A report from the Institute for Prospective Technological Studies, part of the European Commission’s Joint Research Centre, has found that “digital music piracy does not displace legal music purchases in digital format”, and that there is unlikely to be much harm done on digital music revenues.
The study specifically looks at the impact of online streaming and downloads, both legal and illegal on digital music sales rather than sales of physical media such as CDs.
A total of 16,000 Europeans from five countries (Spain, France, Germany, Italy and the UK) had their browsing habits examined, and perhaps the most striking finding was that the majority of the music that is consumed illegally by the individuals, would not have been purchased if illegal downloading websites were not available.
The study also found that illegal music consumption could stimulate legal music consumption. Since music is an experience good, ﬁle sharing can allow consumers to sample specific songs or albums which can inform them on what to buy. Similarly, the sampling of a speciﬁc song may stimulate individual demand for other songs by the same artist.