http://arstechnica.com/web/news/2009/01 ... sitive.arsThe Dutch Ministry of Economic Affairs commissioned a study by research company TNO about how much Dutch Internet users download music, movies, and games, and what the social and economic effects of this downloading are. This resulted in a nearly 150-page report (Dutch) with many tables of percentages in it. The report differentiates between paid and unpaid downloads and talks about file sharing, eschewing the word "illegal." In the Netherlands, only uploading copyrighted music and movies is against the law. "Unpaid downloads" include officially licensed promotional content.
"Of the Dutch Internet population, 2.3 percent paid for music, movie, or game downloads in the past 12 months," according to the report. But then a table on the next page shows that 6.5 percent of the users have made purchases from iTunes and 2.9 percent have bought digital music from Amazon.com. So apparently many of them tried going legal, but didn't make a habit of it. (Amazon only sells MP3 downloads in the United States.)
According to the report, an estimated 1.5 billion to 2 billion songs are downloaded unpaid each year, which would be 7.5 songs for every song sold (as a download or on CD). This is much more than what people actually listen to. Thirty-five percent of the Dutch population has downloaded music without paying for it, according to the study. Curiously, freeloaders consume paid content in the same amounts as nondownloaders—for games, freeloaders even buy more than non-downloaders.
The report recognizes that for music, there is an important "sampling" effect where unpaid downloads are used to sample music, some of which is subsequently bought. However, this doesn't work as well for movies, because those tend to be viewed just once, so even if the unpaid downloader liked the movie, he'll be unlikely to buy it because he won't want to see it again. On the other hand, the rates for buying content that was previously downloaded without authorization are rather low: the majority only do this a few times a year, in equal amounts for music, movies, and games.
Things get really interesting on page 116 as the report starts to dissect the societal effects of file sharing. The study concludes that the effects are strongly positive because consumers get to enjoy desirable content and also get to keep their cash to buy other things. Because the consumers save much more money than the producers lose, the net economic effects are positive. The report also reinforces the truth that unpaid downloads do not translate into lost sales in anything close to a one-to-one ratio.
The report makes a number of recommendations that file sharers will be able to live with, such as supporting the development of new economic models for rights holders, not criminalizing file sharing for personal use, and so on.
Big Content is likely to quibble with some of the report's conclusions, especially the ones about the economic effects. The music industry especially has laid the blame for the years-long decline in revenues at the feet of piracy, even though its own slowness to adapt to changing customer expectations and adopt new business in response is a major factor.
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