Recently we’ve seen several studies of the impact of filesharing on CD sales. We have enough data now to draw some (very) preliminary conclusions, assuming the studies are correct. Despite the apparent contradictions between the various studies, I think there is a plausible theory that can explain them all – a Grand Unified Theory of Filesharing.
First, let’s review the three main results that have to be explained.
- Survey-based studies, which ask people whether they use the Internet, whether (and how much) they use filesharing, and how many CDs they buy, find that people who fileshare buy fewer CDs.
- The recent econometric study by Oberholzer and Strumpf, based on per-album time-series data on filesharing activity, CD sales, and other factors, found that filesharing has little or no effect on CD sales.
- Eric Boorstin’s study found, controlling for differences in personal income, that there is a strong positive correlation between Internet usage and CD purchasing. This held true for all age groups, except the 15-24 group, for whom Internet usage correlates negatively with CD purchasing.
(It’s undisputed that CD sales have dropped sharply in recent years, but there are several plausible causes for that drop. That’s a topic for another day. Here, I’ll assume only that filesharing is not the only cause of the sales drop, so that we don’t need filesharing to explain the drop.)
The Grand Unified Theory explains the study results by breaking down the users of filesharing into two subpopulations, which I will call Free-riders and Samplers.
Free-riders are generally young. They have few if any moral qualms about filesharing, and they tend to assume that others feel the same way. They use filesharing to accumulate libraries of music, as an alternative to buying CDs.
Samplers are generally older and more risk-averse. They are highly engaged with cultural products of all sorts. They are morally conflicted about filesharing, and use it mostly to download songs that either aren’t for sale, or that they don’t value enough to pay for. They buy music that they really like, and filesharing causes them to find more music they like, so it tends to increase their CD purchases.
Now let’s look at how the theory explains the studies’ results.
In survey-based studies, Free-riders admit to filesharing and to buying fewer CDs because of their filesharing. But Samplers are reluctant to confess their filesharing to a stranger, being more risk-averse and more attuned to the dubious moral status of filesharing (not to mention its illegality). The result is that Free-riders are overcounted in survey-based studies, and Samplers are undercounted, so survey-based studies find that filesharing depresses CD sales.
The Oberholzer and Strumpf study measured the actual impact of both Free-riders and Samplers, and found that the lost sales caused by Free-riders are balanced by the increased sales due to Samplers.
The Boorstin study had different results for different age groups. His 15-24 age group was mostly Free-riders, who buy fewer CDs when they have Internet access, because their filesharing substitutes for purchases. His older age groups were mostly Samplers, who buy more CDs because of filesharing, and who are also, because of their high level of cultural engagement, predisposed to both Internet usage and CD purchasing. Therefore he found that young Internet users buy fewer CDs, while older Internet users buy a lot more.
So there you have it: a theory that explains the study results, and that seems plausible (to me, at least). Of course, there are lots of caveats here. One or more of the studies might be wrong; or the studies might be right but the theory wrong. But bear with me for a bit longer as I explore the possible consequences of the theory.
The theory says that the net effect of filesharing on CD sales is roughly zero, because of a balance between the negative impact of the Free-riders and the positive impact of the Samplers. But what happens in the future? It all depends on what happens to today’s Free-riders.
Perhaps today’s Free-riders will mature into Samplers, to be replaced by a new generation of Free-riders, so that the effects of the two groups continue in a rough balance. Or perhaps today’s Free-riders, never having known anything else, will keep Free-riding as they get older, and the balance will tip toward Free-riders.
It’s also worth noting that the theory does not predict whether (illegal, free) filesharing will reduce online sales of music. Probably the answer depends on what the online alternatives look like, and how convenient they are to use.
So the theory can explain the present situation, but it doesn’t make strong predictions about the future; or, if you prefer, the theory comes in several flavors, which differ in their future predictions. If we had a better handle on what makes one person a Free-rider and another a Sampler, we could make better predictions.
[Thanks to Eric Boorstin and Andrew Appel for helping me develop and refine these ideas.]
Pirating estimates have always been grossly overstated. This is quite an interesting theory, however, I have always known, even without a survey, that all pirating estimates are grossly overstated for the following reason: If a product is overpriced and someone cannot afford it or believes the product cannot produce the value that would be necessary to justify purchasing it, THEY WOULD NEVER EVER PURCHASE THE PRODUCT UNDER ANY CIRCUMSTANCES, althought they might pirate the product to use a time or two or to check it out or listen to song once or twice then never return to it. Therefore, counting all pirated songs or software toward “lost revenues” is absolutely rediculous and wrong. The industry knows this but wants an avenue to bring about total control of electronic devices that will then rake money into their hands if they are used at all. I don’t think it is about copyright infringment at all but about control of device use.
