A new study in the Journal of Political Economy has found that illegal music downloads have had no noticeable effects on the sale of music, contrary to the claims of the RIAA and other music industry organizations.

The study, The Effect of File Sharing on Record Sales: An Empirical Analysis, by Felix Oberholzer-Gee and Koleman Strumpf, matched an extensive sample of music downloads to American music sales data in order to search for causality between illicit downloading and album sales. Based on their analysis, the researchers estimated that P2P file-sharing affected no more than 0.7% of sales in that timeframe.

“Using detailed records of transfers of digital music files, we find that file sharing has had no statistically significant effect on purchases of the average album in our sample,” the study reports. “Even our most negative point estimate implies that a one-standard-deviation increase in file sharing reduces an album’s weekly sales by a mere 368 copies, an effect that is too small to be statistically distinguishable from zero.”

The report is sure to be controversial, but it doesn’t settle the P2P controversy. While there was no measurable negative affect of file-sharing on sales, there report doesn’t support claims by P2P advocates that file-sharing leads to increased sales because it helps popularize tracks. .

Podcasting News via Ars Technica

The major music labels agreed to support a new music service, Ruckus Network, that will offer free music downloads, with some substantial restrictions, to any college student.

Though it offers free music, the company has still struggled to find a way to pay for the service and may struggle to generate interest with students because the free songs are delivered with Microsoft’s PlaysForSure DRM, making tracks incompatible with both iPods and Zunes.

The service, from Ruckus Network, will be supported by advertising on its Web site and in the software used to download and play songs. The four major record labels and several independent labels agreed to license their music to Ruckus at reduced rates on the theory that college students would rather steal songs than pay the $10 to $15 a month that such services normally charge.

Phil Leigh, president of Inside Digital Media, a research firm, said that the move also represented a way for labels to experiment with advertising-supported music, a model that he said might be better for the labels than radio, because they could share in the advertising revenue. Music publishers, which represent the composers, are paid by radio stations, but the labels, which represent performing artists, are not.

According to the site, “French Maid TV is a 2 - 5 minute viral video of How-To’s by French Maids.”

It’s also been called “cheap and disgusting”, and “yet another excuse to take a few women, put them in lingerie and have them bounce around.”

We can’t argue with either viewpoint, but we thought you might want to know that their latest video shows how to find music using iLike:

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eMusic recently announced that they’ve reached a milestone, having sold 100 million songs as unencrypted (DRM-free) MP3s.

Tech bloggers are freaking out about the news:

• Digital Music News asks “So, uh, Mr. Major Label executive guy; How many million DRM free tracks does eMusic have to sell before you join the party? No, really.. how many?”
• Techdirt says that DRM-free music is the way to go, and that the major music labels are pretending that the jury is still out.
• MacWorld says that the labels are mulling life without DRM.
• WebProNews warns that they are going to keep slamming on Apple’s “rotten to the core” DRM in response to the “ever-growing consumer backlash revolving around Digital Rights Management.”

These guys need a reality check. Like it or not, sales of non-DRM’d music are trivial in the context of music industry sales, they are insignificant compared to the sales of DRM’d tracks at iTunes, and they don’t offer artists a serious new option for making money.

Continue reading ‘Why Bloggers Don’t Run Record Companies’

Credit card company Visa International said Wednesday that it has suspended service to music download site allofmp3.com, a Russian digital music download service considered considered a pirate by the music industry.

“It’s no longer permitted to accept Visa cards,” said Simon Barker, a Visa International spokesman. “The action we’ve taken is in line with legislation passed in Russia and international copyright law.”

The news comes as allofmp3.com launches a public relations campaign to counter claims by the U.S. government that the site is an outlaw operation.
U.S. trade representatives say allofmp3.com is profiting from unauthorized music sales. Executives of allofmp3.com say that the company carefully adheres to copyright law in Russia.
via CNET News