New Study Says Leaked Albums From Popular Artists Lead To More Sales

from the interesting-findings dept

TorrentFreak alerts us to an interesting new research paper from Robert Hammond, an assistant professor at North Carolina State University, looking at the direct impact on sales when albums are leaked early online. The study is pretty thorough in trying to separate other factors and isolate the actual causal impact. It's a bit of an extrapolation to claim that the study says "file sharing boosts music sales," as I don't think the paper actually goes that far. It seems to suggest, however, that for popular artists, having an album leaked appears to lead to a small, but significant, increase in sales. The impact is not seen for newer or less-well-known artists.
To put this result into context, consider the effect of leaking one month earlier on the sales of an album; that is, predict the effect of leaking one month earlier on the number of additional seeders per leecher, then predict the effect of these additional seeders on the number of additional downloads, then finally predict the effect of these additional downloads on the number of additional sales. This exercise predicts that an album that leaked one month earlier will receive 59.6 additional sales.
The report is interesting in that it uses a different, and perhaps much more revealing, data set. Hammond got the data from a popular private tracker that is well known for pre-release works. He claims, quite reasonably, that this means his results are much more useful than other studies that rely on proxies that may not be as accurate.

That said, the report notes that other that other sources of marketing seem to have a larger impact than file sharing. The study is interesting in that it at least challenges a few other reports that have argued that file sharing leads to fewer sales (and even a report that claims that the entirety of the decline in recorded music sales is due to file sharing). While Hammond mentions this particular study, by economist Stan Liebowitz (a vocal supporter of the entertainment industry's position on file sharing), he notes that the two were studying different things -- one macro and one micro. It's also worth noting that Hammond appears to have had Liebowitz review his study before publishing it (though who knows what he said about it).

I think the results here are interesting, but it still does seem like an area of research that needs a lot more focus, as I would bet there are many additional variables at work here, as we've discussed. We've seen that artists that do a good job connecting with their fans, and giving them a reason to buy, seem to see an increase in sales -- and that's independent of how the content is leaked or released (mostly, since you could argue that having the content available is one way of connecting).


Reader Comments (rss)

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  •  
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    :Lobo Santo (profile), May 18th, 2012 @ 7:09am

    Masnicks Law

    Yes, but it will never work for those small unknown artists...

    /troll
    (or is it /bob ?)

     

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    Anonymous Coward, May 18th, 2012 @ 7:18am

    Ready for trolls

    "But it's not YOUR choice if it leaks blah blah blah"

     

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    Robert (profile), May 18th, 2012 @ 7:22am

    half-assed

    If the artist goes in half-assed, no it won't work. If the artist understands it is not to mimic something someone else has done, but to understand the underlying process and adapt them for themselves.

    An analogy is GM and Toyota's partnership. GM sent employees to Japan and they learned how things are done there and upon returning, the plant turned around like you would not believe. GM's management, having not looked at the underlying process, asked managers from another struggling plant to take photos and mimic the first plant. It failed miserably.

    The same goes for the artists.

    Back to the topic... it will be impossible to predict something because you have so many variables at play, most of which are substituted not by data, but by assumed constants. Liebowitz, for example, would assume "Why would you buy when there is free?" and thus if something is available for free his model would predict 100% adoption of that method.

    Reality is, he's not able to predict the level of emotional connection between a fan and artist, let alone have a model that accurately represents the diversity of fans any one artist may have. Now try expanding that to the diverse types of music, geographical demographics (behavioural differences), and different levels of artist interaction and effectiveness of each...

    Well you get the point, you can't predict with any real certainty the behaviour thus the expected outcome, in this situation that is.

    My point: I doubt any independent study will shut up the politicians $$$upported by the entertainment corporations.

     

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    Anonymous Coward, May 18th, 2012 @ 7:23am

    provided they are leaked on purpose by the artists and/or the labels and they can blame 'piracy' for the leaks. this is especially true if the album is shit and no one wants to buy it anyway!

