Downloading doesn't affect sales of CDs. Perhaps

Peer-to-peer file-sharing tends to increase rather than decrease music buying, according to a study produced for Industry Canada by Birgitte Andersen and Marion Frenz of the Department of Management at Birkbeck, University of London.

In fact, the research suggests that "for every 12 P2P downloaded songs, music purchases increase by 0.44 CDs".

However, the researchers admit that "our results ... are mixed". The paper says: "In the aggregate, we are unable to find direct evidence that P2P filesharing either increases or decreases CD purchases in Canada. That is, in our analysis of the whole Canadian population, we are unable to find any relationship between the number of P2P music tracks that were downloaded and the number of CD purchases."

The study says that there is a positive effect on CD sales from people ripping CDs, and there's also a positive effect "from individuals downloading via private websites".

However, there is a negative effect on CD sales from the number of individuals copying other people's MP3 files.

Earlier research by Felix Oberholzer-Gee and Koleman Strumpf has claimed a positive impact from file-sharing, but has been shot to pieces by Stan Liebowitz, from the University of Texas at Dallas.

Liebowitz keeps asking the brutal question: "What has caused the recent large decline in record sales if not filesharing?"

On his website, Liebowitz says: "Contrary to the large increase in album sales predicted by [Andersen and Frenz], album sales in Canada have fallen considerably since 1999. According to the IFPI, which represents the recording industry around the world, unit sales were down 30% by 2005 whereas statistics from the Canadian Recording Industry Association indicate that unit sales were down by 20%.

"To believe the results of A/F you must accept that sales have dropped by half in six years, due to some factor that no one can identify. Does this seem even remotely plausible?"