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<TITLE>Internet file sharing boosts music sales</TITLE>
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<P><B><FONT FACE="arial">Here is an interesting report from Reuters which undercuts many of the intellectual property arguments related to online file sharing...</FONT></B></P>
<P><B><FONT FACE="arial">Internet File-sharing Boosts Music Sales, Report Says</FONT></B><BR>
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<FONT FACE="arial">May 03, 2002 16:20:35 (ET)<BR>
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<BR><FONT FACE="arial">WASHINGTON, May 3 (Reuters) - Internet users who download songs for free from unauthorized "peer to peer" services are more likely to increase their music purchases than regular Internet users, according to a report released on Friday. </FONT></P>
<P><FONT FACE="arial">While file-sharing services like Kazaa and Morpheus enable anyone with an Internet connection to access a huge library of music for free, experienced file sharers are more likely to actually increase the amount of money they spend on CDs, the report by research firm Jupiter Media Metrix said. </FONT></P>
<P><FONT FACE="arial">Thirty four percent of all peer-to-peer users said they spent more money on music than before they used such services, the report said, while 15 percent said they spent less. One-half said the amount of money they spent remained the same. </FONT></P>
<P><FONT FACE="arial">Online music fans who did not use file-sharing services were less likely to report increased spending. Nineteen percent said they spent more money on music, while 10 percent said they spent less and 71 percent said they spent the same amount. </FONT></P>
<P><FONT FACE="arial">Other technologies, such as recordable CD drives and high-speed Internet connections, had no impact on consumer spending, the report said. </FONT></P>
<P><FONT FACE="arial">Music companies say Internet piracy is partially responsible for a 5 percent drop in sales last year, and the industry has aggressively pursued file-sharing companies in court. Napster, the first such service, has been offline since last July as it struggles with a court order to keep copyrighted music off its system. </FONT></P>
<P><FONT FACE="arial">But the survey suggests that file sharing could provide a boost to the industry, said report author Aram Sinnreich. </FONT>
<BR><FONT FACE="arial">"The Internet is the greatest thing that ever happened to the music industry, and they're just missing out on cashing in on it," Sinnreich told Reuters. </FONT></P>
<P><FONT FACE="arial">Peer-to-peer users tend to be avid music fans who already spend more money than average on music. Rather than shutting down peer-to-peer services, music companies should cultivate these fans, Sinnreich said. </FONT></P>
<P><FONT FACE="arial">The five major recording companies -- Sony Music ((6758.T)), Warner Music (</FONT><A HREF="/cgi-bin/gx.cgi/AppLogic+ResearchStock?cmenu=DetQ%26prod=AOL:US:EQ"><U><FONT COLOR="#0000FF" FACE="arial">AOL</FONT></U></A><FONT FACE="arial">,</FONT><A HREF="/cgi-bin/gx.cgi/AppLogic+OrderForm?Symbol=AOL"><U><FONT COLOR="#0000FF" FACE="arial">Trade</FONT></U></A><FONT FACE="arial">), EMI Group Plc ((EMI.L)), Vivendi Universal ((EAUG.PA)), and BMG ((BTGGga.D)) - have introduced file sharing services of their own that, for a fee, allow users limited access to portions of their catalogs. So far, the services have met with limited success. </FONT></P>
<P><FONT FACE="arial">Some companies have turned to copy-protected CDs, which cannot be played on computers and some other devices. Universal is currently considering whether to release best-selling rap artist Eminem's new release in copy-protected form. </FONT></P>
<P><FONT FACE="arial">The report was based on a June 2001 survey of 1,911 online music fans, 305 of whom were experienced peer-to-peer users.</FONT> </P>
<P><A HREF="JavaScript:etWin('/e/t/applogic/Attribution?gxml=ReutersDisc.html', 'Attribution','','','','','','','','','')"><U></U><U><FONT COLOR="#0000FF" SIZE=2 FACE="ARIAL">(c) Copyright 2001 Reuters. Click Here for Limitations and Restrictions on Use.</FONT></U></A><FONT SIZE=2 FACE="ARIAL"></FONT>
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<P><FONT SIZE=2 FACE="Arial">Randy Kluver</FONT>
<BR><FONT SIZE=2 FACE="Arial">Information and Communication Management</FONT>
<BR><FONT SIZE=2 FACE="Arial">FASS 3, #04-16</FONT>
<BR><FONT SIZE=2 FACE="Arial">National University of Singapore</FONT>
<BR><FONT SIZE=2 FACE="Arial">Singapore, 117570</FONT>
<BR><FONT SIZE=2 FACE="Arial">(65) 874-8755, fax (65) 779-4911</FONT>
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