Freedom to Tinker: New Study of the Net’s Impact on CD Sales:
First, what the study found was correlation, not necessarily causation – it may be that some common factor is causing both Internet usage and CD purchasing. Second, the study measures marginal effects, not average effects. We cannot conclude that every Internet user in a metro area contributes an extra 3.5 CD sales; we can say only that adding one more Internet user would increase sales by that much.
What does it all mean? And how does this connect to previous studies on filesharing? For my answers to those questions, tune in Monday, when I’ll unveil my Grand Unified Theory of Filesharing.
So if this is true — that internet usage is correlated with music buying — the entertainment colossi who have interests in both music and internet access are missing a bet if they don’t work out some way to drive that even further to their advantage. Arresting music lovers would seem like the wrong approach.
3.5 CDs a month, at $5-8 profit per CD, is a nice revenue stream.
It will be interesting to see what Professor Felten has up his sleeve.