Online file-trading saves the day for the record companies

According to a new report most record company executives probably would rather have not been published, the download of music files online is actually benefiting the record companies, rather than being damaging to them and their sales.

Stereophile Magazine : The Downloading Myth

Several studies also suggest that in light of the deterioration of radio in the US, unauthorized online file trading may be one of the few promotional avenues that actually lead to authorized purchases. New research from Nielsen//NetRatings reinforces this idea, finding that for several key youth-oriented music genres, file traders purchase a higher percentage of music than other internet users.

The report shows that there is a significant increase in CD sales to consumers downloading music online.

According to their latest data, Nielsen//NetRatings estimates that online music swappers were 111% more likely to purchase rap music than the average Internet user over the past three months.

Dance and club music held the second spot, with downloaders 106% more likely to have purchased dance and club music than the average Internet surfer and 77% more likely to purchase alternative rock. R&B/soul music and rock rounded out the top five.

The Nielsen NetRating report is available online (PDF).

Adding to the evidence of peoples willingness to buy music both on- and offline is the success of the Apple iTunes Music store.

Maybe the record industry should calm down, and not make the same mistake Jack Valenti of the MPAA did when trying to ban the VCR. Quote:

“I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.”

Today the majority of the revenue for the movie industry comes from sale/rental of VCRs and DVDs…

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