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March 21, 2013

Web piracy does not harm music sales: study

IFPI criticises the study by calling it "flawed and misleading."

By CBR Staff Writer

According to a new report by the European Commission Joint research centre, online music piracy does not significantly affect legal music sales.

The study examined the online practices of 16,000 European people to find a connection between music piracy and visits to legal digital music stores.

Researchers said it seems that the majority of the music that is consumed illegally by the individuals in the sample would not have been purchased if illegal downloading websites were not available to them.

"The complementarity effect of online streaming is found to be somewhat larger, suggesting a stimulating effect of this activity on the sales of digital music," researchers said.

"Although there is trespassing of private property rights (copyrights), there is unlikely to be much harm done on digital music revenues."

During the year along study, researchers discovered that freely streamed music generated a small boost to sales figures, while music streaming services such as Spotify and Pandora were responsible for increased music sales.

The report also claimed that a 10% rise in clicks on legitimate streaming websites lead to up to a 0.7% rise in clicks on legal digital purchases websites.

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However, the international music industry body the International Federation of the Phonographic Industry (IFPI) criticised the report by calling it "flawed and misleading."

"If a large proportion of illegal downloaders do not buy any music (and yet consume, in some cases, large amounts of it), it cannot be logical that illegal behaviour stimulates legal download sales and inflicts no harm," IFPI said in a statement.

According to IFPI’s Digital Music Report, global music industry reported 0.3% growth in revenues to $16.5bn in 2012 for the first time since 1999.

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