NPD Confidential

Well, the Music Collections post certainly got around. Among other places, NBC News’ tech blog picked up the bit about P2P users being the biggest buyers of music and sought comment from the RIAA. The RIAA sent the reporter to NPD, the firm that handles their survey work. At NPD, Russ Crupnick offered the following response:

“We hear this argument all the time and it makes no sense,” Russ Crupnick, NPD’s senior vice president, industry analysis, said in a phone interview.

“Peer-to-peer users tend to be younger and more Internet-savvy, so the likelihood that would be buying digital files makes perfect sense. But you can’t compare that to the entire population,” he said. “Sixty percent of the population is over the age of 35, so you’re kind of comparing peer-to-peer users with Baby Boomers who buy much, much less music.”

Mr. Crupnick is right that P2P users shouldn’t be compared to the general population, which is why we didn’t do that. We compared them to the population that has music files: 50% of adults in the US and 42% in Germany.

It is also true that our labeling was a little ambiguous on this point and could have been read to suggest that the baseline was ‘all Internet users.’ I’m assuming that’s what Mr. Crupnick did.  I’ve adjusted the labeling to leave no room for misinterpretation in the future.  Here’s the chart again:

As to why he thinks this result is nonsensical, I couldn’t tell you. There’s nothing  implausible in the claim that heavy pirates are also the heaviest buyers.  He’s surely right that NPD hears this claim all the time, from such sources as the French enforcement organization, HADOPI,  the BBC, Industry Canada, a Dutch government funded study, some business school researchers in Norway, and by the way, the Canadian branch of the RIAA itself.  In my view this should be viewed as a baseline for the file sharing conversation–not a ‘counter-intuitive’ result.   And if NPD has data that suggests otherwise, perhaps they could share it.

Mr. Crupnick’s final comment suggests a different problem:

In a report last March, NPD said 13 percent of Internet users downloaded music from a P2P (peer-to-peer) site, which is down from a high of 19 percent in 2006, largely because of “industry efforts to combat illegal file sharing, and increased options for listening and downloading legally,” Crupnick said at that time.

Has P2P sharing gone down since 2006? Very possibly.  Our study puts it at 13% of Internet users, and probably lower if counting only current users. But P2P use is not a good indicator of total file sharing. For some, it has been supplanted by more and better legal services.  But it has also been complemented by less traceable forms of ‘unpaid’ use, via direct download and streaming services. The role played by existing enforcement in this dynamic is basically guesswork.  NPD knows this because it surveys on these questions regularly, but it doesn’t share its results in any detail. Fortunately, a Powerpoint presentation including part of their 2012 study did leak via Torrentfreak.  Here’s how NPD describes US Internet users collections (their highlights):

This does suggest that the quantity of P2P usage has fallen for the average Internet user–though why 6% of collections in a year with no significant change in consumer-directed enforcement is unclear.  It’s also unclear why Internet users should be the baseline for this chart, given that they include–as Mr. Crupnick indicates–a lot of older users who don’t buy (or have) much music.  But I am willing to cut some slack on labeling of baselines.  Total ‘unpaid’ contributions to collections, in any case, are pretty stable from year to year, and they find significantly more personal sharing than we do–which is interesting!  It’s too bad that they view such basic data on music habits as confidential.  From whom?

ps.  The story continues in NPD Confidential II: Die, Substitution Studies, Die .