Jupiter Communications Study Refutes RIAA's Claims

The Recording Industry Association of America's lawsuit against Napster may be an attack on one of its best friends, if results of a recent study by research organization Jupiter Communications can be believed.

Napster users are "45% more likely to have increased their music buying than non-users," according to the survey, which was released in mid-July. The RIAA is engaged in protracted litigation against San Mateo, California–based Napster, operator of a website with free software that allows users to share music over the Internet. The industry alliance claims that the proliferation of free music has caused a decline in CD sales, and thereby a loss of revenue. A similar lawsuit against music-uploading-and-archiving site MP3.com has been partially settled.

Several studies have been published supporting the music industry's claim, as have several supporting the opposite. A recent report by Yankelovich Partners found that two-thirds of those surveyed were motivated to buy music after hearing a song online. The Jupiter study—as most people interpret it—is the latest to weigh in on the side of Napster. According to Jupiter, many music fans want all the recordings of their favorite artists, both bootlegged and authorized; their use of a service like Napster only serves to fuel their enthusiasm. "Because Napster users are music enthusiasts, it's logical to believe that they are more likely to purchase now, and increase their music spending in the future," says Jupiter analyst Aram Sinnreich. If he is correct, Napster and other online music services are excellent marketing tools for the music industry.

Jupiter reached its conclusions after interviewing more than 2200 online music fans about their buying habits. With the exception of "cash-strapped, computer-savvy" 18-to-24-year-olds (ie, college students), most said that their music-buying habit increased as a result of using Napster. The student segment of those interviewed averaged less than $20 per person in commercial music purchases every three months.

In its lawsuits, the RIAA has introduced as evidence studies showing a direct relationship between the proliferation of online music and a decline in sales. Those studies are flawed, according to Sinnreich, because they look at sales figures only from traditional retailers, not from legitimate online retailers. The data cited don't measure the fact that online sales, not file-sharing services, have eaten into local music purchases. "The RIAA did not clarify that the most attrition took place before Napster's launch," said Sinnreich. "The analysis did not account for channel shift to online transactions that would have occurred independent of Napster's existence."