,000 copies. For every 150 downloads of a song from those albums, sales increase by a copy, the researchers found.
"Consumption of music increases dramatically with the introduction of file sharing, but not everybody who likes to listen to music was a music customer before, so it's very important to separate the two," said Felix Oberholzer-Gee, an associate professor at Harvard Business School and one of the authors of the study.
Oberholzer-Gee and his colleague, University of North Carolina's Koleman Strumpf, also said that their "most pessimistic" statistical model showed that illegal file sharing would have accounted for only 2 million fewer compact discs sales in 2002, whereas CD sales declined by 139 million units between 2000 and 2002.
"From a statistical point of view, what this means is that there is no effect between downloading and sales," said Oberholzer-Gee.
For albums that fail to sell well, the Internet may contribute to declining sales. Oberholzer-Gee and Strumpf found that albums that sell to niche audiences suffer a "small negative effect" from Internet piracy.