Are peer-to-peer music thieves the music industry's best customers? In an ironic twist to the music industry's woes, a new study suggests that P2P downloaders may buy more music than their straight-laced, non-P2P brethren. The results are non-conclusive one way or the other, but the researchers conclude:
However, our analysis of the Canadian P2P file-sharing subpopulation suggests that there is a strong positive relationship between P2P file-sharing and CD purchasing. That is, among Canadians actually engaged in it, P2P file-sharing increases CD purchasing. We estimate that the effect of one additional P2P download per month is to increase music purchasing by 0.44 CDs per year (based on estimates obtained from the negative binomial model in Table 4.3). Furthermore, we find indirect evidence of the 'market creation' effect of P2P file-sharing in the positive coefficient on the variable 'Not available elsewhere' (Table 4.3).
The research also indicates that the more someone is willing to buy music, the more likely they are to buy other forms of digital entertainment (games, movies, etc.).
This makes sense to me, as I fit the study. I buy a lot of music. I like the convenience of paying for a download over the web. In every instance I'll happily pay $.99 (or whatever) for a safe download from iTunes over a free download through Limewire or another P2P network.
It's all about convenience and distribution, perhaps the most compelling value driving digital music sales.