It’s interesting that CDs one could guess have a somewhat older demographic also tend to be more expensive. I’d also note that here (New Zealand) CD singles are uneconomic for (most of) the stores to stock. So you can’t get them anyway, making singles sales very low.
So I guess the industry needs to rethink its pricing if it wants more sales, rather than blaming the listeners. Everyone knows a silver CD can’t cost that much more than a gold one…
This is a purely economic issue for music buyers. Music is feverishly marketed to younger adults and teens, yet CD prices are way out of the range for this particular age group. If a CD cost $10 instead of $20 would file share-ers be more likely to actually drop cash rather then “stealing” through file sharing? What if music buyers were given the option of buying only certain tracks off a CD (“Pay-per-track”)? I’ll bet that most CD buyers are only interested in certain tracks on any given album.
Ethics of file-sharing aside, I think trying to contain the flow of electronic information is an impossible task–this is an issue that can only be managed.
Yo.
This is an interesting theory. The only problem is that it doesn’t take into account the fact that it’s EXTREMELY hard to get a job through most of high school and nearly impossible in college. Because of that, most of the people in the 15-24 age group have little or no spending money. I can’t speak for everyone, but on the rare occasions I do have money, I look at what files I’ve downloaded and buy one of the albums. Anyways, MP3 encoding sucks at any bitrate less than 256kbps. (which is very hard to find on gnutella or eDonkey)
Essentally, AFAIK most people in my age group would love to go to The Wall and get all the albums they can. But, without money, it isn’t goung to happen.
Lightiing
I like the concept of this site! The theory that is promoted, points us in the right direction. The internet should be a free and vibrant interface for the masses, and we should be careful to avoid any overregulation. What I have discovered is that when something is no longer “forbidden fruit,” it tends to lose its luster. Downloading unique songs you are looking for is a great pursuit, but to do it on a massive scale doesn’t make much sense unless you have a radio station. Once you realize it is easy to do, after a while the thrill wears off. Artists and labels need to find ways to give downloaders a few free tracks, so that consumers get a taste for the group and then buy the whole album. As we have seen recently, when better music is produced (say, Norah Jones), sales increase. But CD prices are still pretty high. So I think that the internet helps to make music better, and in the long run, helps sales of quality music. Let’s not kill the goose that lays the golden eggs (records)!
I think that for me personally file sharing (and cd burning, even before I got into file sharing) has a larger effect on what CDs I buy than how much money I spend on music total, and I think this may apply to others who listen to music that is outside the mainstream as well. Since cd burners became prevalent, I don’t think I have ever purchased a CD that was already owned by my friends. Why bother? The money instead goes to buy CDs that I don’t know anyone who owns. Now, I also tend not to buy CDs of artists for whose songs I can find online in large quantities, unless I am very very impressed by them. More often, that same amount of money goes to buy CDs of obscure bands which are often independent or signed to small non-RIAA labels, or else have been out of style for quite a while (recent purchases include the New Radicals, Fono, and Tourniquet). Lately I have also switched to ordering CDs on eBay if I can find them instead of buying them new because then the same limited funds can buy three or four times as many CDs. Does all of this take money away from the RIAA? Absolutely. But in the long run it may put money in the pockets of indie artists and smaller record labels, so the claim that it somehow hurts music is probably completely unfounded.
I never really purchased CDs in the first place. I would always copy them from friends. I always found them too expensive in the first place. Now, I download instead of copy from friends.
When I do purchase CDs its from second hand sources like ebay and Amazon.
Your division of filesharers into free-riders and samplers isn’t very scientific, it’s an assumption. Had you based your findings on a survey of filesharers I’m sure you’ll find the division isn’t so cut-and-dry. According to your theory, I should be a sampler but my behaviour says otherwise. Ergo, yours cannot be a unified theory.
Yes, I used to be one of those dastardly Free-Loaders back in the 70’s. I used to go into the library at least two or three times a week and read a book without paying for it. I only bought books at used book sales held annually by the Friends of the Library. I used to check out records from the library and listen to them on a turntable at home. The very picture of a Free-Loader. Now, I earn a respectable salary and I buy my books. Fresh. Straight off the shelf at the bookstore. I still go the library, but after reading a good book, I buy it. I’m a Sampler. I like to own my stuff, so I can get to it when I want to, where I want it. The big difference – I actually have the opportunity to earn a living – unlike my much younger Free-Loader self.
