Ever since Napster changed the state of the music industry back in 1999, many (including myself) have strongly suspected that there is a positive correlation between peer-to-peer downloading and CD purchasing. The Canadian Recording Industry Association (CRIA), our Canadian equivalent of the notorious Recording Industry Association of America (RIAA), has always vehemently denied this.

A brand new study commissioned by Industry Canada, contains some of the most extensive surveying to date of the Canadian population on music purchasing habits. The study is titled The Impact of Music Downloads and P2P File-Sharing on the Purchase of Music: A Study For Industry Canada, and is a collaboration by two professors from the University of London, Industry Canada, and Decima Research, who surveyed over 2,000 Canadians on their music downloading and purchasing habits. The authors believe this is the first ever empirical study of its kind.

The two key findings of the study appear contradictory at first, but must be looked at separately as two distinct groups:

In assessing the P2P downloading population, there was "a strong positive relationship between P2P file sharing and CD purchasing. That is, among Canadians actually engaged in it, P2P file sharing increases CD purchases." The study estimates that one additional P2P download per month increases music purchasing by 0.44 CDs per year.

In assessing the entire Canadian population, there is no direct relationship between P2P file sharing and CD purchases in Canada. According to the study authors, "the analysis of the entire Canadian population does not uncover either a positive or negative relationship between the number of files downloaded from P2P networks and CDs purchased. That is, we find no direct evidence to suggest that the net effect of P2P file sharing on CD purchasing is either positive or negative for Canada as a whole."

The study is a pretty tough read for those of us who aren’t economics majors. Still, it is very important because it concludes that the music industry has clearly benefited from P2P, and that there is no "emergency" that necessitates legislative intervention.

I’ve written about the dangers about P2P before, and if you’re using Limewire, I strongly suggest you remove it from your system as soon as you finish reading this. So why would I be writing about a study that is in some way vindicating the illicit downloading of music? The reason is that Limewire is not the proper way to go about getting your “free” fix of music. How one would accomplish this in a secure manner, without worrying about compromising the integrity of their computer, is beyond the scope of this article. If you have a tech-savvy friend in the know, ask them about torrents and go from there. From this point on, when I refer to P2P or file sharing, I am not referring to programs like Limewire or Kazaa.

I'm not surprised at all by the study’s findings. I know many people who use P2P frequently, and I’d have to say that most of them actually spend more money on CDs now than they had before downloading music. It's pretty much the best way to "preview" an artist's work. If one likes it, it is easily justifiable to purchase the CD, both to support the artist and add to the ol’ CD collection. Music lovers, much like myself, find that having a mere digital copy is inadequate. The sound quality of most downloads, including those on legal download sites like iTunes, is nowhere near the same as that which can be found on a purchased CD. But without P2P, how are we to know what is out there?

P2P could and should be a powerful tool that the CRIA (not to mention the evil RIAA and even more evil MPAA) should embrace, and work with (not against). Potential profits could be huge. Steps in the right direction are being taken by industry revolutionaries such as Radiohead and Rick Rubin to change the way the music industry operates, and hopefully soon the music industry will find its way back from the terrible down-slide it has been facing since file sharing began. File sharing is not the end of the music industry it is part of its future.