European Commission report says music piracy not a problem

downloadEverywhere you turn on the Internet, everyone is beating you over the head saying music piracy is bad. Well, listen up, record executives and artists: You don’t need to worry about digital music piracy at all. In fact, it might even be a good thing for music sales.

That’s the conclusion reached by the European Union’s Information Society Unit, and specifically the Unit’s Luis Aguiar and Bertin Martens, two authors of a new study into the effects of online piracy on the music industry to be published later this month. The research states that “although there is trespassing of private property rights (copyrights), there is unlikely to be much hard done on digital music revenues.” Aguiar and Martens continued, “digital music piracy should not be viewed as a growing concern for copyright holders in the digital era. In addition, our results indicate that new music consumption channels such as online streaming positively affect copyright owners.”

The study used data from 5,000 Internet users across the European Union (specifically, France, Germany, Italy, Spain, and the United Kingdom), looking at the online music habits (both legal and otherwise) by geography to gauge any existing patterns. As numbers would have it, Germany appeared to be the most law-abiding when it came to piracy, with the lowest amount of illegal downloads. Spain had the most, garnering 230 percent more clicks on illegal download sites than Germany. But the most surprising revelation may be that illegal downloads did not seem to replace legal purchases for most users in the grand scheme of things.

“After using several approaches to deal with the endogeneity of downloading and streaming, our results show no evidence of sales displacement,” Aguiar and Martens wrote. “Overall, our different estimates show relatively stable, positive, and low elasticities of legal purchases with respect to both illegal downloading and legal streaming… All of these results suggest that the vast majority of the music that is consumed illegally by the individuals in our sample whould not have been legally purchased if illegal downloading websites were not available to them.”

This discovery will doubtlessly be challenged in weeks, months, and years to come, and it’s unlikely that a European Commission-funded study of users across five European countries will be widely accepted by the American music industry. But nonetheless, there is something rather interesting suggested in this report: If music piracy is additive to the amount of music listened to by those indulging in the piracy, is it possible that piracy functions as much as a sampler for future legal purchases? It’s a mind blowing reverse psychology that could change all we’ve known about music and the Web: Could piracy be good for music?