Tuesday, March 29, 2005

More Ways to Share Files, Yet Shipments are Up

A recent study by the Pew Internet & American Life Group showed that about 18-20mm people are engaged in the sharing of digital music files via means other than P2P apps like Kazaa, Limewire, etc. Email, IM and "taking songs from someone else's iPod"(whatever that means) were quoted as the leading choices for folks who share outside of P2P apps.

All of these new capabilities combined with traditional P2P usage (which the study shows is flat in terms of % Internet users using P2P) should be enough to tank the music industry if they really were that damaging.

Strangely though, unit shipments in 2004 vs. 2003 were up slightly (2.7%) proving that there is still healthy consumer interest in a physical product / uncompressed files. Note: revenues were down during this period in part due to price reductions.

Given this data, some are crowing that P2P helps sales. And while that may ultimately be proven to be the case, the fact that year on year unit shipments were up for one year may not be sufficient evidence yet to that say that file sharing helps sales.

But it certainly casts some warm sunshine on the contention that file sharing can only do harm.

Clearly, at upto11.net, we see proof of the power of P2P to drive sales every day. Fans discover music by exploring P2P user's shared collections and then go on to buy music at Amazon, iTunes. Our sense is that most, if not all of these transactions are sales that might never have occurred had P2P-based recommendations not been available.

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