Researchers from Harvard Business School and the University of North Carolina published an academic paper in March 2004 stating that Internet music piracy has no negative effect on legitimate music sales. This claim directly contradicts the music industry's stance that the illegal downloading of music online is taking a big bite out of its bottom line. After tracking sales of 680 albums over the course of 17 weeks in the second half of 2002, the business researchers found out that heavily downloaded songs showed no measurable drop in sales.

Felix Oberholzer and Koleman Strumpf argued that ‘Downloads have an effect on sales which is statistically indistinguishable from zero, despite rather precise estimates. Moreover, these estimates are of moderate economic significance and are inconsistent with claims that file sharing is the primary reason for the recent decline in music sales.’

They also mentioned file sharing induced sales, whereby interested parties purchase records after sampling a free track, as a possible positive benefit of digital piracy.

To read the full paper (and digest some of their acrobatic math), visit http://www.unc.edu/~cigar/papers/FileSharing_March2004.pdf