Jim,
I accept what you’re saying, but would argue that much of the problem Samplers face in locating new music comes from the fact that radio now is really quite a nasty medium to use for the purpose. Which is where stream-ripping comes in, surely?
Yes it has poor quality, awkward cross-fades and the rest, but at least you’re getting 90% solid music tracks without the deluge of naff advertising. I suspect that it may just be the salvation of the music business in the long run.
And I don’t subscribe to the view that it automatically leads to Free-Riding. Quite the opposite in fact. 🙂
Thoughts for Red concerning stream ripping:
Yes, stream-ripping allows a Sampler to morph into a Free-Rider with ease. Just like tape recording from a physical radio, there is nothing that can be done to stop it. The ultimate undetectable stream-ripper is a tape recorder/mini-disc plugged through the sound out of a sound card. This method of capturing sound is obviously not new.
Which brings us back around to what in my mind is the fulcrum between Free-Riders and Samplers. Time. Just like with making mix tapes, it takes time to record and then compile stream ripped MP3s. In addition, you have to contend with the inconvenience of DJs sometimes talking over the music, crossfades between songs and the lower audio quality of MP3s (particularly on anything less than a 128kbps stream).
Those with the free time (but not the money) to do all the processing will continue to do so. But my experience shows there’s still a large portion of the adult listening audience for whom the economic break-even point still rests solidly on a CDBaby click and order. It’s cheaper in terms of time expended for quality gained. In addition, if they are buying from a smaller independent artist, they get the warm fuzzy of knowing they are directly supporting an artist who’s work emotionally moves them.
I suppose if you accept the equation time=money then the method of capturing sound (P2P, newsgroups, stream-ripping, etc.) doesn’t matter. It’s still time expended. Where the break-even point of time vs. money rests depends on the difference between end results (MP3 vs original CD), the individual’s personal circumstances and the value they assign to having a ‘shiny CD with liner notes and a personal thank you from the artist’ in hand.
Free-riders and Samplers
Insightful stuff backed up by good numbers. A Grand Unified Theory of Filesharing: The quoted studies indicate kids download it for free and don’t mind telling you, adults often buy what they download and don’t like to brag about stealing….
The one piece that is overlooked in explaining why these 15-24 year olds are mostly Free-Riders instead of Samplers is purely economical: 15-24 year-olds have less money to spend than 25+ year olds. Rob Rose came closest to this reality when he mentioned sharing music in college “because none of us had a lot of free cash.” College students in particular are stereotypically strapped for cash at all times and are always looking for cheap or free alternatives to spending money.
Many Free-Riders don’t buy albums simply because they can’t afford them. As a result, many of these downloads do not result in fewer album sales for the simple reason that the individual Free-Rider cannot afford the album whether or not he has downloaded a song from the Internet.
As these cash-strapped Free-Riders grow up, mature, and get jobs, many will become Samplers for the basic fact that they have the money to spend. Regardless of motives, morals, and risk-tolerances, the people who buy music are the people who have the money to do so. Period. No money–no purchase. Plain and simple.
This theory seems pretty on track. The underlining issue is used music per downloaded music. Not every file downloaded will be actively listented to or kept. Up until (the last 5-10 years) now you couldn’t select which ones you wanted besides singles. Yes, some people will keep what they have downloaded but if it had value, like a CD, they would not keep it (assuming they could sell it). To accept the above therory you have to agree to two definitions. One, Free-riders will not buy music they place intrinsic value on, second, the fact that Samplers will. That’s it, no exceptions. We know there will be people in that grey area that will be diven by things like cost and personal funds, but those two definitions must account for a majority. No study I have seen has account for that. Why, because the studies arn’t funded by people who want the truth, they are funded by people who want their own truth to be told. Sorry, thats just the way it is. A good study would be one that forced people to chose. Most good studies involve closed conditions. Get a group of people together and only offer them only one way or another. Eliminate other varialbles and put some type of pemium on CDs (like offer them the chance to get 10 CDs or 100 downladed files). You would get accurate results.
The fact that neither side of the issue seems to want to conceede anything should be proof of this. I would be more wary of the group with something to loose though.
