Did File-sharing Cause the Recording Industry Collapse? Economists say “No.”

A must read article for all serious music industry professionals.

“For the last decade, the movie and music industries have engaged in a relentless struggle against Internet file sharing. One prominent theater of this global conflict has been the UK, which last year saw the passage of the Digital Economy Act. The law, if fully implemented, could allow Internet Service Providers to disconnect “persistent infringers” of the UK’s copyright rules from the ‘Net.

The zeal with which Hollywood and the recording industry have pursued this ISP-as-cop approach around the world has prompted some ISPs to cry foul. “The notion of disconnection without judicial oversight violates the presumption of innocence,” warned the Australian DSL service iiNet in a recent position piece . “As the penalty for possibly minor economic loss (at the individual infringer level) removal of Internet access is, therefore, both inappropriate and disproportionate.”

But even though the DEA is up for judicial review at the behest of the UK’s top telcos, the impetus for similar laws continues unabated. That’s because the content industry may lose a particular battle (eg, trying to force iiNet to punish file swappers), but it has won a key aspect of the war: the argument that file sharing has hobbled the music and movie business, hurt artists, and cost jobs is the master narrative of file sharing—the center of most government debates about the practice.

Now comes a paper from the London School of Economics that tries to do more than just challenge the DEA. It argues that everything Big Content says about file sharing is wrong. In fact, it suggests that file sharing is the future, and that revenue downturns can largely be explained by other forces. . .” Artstechnica.com has the full story.

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