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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  1. icon
    Robert (profile), 18 May 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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