This leads to the consparacy side of things. I know there are only a few hits on any given CD. The industry is well netorious of milking a good song by filling a CD with a bunch of crummy ones. There has been no way of circumventing this until file sharing and later buying individual songs via the web became popular. There was (and still is it seems) an issue of getting liesences for some songs. I am sure if someone were to check, at least SOME of the best selling songs are not avialable on iTunes, ect. The companies stand to loose money not only on unsold songs but also because of generic pricing on more lucrative songs. These online music companies will never have the seletion that CD’s have as a result
It all leads to the undenyable fact that nothing (legal) is free.
How does the growing practice of stream recording fit into this Sampler vs Free-riders theory? It seems to me that Samplers can just as effectively gain access to a wider range of new music pre purchase by using programs like Station Ripper (http://www.ratajik.com/StationRipper/) to record tracks in genres they enjoy. They don’t have to go through the hassle of downloading and burning.
i don’t know anyone who uses filesharing to get their music. it’s a pain in the ass. my friends have generally ripped their CD collections, and then they borrow a firewire drive from other friends.
“filesharing” a la napster is like buying drugs on the street. it’s for the desperate and clueless.
I hate to break up the hipster party, but I was under the impression (perhaps mistaken) that a huge fraction of RIAA member sales is generated by a few heavily marketed superstars-du-jour, as opposed to the thousands of quirky acts that the “samplers” model depends on (and that FtT commentators seem to embrace). Nearly 10 percent of CDs, for example, are sold at Wal-Mart, which presumably doesn’t waste a lot of shelf space on obscure bands. And I would surmise further that a large fraction of the sales of this heavily commercialized music is to people who are not (yet) adept enough at computer and Internet use to exploit file-sharing.
If I’m right, then the reason that file-sharing hasn’t heavily dented CD sales is simply that for all the Internet traffic they generate, Kazaa et al. haven’t yet cut all that much into the mainstream market. Of course, if–or rather, when–file-sharing gains traction among the Wal-Mart crowd, they’re not going to be doing much “sampling”, looking for little-known recordings that appeal to their esoteric musical tastes. They’ll presumably do what they do now: acquire the most popular songs recorded this year–except that they won’t have to pay for them anymore, because they’ll be the top files distributed over everyone’s network.
I suspect that’s the scenario that keeps RIAA member-company execs awake at night.
The RIAA’s semi-hysterical responses aside, there have been thoughtful challenges to the Oberholzer/Strumpf study serious enough to leave some doubt about its conclusions. Stan Liebowitz at Univ. Texas offers a detailed critique on his web site. My own critical reactions are too extensive to detail here, but I can summarize them by stating that Oberholzer/Strumpf did not, as they claim, study “the effects of file-sharing on record sales”, but rather the effects of small fluctuations in the ease of file-sharing on record sales. Professor Oberholzer has graciously responded to my criticism by acknowledging that more data are needed to extrapolate from his observations to file-sharing in general. The possibility that file-sharing seriously depresses CD sales has therefore not yet been excluded. One final point of an ethical character: even if file-sharing does not do harm on average, anyone who illegally helps him/herself to a free download without the artist’s consent may be harming that individual artist. That marks the enormous difference between the moral significance of giving away free samples and taking them without permission.
To Cypherpunk: I tend to agree with you. If file sharing were legal or just worked easily then I would never pay for the music. But neither is true today. Maybe Ed believes the free file sharing technology will not significantly improve and the laws will remain as they are today.
Also, relying on the morals of international samplers seems like a weak argument to me too.
BTW, I’m still awaiting the data set for the studies to be made available for peer replication and review. Eric used OLS, and he may have wacky, unexplained issues with heteroscadacity, outliers, or some other problem that impacts his results.
http://www.corante.com/copyfight/archives/002985.html
Ed Felten on Freedom to Tinker hypothesizes a melding of several studies on file-sharing, creating A Grand Unified Theory of Filesharing. Copyfight noted the study here: Felten’s Grand Unified Theory of File-Sharing. Felten divides the filesharing worl…
Felten’s Unified Theory
On his Freedom to Tinker blog, Princeton computer science professor Edward Felten presents his “Grand Unified Theory of File Sharing,”…
Two of the appeals of owning CDs are: the power of possessing the shinny disc, and (to initiate the “concert”) the ritual of spinning the shinny disc to make music.
I think at least some of us who grew up with albums and CDs continue to strongly relate to this (80-90 year old, legacy) idea of music that comes out of a shinny disc. Even when we download and/or listen without the disc, something seems missing until we possess the disc as well.
At least some of today’s free-riders are also people who have never embraced the ritual of the shinny disc–they aren’t simply too young / inconvenienced to possess the discs, but are creating new rituals (or putting greater priority on different rituals, e.g., making playlists and sharing them) as well.
