Business Matters: If Big Radio Had Pandora's Royalty Rate, It Would Owe Billions
Business Matters: If Big Radio Had Pandora's Royalty Rate, It Would Owe Billions

A preview of an upcoming study by the American Assembly at Columbia University aims to highlight a generational divide in attitudes toward sharing music -- but ends up showing much more.

You can view the study's findings through one of three lenses:

1. 1. The "Observance of Generational Differences" Lens,
2. The "File Sharers Buy More Music Than Non-File Sharers" Lens, or
3. The "Did Anybody Else Notice That Young Consumers Buy More Music Than Older Consumers?" Lens.

With an aim toward shaping public policy, the American Assembly has noted generational differences in attitudes toward file sharing. The average person in the 18-to-29-year-old age group had 813 files that were downloaded for free and copied from friends or family. That was more than double the 298 copied or traded files of the average 30 to 49-year-old. In each age group, about the same number were copied as downloaded for free.

Here's where the public policy comes in. The post argues the prevalence in copying has greater implications because "current internet-based enforcement proposals, whether directed against P2P users or cyberlocker sites, do nothing to deter such copying-in fact they're likely to increase it as people shift toward less exposed forms of exchange."

On a side note, the American Assembly calls itself non-partisan and that may be the case, but it's worth pointing out that Google, which is hardly non-partisan on matters of copyright, helped fund its report titled "Media Piracy in Emerging Economies" that was well received in some circles.

A few blogs picked up on the report's tired theme that P2P users buy more music than non-P2P users. This has been seen in many surveys over the years. As if to ridicule anti-piracy laws that punish good customers, some writers continue to point this kind of thing out when it resurfaces. These same people tend to ignore the academic studies that have concluded that file sharing leads to fewer purchases, but that's another topic for another day.

The theme has resurfaced in the American Assembly study. In the U.S., according to the study, P2P users have a roughly 37% larger collection than non-P2P users. Some, but not all, of that larger collection is the result of 30% more legal purchases than non-P2P users. What this means - and this also is not a new development - is that people who are prone to pirate music in the first place are also more prone to buy music. In other words, people who like music like music.

The third lens focuses on a really fascinating part of the study that was easily overlooked because it bucks conventional wisdom. But it's right in the open: consumers from ages 18 to 29 have more legally purchased digital files in their music collection than any other age group. Specifically, this age group has an average of 699 bought digital music files in a collection that averages 1,867 music files.

The 30-to-49-year-old age group has an average of 683 purchased files. The 50-to-64-year-old age group has an average of 408 purchased files. The 65-and-over age group has an average of 348 purchased files.

This should sound a bit familiar. The Nielsen Music 360 report released in August said 36% of teens have bought a CD in the last year and 51% of teens have purchased a music download in the last year. Kids are still buying music, even though people seemed to have written them off to piracy years ago.

But teens - as well as people of other age groups - also get music through file-sharing services and casual trading. Just over 44% of all files in average 18-to-29-year-old person's collection was either downloaded for free (perhaps with consent from the owner) or copied from a friend or family member. Another 18.5% of the collection was ripped, although the post's author does not specify if the source CD was purchased or was borrowed from a friend.

In any case, a large portion of an average young person's music collection is being acquired through copying and downloading. That's the illegal activity that companies like Spotify and YouTube want to turn into money for rights holders. That same Nielsen study, by the way, also found that YouTube has become teens' most important source of music discovery.

Record labels may find some comfort in an item at the bottom of the post. The American Assembly reveals 29% of U.S. respondents under 30 listen to "most or all" of music on streaming services and 11% of them have paid subscriptions, up from 7% in August 2011. In other words, the study suggests a large number of young music consumers are getting their music only through legal streaming sources - and a good chunk are paying for it.