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).

Filed Under: file sharing, leak, robert hammond

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    PaulT (profile), 18 May 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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