Cypherpunk,
I agree with your belief in economics, but I’ll suggest there’s a couple of factors you haven’t considered:
1) Convenience. It’s not clear that P2P is more convienent than buying the CD. Is it more convenient to pop into BestBuy at lunchtime and buy a CD, or in the evening spend 45 minutes tracking down all the cuts on a CD? It depends if you have a family that demands your attention at night.
2) Risk-aversion. I’m including viruses and trojan horses, as well as legal. Again, if I’m young with lots of time on my hands the risk of having to reinstall my system to get rid of a virus is acceptable because I’ve got the time to do it. If I’ve got a fulltime job during the day, plus my home computer has all of my checking and stock information on it I’m not going to risk it.
Wonderful insights.
Several people have alluded to this, but I’ll simplify. Time. Samplers, being older and busy with day-to-day requirements of making a living, simply can’t afford the time required to find, download and process high-quality music from the web.
I’ve noticed this distinctly on Whole Wheat Radio. We cater to adult musical tastes and the majority of listeners stay tuned in all day from work or home. They are samplers. When they hear something they like, they click a link and buy from CDBaby. They have little interest in downloading the music because the time involved costs more than the quick link click. In addition, most are aware that CD audio quality will be significantly better than what they’re hearing over the stream. Because we play high-quality independent artists who are difficult to find on a single consolidated listening source, we save listeners the surf time required to find these musicians.
This natural symbiosis between samplers listening while working and their purchasing of CDs seems to work well for artists and listeners in our case. Our adult audience almost demands a sampler mentality as opposed to a free-loader mentality.
I think your theory is probably quite correct, and I would put myself firmly in the “sampler” category. I’ve bought more CDs in the last couple of years than the 10 prior to that. (Though, not neccessarily mainstream CDs.)
One unfortunate consequence of your theory, if it’s correct: The situation has to remain the same. The RIAA can’t in any way legitimize the free P2P sharing, because then I have less reason to buy the CDs I do. (Well, not actually true in my case, since I want the original CDs still, with artwork, ripped the way I want, etc… but true in general, to whatever degree.)
The most interesting thing for me is that if this theory is true, then the RIAA is doing the right thing in a buisness sense. Why worry about the population of free-riders diverging in the future when you can make your market stable through legal means?
This sampling idea doesn’t make economic sense. Sure, maybe people can find new musicians and new genres they like via file sharing. But then, why go and buy the CD? They’re already sitting at the computer, they can download the entire catalog with a few clicks of the mouse. And it’s free. Going to the record store involves far more time and trouble, not even counting the cost of purchasing the music. And if your new favorite genre is at all extensive, it will cost you a fortune to acquire an extensive collection, again compared to zero cost for getting it online.
I can’t help noticing that there is an overwhelming ideological desire around here to believe that file sharing will not hurt CD sales. People will fasten onto any superficially plausible story which helps them to maintain this belief.
Me, I believe in economics. I believe most people are motivated by self interest. And I believe that few people will pay for things if they can get just as good quality and greater convenience without paying. Call my cynical, but that’s the world I live in.
Please be careful with statements like “It’s undisputed that CD sales have dropped sharply in recent years”. It’s undisputed that CD Singles sales have dropped. I’m not certain but I think I’ve seen studies that show that CD Album sales haven’t dropped and in some markets have risen. Where they have dropped it’s not hard to argue that it’s a side effect of general economics. Either due to recession or to price elasticity.
Having said all that I like the theory. As for me, like Philip my tastes are getting more obscure with age not less. Which means that filesharing systems like Soulseek are invaluable to me for finding new musics. If things like EMI cutting their inventory force me to non-RIAA sources then so be it.
Then there’s my large collection of vinyl. I can’t buy this stuff on CD because it’s all back catalogue. And it’s a pain to convert to MP3. I really don’t have a big problem with downloading music I’ve already bought and that the record companies can’t supply to me in new forms. There’s a business in there if they could only see it.
Great article. I’d like to add to the comment above in that some free-riders will simply stop filesharing as their priorities in life change. The 19-year-old in a dorm room with a fast connection may feel music to be a great part of their life and will download accordingly, but ten years later when they are married with kids, things like the mortgage, the lawn, and the PTA may be the most important things in life, and music may be a much more passive interest. Don’t laugh – it happens!
As an aside, the RIAA doesn’t bankroll bands. Music labels are members of the RIAA and bankroll it.
Very well written. The concepts are simple and lucid, good stuff.
