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Wednesday, January 28, 2004

And the Survey Says...
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According to Tuesday's Wall Street Journal, Harris Interactive just released a poll finding that three-quarters of adult Americans believe downloading music from the Internet and reselling it is wrong, but that downloading for personal use in "an innocent act." Interpretation of this finding is clouded by Harris Interactive's decision to ask a single question combining both of these issues. It is not clear whether the results are mainly attributable to the agreement that downloading and reselling is wrong or agreement that downloading for personal use is OK. (In addition, the survey did not distinguish between unauthorized P2P downloads and downloads from the rapidly growing authorized online music services.)

Further complicating interpretation is the fact that nearly two-thirds (64 percent) agreed that "musicians and recording companies should get the full financial benefit of their work." How companies and artists could be expected to obtain full value if free music downloading is permitted was not covered in the survey.

Since many Americans engage in P2P downloading for personal use, it is not surprising that they would like to think the activity is innocent. The price is right. But if unauthorized P2P transfers are treated as innocent, many consumers will opt for free content, free-riding on the increasingly small number of paying customers who foot the bill for content creation. The availability of high quality content will suffer. Consumers as a group will be better off under a regime that protects rights in content and thereby promotes the development of legitimate markets in digital content. (For more on market approachs, see the recent study by Professor Robert Merges.)

posted by @ 12:52 PM | General

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