The New York Times

January 5, 2004
NEW ECONOMY

In Survey, Fewer Are Sharing Files (or Admitting It)

By JOHN SCHWARTZ

How easily do online file swappers scare? Pretty darned easily, a new survey suggests.

The number of people swapping music files online has dropped by half, and the number of people downloading files on any given day has dropped 75 percent since the middle of last year, according to a report to be released today by the Pew Internet and American Life Project. Last September is when the Recording Industry Association of America started suing people accused of making large numbers of songs available for downloading.

"Clearly, the R.I.A.A. suits were a watershed moment for the downloading community," the director of the Pew Internet project, Lee Rainie, said, referring to the lawsuits by the recording association.

In a previous survey of 1,358 Internet users, conducted from March 1 to May 20, 29 percent said they had downloaded music. The percentage dropped to 14 percent when the question was asked again from Nov. 18 to Dec. 14, after hundreds of people had been sued by the recording industry over accusations of copyright infringement.

In the survey period last spring, 4 percent of the Internet users said they had downloaded files on an average day. Only 1 percent of Internet users in the later survey said they had downloaded files on any given day during the survey period. And about one in five of those who said that they still shared music and other files said that they were doing less of it because of the industry lawsuits.

Past surveys showed that many people did not fully understand that they were infringing on the copyright of others by downloading free music, Mr. Rainie said. Despite the abuse heaped on the industry for its tactics, he added, that message appears to have gotten through.

Before the lawsuits, interviewers were often told, " 'We think what we're doing isn't a violation, because we're just sharing,' " Mr. Rainie said. Now, he said, "significant numbers of people are thinking differently about it, in part because of the R.I.A.A. message," even if the lawsuits were "not a high-water mark for the reputation of the recording industry."

The result is a change in behavior, though not necessarily in attitude. "It's not like people are happily embracing this message,'' he said, "but there are consequences now to what they are doing."

Mr. Rainie said that the steep drop represented a sharp turnaround among Internet users. "I'm trying to think of any significant Internet activity that was popular, and on an upswing, and saw a decline of this level," he said.

A representative of the recording industry hailed the news from Pew. "This is another data point that tells us that the lawsuits have had an impact," said Mitch Bainwol, the chairman and chief executive of the recording association. He called the new figures "encouraging" and said that, along with other measures that his group tracks internally, "it tells us that we're on the right track, and ought to continue with the lawsuits."

The industry was dealt a setback last month when a federal court ruled that it could not use a special fast-track process to force Internet service providers to unmask file traders so that they could be sued. But Mr. Bainwol said that the industry would continue to "vigorously defend our rights" through lawsuits, even if the legal procedure they have to follow to initiate the suits is more cumbersome and expensive.

The new study comes as other measures of consumer activity suggest that the industry's slide of the last several years might be slowing. Year-end figures released last week by Nielsen SoundScan showed that fourth-quarter sales of compact discs were up 5.6 percent over the same quarter a year earlier, and that CD sales for 2003 were down 2 percent from 2002. The overall music business, which includes sales of 19.2 million digital tracks since the end of June, was down 0.8 percent compared with sales from the previous year, Nielsen said.

While other evidence also points to a sharp drop in online music swapping among Americans, some experts on the downloading world said that the Pew figures might overstate the drop in file sharing. For one thing, respondents to surveys could be more reluctant, in light of the lawsuits, to admit to engaging in an activity that could get them into legal trouble.

"I think it's not unreasonable to believe that most folks have at least heard of the R.I.A.A. lawsuits and probably figure that telling a stranger on the phone about their downloading isn't a very good idea," said Cindy Cohn, the legal director for the Electronic Frontier Foundation, a civil liberties group that has fought the industry. At the same time, some people may have gone to greater effort to mask their online activities, including going to alternatives for trading music that are harder to track, including so-called darknets, file-sharing networks with restricted membership.

Rob Glaser, the chief executive of RealNetworks, which makes software that plays music and video, said that he suspected that an unwillingness to admit to downloading could be skewing the Pew results, and that the survey went farther than other data he had seen. Moreover, core Internet users, like college students, have not changed much, he said. "The mind-set on college campuses,'' he said, "is still, 'Whatever.' ''

If anything, use of file sharing is still on the rise, said Eric Garland, the chief executive BigChampagne, an online media measurement company. "We have empirical evidence that the use of popular file-sharing services like Kazaa, both in terms of the number of users and in terms of the volume of material, is up, and up dramatically" over the time measured in the study, he said.

Even though some bias could be creeping into the survey because of the legal problems with downloading, Mr. Rainie said, the report provides clear evidence of a significant change in behavior.

"My guess is that a portion of our respondents are no longer fessing up downloading," he said. "But that can't account for the full dropoff in the downloader population."

While services like Kazaa claim that file sharing on their networks continues to rise, those increases probably reflect global usage and not what is going on within the United States, he said.

The Pew results are supported by new figures from a consumer monitoring firm, comScore Media Metrix, which were released along with the Pew report. The comScore data showed a significant drop in the number of computers in the United States running four of the most popular peer-to-peer file sharing programs compared with levels a year ago. Use of Kazaa, the largest program, fell 15 percent, while WinMX fell 25 percent; BearShare, 9 percent; and Grokster, 59 percent.

To Ms. Cohn of the Electronic Frontier Foundation, the lawsuits may have helped the industry address the problem of downloading, but they cannot fix a broader issue: giving people the music that they actually want to buy. "Who will the labels blame next if file sharing actually has gone down,'' she asked, "but they still haven't seen a corresponding bump in their revenues?"


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