I suspect that many Free-riders will turn into Samplers as they age, for three big reasons:
1. Taste-refinement (as Philip Levis states).
2. Desire to support taste producers (again, as Levis states).
3. Free-riders and their peers become producers themselves.
A surprising number of people will, I’m sure, change their position on “paying for stuff” when it’s *their* stuff on sale.
CU
the theory sounds pretty good to me, though it seems like it could be explained with only samplers. with regards to the first point, maybe the reason that people who share buy fewer CDs is that they are sampling and finding out that there’s a lot of crappy music. thus, with more information at their disposal they are more aware of what’s out there and less likely to buy it. with regards to point 2, maybe samplers are cancelling themselves out. that is, for every CD that is sampled but not enjoyed, there is a CD that is sampled and enjoyed to the point where it is purchased. lastly, with regards to point 3, perhaps the reason that CD sales correlate positively with internet usage for everyone but 15-24 year olds is because the average 15-24 year old comes into contact with more music and more band names (i.e. artists to check out) than any other age group. maybe the sheer number of artists that they sample means that they have enough music to listen to from sampling that buying CDs to hear music is less urgent. perhaps eventually they’ll buy CDs they like, but in a way they are overwhelmed to a certain extent with new music.
these are just the first thoughts that popped into my head after reading the original theory. i don’t knwo if they’re logically consistent but i just wanted to put them out there…
I think your theory is interesting, but the conclusions drawn here in the comment section ignore something that I found to be the most important fact of Oberholzer and Strumpf. The study states that one sold album equates 5000 downloaded songs, meaning people download far more music than they would ever be able to buy. There is little proof that all these downloads are songs that people are not considering worthy to buy – it’s just economically impossible for them to do so at the current price rate.
Now let’s assume that most of these mass downloaders are Free-Riders. The idea of them maturing and growing up to become responsible Samplers seems to imply that they give up a very wide horizon of music – somehting that I would consider unlikely. I’d rather think that today’s Free-Riders learn to consume music in a very different way than generations before used to.
I think your GUT is right on, with a few caveats pertaining to the characterization of Samplers. Until I was about 26 or so, I was a Free-rider. Now I’m a Sampler, but not because of a moral quandary. My tastes have refined to the point that I mostly listen to small artists who aren’t mass-marketed and bankrolled by the RIAA. Correspondingly, I want to actively support them (as opposed to an industry), and do so.
I once read an interesting interview with DJ Shadow, in which he said that he thought filesharing was hurting his sales. He said he didn’t particularly care about the reduced revenue, instead, was worried that the drop in sales (e.g. from 120K to 90K) would cause him to have a lot of difficulty getting good distribution. That is, difficulty getting his music to fans. I had downloaded most of his stuff and liked it a lot, so I went to Amoeba and picked up his albums.
Felten’s Grand Unified Theory of File-Sharing
Ed Felten has posted his attempt at synthesizing the supposedly contradictory studies on how file-sharing affects CD sales: The Grand Unified Theory explains the study results by breaking down the users of filesharing into two subpopulations, which I w…
If this is true, then it brings up an interesting follow up point on what the industry should be doing.
In the past, when I’ve suggested that the recording industry figure out a way to tie payment of music to services such as access to concerts, merchandise or additional contact with musicians (combined in some sort of “fan club”) people always pointed out that older music listeners didn’t care about such things, and thus it wouldn’t be a reasonable solution.
However, the theory above would suggest that the industry should focus on ways to turn *younger* file sharers into samplers instead of free loaders, and the way to do that is to give them more incentives to buy. Using purchases as a way to get access to those additional services seems like a perfect way to do so – without changing the situation at all for older samplers.
Of course, instead of doing that, the industry is simplifying things and trying to stomp out the samplers as well as the free-riders – which doesn’t seem particularly intelligent.
My intuition is that samplers are people who had dropped out the market because of a lack of discovery tools. Existing discovery tools are strongly oriented towards the highly social lives of young people, dance clubs for example. The internet allows underserved potential fans to find new music in a way that fits their lifestyle.
I tend to agree with your theory because it matches what I’ve seen among people I know.
This behavior is not new… when I was in college in the late 80’s because none of us had a lot of free cash people would make tapes of each others CDs and sometimes entire dorm floors would participate in the borrow and tape.
I would argue that a large percentage of today’s samplers were free-riders in the past before they got real jobs and matured a bit. The only thing that’s changed really is the quality (MP3 vs cassette) and the scale (80 people on a dorm floor vs the internet).