File-sharing (among Canadians, at least) is good for Big Music

Perhaps it’s because Canadians are a lot more honest than other North Americans, but I suspect the Canadian-government funded research study (here’s a link to the study, itself) into the effect of peer-to-peer music file-sharing on the purchase of music would be replicated in the U.S.

It’s one of those classic counter-intuitive findings that, well, if you think about it, is actually intuitive (unless you work for a record label). Here’s the conclusion of the study (as summed up by Jack Kapica):

“P2P file-sharing does not put downward pressure on purchasing music, as the music industry has insisted for years. In fact, it does just the opposite: It tends to increase music purchasing.

I have no doubt that the RIAA and the rights organizations will throw lots of money at creating surveys (or spin) that will rebuff or undermine this research. I suspect (as would my fellow armchair-economists who believe we are experts because we read Chris Anderson’s The Long Tail) the record labels can quickly show that the increased purchasing of music is not occurring among the blockbuster hits (the kind of music where they make their money), but along the long tail. In other words, they may believe the findings of the Canadian study but realize (from their spot on the “demand curve”) that it does them no good.

Personally, I can look back over the last five years and point to literally hundreds of dollars of purchases I’ve made because I can sample music in new ways via the web. In my case, I am sampling music via Last.fm or the massive sample file the SXSW folks put together each March. So, while I do not actively participate in anything that can be construed as an “illegal” file-sharing network, I can understand how having more exposure to an unlimited supply of music will result in the increased purchase of a small sub-set of that music.

No doubt, economists have a term for this behavior. If not economists, I’m sure there’s a German word for it.