     

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      Robert (profile), May 18th, 2012 @ 7:27am

      Re:

      I fully suspect the labels and studios leak things and blame piracy anyway. If the leak does well, they pump heavy marketing, if it does not do well, they do a limited release.

      Either way though, they utilize leaking to improve exposure and conjure up sales, and as an excuse to complain about piracy.

       

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    The eejit (profile), May 18th, 2012 @ 7:33am

    Double "That other" before sources, first sentence, third non-quoted paragraph.

     

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    Ninja (profile), May 18th, 2012 @ 7:35am

    Releases are only anticipated and create buzz if the artist is well known. If I decide to create an album/movie/whatever now and leak it anywhere before the official release it's gonna have no impact because no1 is anticipating it. Now Lady Gaga is a whole other story. Leaking an unreleased album would only create massive buzz over it. So it makes sense smaller artists are not affected.

    I'm quite pleased with this study (even though I do have a few questions about the sample he used). But it is quite rare to see a study that shows exactly how the sampling was made (I haven't really dug dug into the study in depth but I do hope he took demographics into account and calculated deviations and such statistical wizardry).

    With all the limitations I'd say it's an AWESOME job that if nothing else, it debunks the usual claims from the MAFIAA about leaks. I wonder if they'll care to try and justify the lives of early leakers they destroyed to date.

     

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      Bas Grasmayer (profile), May 18th, 2012 @ 7:45am

      Re:

      Not sure if that gets it though.

      Smaller artists releases are definitely anticipated and generate buzz... just within a specific niche.

      I think it might have more to do with availability of purchase and what kind of consumers are typically interested in the artist's music. Smaller artists generally attract different consumers (with different consumption patterns) than bigger artists.

      Having a certain marketing budget also makes a difference... perhaps to amplify the buzz generated by the leak... but I'd have to look into the paper more carefully before I make any statements about that.

       

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    PaulT (profile), May 18th, 2012 @ 7:52am

    To put it bluntly, if an album is "leaked", then all that's happened is that a folder that was sitting on the record company's servers was made available before they officially wanted it to be. The "official" date is either totally arbitrary, created to fit into the label's own marketing schedule, or to allow for other types of media to be put into place (CDs, merchandise, tours, etc.). The music itself is ready.

    To a true "fan", this causes nothing but frustration. They know the album is finished, mastered and ready for release, but they're still told they have to wait. Since they're fans, however, they've probably already pre-ordered the album or at least would pay for the album on release date either way. Getting to a hear the album a few weeks before they were "meant" to is nothing but a positive thing, and unlikely to affect sales that much unless the album turns out to be really, really bad.

    However, music is also shared, and I think this is where an increase comes in. The fan will not only listen to the album, but recommend it and certain tracks to others. Thanks to the way the modern marketing machine works, it's not unusual to actually be tired of listening to a song before it's release. The weeks you hear the lead single being played and played before the album's release can have a detrimental effect, and might turn a "maybe" purchaser into a "no thanks".

    With a leak, these casual listeners can hear the full album early, before the marketing becomes over-saturated. Because of this, they may listen to the album with fresher ears, and be more willing to pick up a few tracks or the full album on release day, as they both know what the full album sounds like, and haven't tired of its sound yet. There's enough of these listeners to compensate for the people who may have bought the album, but change their mind either because the download is there, or because they listened to it and decide they don't like it.

    That's my take, anyway. I can't read the full study right now, but I'd be interested in seeing some of the points raised. It's nice to see another study debunk to moronic black-and-white world the maximalists like to pretend we live in.

     

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    Dave Reed, May 18th, 2012 @ 8:30am

    It's not about sales!

    See.. It's not about "sales" - you freetards, always wanting things for free…..

    Hmmm… that doesn't sound quite right.

    It's really about piracy! These pirates are SO sneaky, they'll even PAY FOR an album to hide their piracy….

    Hmm…. That's not quite right either…

    Think about the children!

