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February 15, 2005
Facts Are Stubborn Things
Posted by Dana Blankenhorn
The Copyright Police keep coming up against stubborn facts, some of their own making, that throw their arguments into the dumper.
Two are making headlines today.
First is a joint study by Harvard and University of North Carolina researchers indicating "Downloads have an effect on sales which is statistically
indistinguishable from zero." Felix Oberholzer (Harvard) and Koleman Strumpf (UNC) matched a set of downloads to record sales in coming to this conclusion. "Even in the most pessimistic specification, five thousand downloads are needed to displace a single album sale," they write.
The second piece of news comes from the industry itself.
It is, simply, the launch of Napster's "rental" service. For $15/month, you can download all you want. It all disappears when you stop paying, but the industry approved this business model, which estimates the actual value of unlimited downloads at $180/year. Spread that over 10 years, give Napster 15%, and you get an actual industry-estimated "loss" from unlimited downloading of $1,500. Not much.
This will make for some fun when I speak this weekend at the University of Virginia's VJOLT Symposium.
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