http://www.nytimes.com/2002/05/06/technology/06MUSI.html?todaysheadlines=&pagewa\
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May 6, 2002
Access to Free Online Music Is Seen as a Boost to Sales
By MATT RICHTEL
isputing the position held by the major record companies, a report issued
on Friday found that people who use file-sharing networks to obtain music
at no charge over the Internet are more likely to have increased their
spending on music than are average online music fans.

The report, from Jupiter Research, a market and consumer research firm,
also found that people who use high-speed Internet access and CD burners to
make homemade compact discs — a practice that has been criticized by the
record industry as abetting piracy — are as likely to increase their
spending on music as to decrease it.

The report goes to the heart of the debate on the impact of computer and
Internet technology, specifically, the file-sharing networks like Kazaa and
Music City, which millions of people use to obtain music over the Internet.
The record companies, which have sued to shut down several file-sharing
services, including Napster, have asserted that the services cost them
billions of dollars in lost sales.

"File-sharing is a net positive technology" in spurring sales, said Aram
Sinnreich, author of the Jupiter report, explaining that people who
download music online often are, in effect, sampling it. "It gets people
enthusiastic about new and catalog music."

Last month, the International Federation of the Phonographic Industry, an
international record industry trade group, reported that revenue from
global music sales fell 5 percent in 2001, to $33.7 billion. Jay Berman,
the chief executive of the group, asserted that one of the major reasons
for the decline was "the fact that the commercial value of music is being
widely devalued by mass copying and piracy," but the group did not offer a
specific analysis of the phenomenon, or its impact.

The Recording Industry Association of America, the United States arm of the
international federation, argues, however, that its own research backs up
the claim. Geoffrey Garin, president of Hart Research Associates, a firm
that the recording industry association hired to study the issue, said that
in a November 2001 survey 23 percent of people from 12 to 54 said the
reason they did not buy more music was that they got music for free or they
were making copies of music on CD's or cassettes.

"People who love music and buy it and who also use file-sharing services
would be buying more of it were it not for the availability of free music
online," Mr. Garin said.

Mr. Sinnreich of Jupiter said that his research found that 34 percent of
experienced file sharers had decreased their spending on music, and that
that 52 percent of experienced file sharers had increased their music sales.

By comparison, among average Internet users who describe themselves as
music fans, and who may or may not use file-sharing networks, only 19
percent said their spending increased. Roughly 70 percent of this group
found that their spending had stayed constant.

The Jupiter report also found that 47 percent of experienced file sharers
with broadband Internet access and CD burners increased their spending,
while 36 percent decreased their spending.

One question raised by the report is why people would bother to pay for
music if they can get it for free. But Mr. Sinnreich said that while the
music was free, it was not problem-free, requiring users to invest time to
download the music, and put up with technological glitches.

Further, Mr. Sinnreich said, users who want to listen to their music
somewhere other than their computer — on a home stereo, for example, or in
the car — must take the additional step of "burning" it onto their own
compact disc.

"Anyone who has tried to download music from the Internet knows that free
doesn't mean free — it takes time spent, energy spent, hassle,
disappointing results," he said. "That's the kind of currency that
teenagers have but that people with a day job don't have."