A study by Robert Hammond, assistant professor at North Carolina State University, shows that file sharing of an album prior to its release actually benefits sales.
The study was conducted on a sample of 1,095 albums from 1,075 artists from May 2010 to January 2011.
Hammond collected download statistics on new albums released on the largest BitTorrent tracker dedicated to music and compared this data with sales numbers.
“I isolate the causal effect of file sharing of an album on its sales by exploiting exogenous variation in how widely available the album was prior to its official release date,” Hammond explains in his paper. “The findings suggest that file sharing of an album benefits its sales. I don’t find any evidence of a negative effect in any specification, using any instrument.”
“However, according to the research, sales may actually be hurt by going after these sites,” reports TorrentFreak. “Hammond’s findings suggest that piracy itself acts as a form of advertising similar to radio play and media campaigns, where more downloads result in a moderate increase in sales.”
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