    Heading back to cave to work on this one…

     

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      weneedhelp (profile), May 18th, 2012 @ 9:23am

      Re: It's not about sales!

      Sailing sailing over the ocean blue.

      "These pirates are SO sneaky, they'll even PAY FOR an album to hide their piracy…."

      LOL.

       

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    Anonymous Coward, May 18th, 2012 @ 9:00am

    Of course, the studt won't deal with issues like the artist already being desirable enough to pirate or leak. Nobody is giving a rats ass about an unknown getting their album leaked, in fact they probably have to leak it themselves, and still nobody cares.

    Popularity causes popularity, I guess. It's incredible hard to look at the buying decisions of millions of people and in any sane way attribute it solely to a leaked copy.

     

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      teka, May 18th, 2012 @ 9:14am

      Re:

      It's incredible hard to look at the buying decisions of millions of people and in any sane way attribute it solely to a leaked copy.


      i don't think that is what is being said.
      If anything it is just an example showing that a leak does not hurt a release and may be part of the fans showing the kind of dedication that makes it sell even better.

      or in other words.. and symbols.

      leak/"piracy"/file-sharing =/= lower sales.

       

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        Anonymous Coward, May 19th, 2012 @ 1:05am

        Re: Re:

        This logic just never seems to jive with concept that recorded music sales are way off, and that a current "hot release" sells way less than they use to. It seems that piracy in general (and leaking) leads to lower OVERALL sales.

        It's pretty obvious, no?

         

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          Bas Grasmayer (profile), May 19th, 2012 @ 1:24am

          Re: Re: Re:

          It's not pretty obvious when there's research out there (incl. but not limited to the one mentioned in the above post) is saying otherwise.

          It would be more accurate to 'blame' the format shift (from physical to digital), but there's really no point in blaming progress.

           

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          Anonymous Coward, May 19th, 2012 @ 8:29am

          Re: Re: Re:

          Only to you is it pretty obvious.

          A current hot release is naturally going to sell way less than they use to. Why? Unbundling. I and the rest of the people on the planet no longer have to buy an entire album just for the one song we want off it. We can go to Amazon or iTunes and get it by itself for $.99 as opposed to paying $15 for an album we don't want.

          In fact, that's basically why recorded music sales are way off. People are no longer forced to buy stuff they don't want. That and you know... economic recession, competition from movies, television, the internet, video games, etc. There is at this point in time more entertainment readily available both free and paid than at any other point in history. It's only natural that there will be some casualties. Hmm. Pay $15 for an album or buy a few books? Or rent a couple of games? Or use that money to go bowling? Or have an online video chat with a friend while we play Tetrinet?

          But it's much easier to blame piracy than actual competition, right?

           

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          PaulT (profile), May 20th, 2012 @ 12:56am

          Re: Re: Re:

          "It's pretty obvious, no?"

          Only if you're silly enough to assume that piracy is the only factor that would lower sales. Intelligent people recognise that there are a hundred other factors.

           

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    Anonymous Coward, May 18th, 2012 @ 9:59am

    Well duh!

    Why do you think they leak it?

     

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    Not an Electronic Rodent (profile), May 18th, 2012 @ 10:37am

    Seriously?

    I think the results here are interesting, but it still does seem like an area of research that needs a lot more focus,
    Really? Research? Why on earth would anyone want more facts when shouting whatever best supports one's pre-determined position at the top of one's lungs works so well? I mean, seriously, all facts do is increase the time one has to spend with hands over ears chanting, "La! La! La! I'm not listening!", instead of expounding one's own position. Simply not time-efficient! Facts? Research? Pah!

     

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    Anonymous Coward, May 18th, 2012 @ 10:47am

    In other news

    Grass is green, shite is brown and the Pope is Catholic.

     

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    Me, Jun 1st, 2012 @ 5:55pm

    BS

    I just needed to read the articles' title to say: "SO WHAT, STILL IT'S UP TO THE ARTIST, LAME EXCUSE"

     

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