critique of "effect of file sharing on record sales"

I agree that online file sharing greatly affects the music industry in regards to record sales. Why would someone pay ninety-nine cents for a song or fifteen dollars for a whole CD when they can download the same song or CD, often times with the same sound quality, off the internet for free? I can imagine that online file sharing would be detrimental to an artist’s record sales. It is interesting that professor Felix Oberholzer-Gee found that most people only download the hit song, rather than the entire album. This conclusion of Oberholzer-Gee’s makes me question whether record sales can include both the profits made from the sale of a single song, and from the sale of the entire album.

I agree with Ty that the economics of the music industry is affected by the rapid growth of technology. I think it is time, with the growing music industry and the even faster growing world of technology, to start to look at online file sharing as its own market. Each online file sharing service (itunes, rhapsody, etc.) would be considered its own firm. The competition between online file sharing services and tangible stores (best buy, Barnes and Noble, etc.) has become too weighted on the online file sharing side for this market to be considered fair competition among similar firms. I think it would be interesting to watch the effects of putting the online services into their own market, and then leaving the Best Buys and Barnes and Nobles to their own market and competition.

The data that supports the conclusion that peer-to-peer online sharing sites directly collate to the increase in the music industry’s record sales suggests that it would be in the music industry’s best interest to try and control these peer-to-peer online sites. If the music industry would be able to control these sites (somehow profiting from the activity that is already generated) then the online file sharing world would no longer be such a mystery to record sales. The music industry would then be able to create an oligopoly market. In this oligopoly the music industry would have a great hand in promoting their product (the various songs/albums) because as the Harvard research concluded, the peer-to-peer websites boosted record sales. These websites served as a “sampler” to the artists’ work.

Due to people now downloading, therefore being more interested in, only single songs rather than an entire album, maybe it would be beneficial for the music industry to expect more profits from their singles rather than the entire album. Artists used to release “single CDs” separate from their entire album, maybe a look back at this marketing strategy would be beneficial not only to the artist, but the record company as a whole as well.