Peer to Peer is Good for the Economy

File Sharing, using bit torrent or Limewire for example, has been given a bad name and is associated with hacking and criminal intention. But file sharing isn’t all that bad. In fact it might help the economy.

According to a press article, Microsoft Chairman Bill Gates said “Music is about discovery. You should be able to have a conversation about the music you like. Tell somebody you disagree with what they like. Find things serendipitously.” The Microsoft Zune player encourages music sharing by having the ability to discover music with other Zune players. But, isn’t that what we are doing on a global scale? This type of discovery increases artist’s fan base. True fans are not satisfied with just listening to their favorite artist’s music. They want to own the original album art, go to live concerts, and buy merchandise; all which compensate the artist. So by increasing fan base you increase artist revenue.

What about software? With each generation we become more savvy and fluent with computer technology. It should be no surprise that file sharing nourishes this ability. Budding artists which cant afford Photoshop or Flash, get a copy from a friend so they can become familiar with the program and increase their abilities. The exposure the new generation has to programs like Excel and Adobe Premier creates a talented workforce before they even enter the job market, thus reducing the learning curve and increasing efficiencies. This also increases the software company’s user base, which in turn increases the software’s popularity and the software’s dominance in the market. Again leading to more sales and revenue

As the younger generation “grows up” and becomes a responsible member of society, they will tend to legally purchase software and music. Kevin Rose, founder of Digg, has publicly addresses on his show, Diggnation, that his company is legitimately purchasing software and that he himself is legitimately purchasing music. Many people like Kevin have exhibited this behavior. Perhaps this behavior out of guilt from prior immoral activities or perhaps since they have more to lose if any authority was to come after them? Either way, the music and software industries are winning more than losing.

These companies don’t actually lose any money from making a copy of a file. It’s not like you stole a computer out of their inventory that they can never get back again. What the companies usually complain about is the opportunity cost or the money they could have made if the software or music was purchased. What the companies don’t realize is if people are sharing their music or software it’s probable because it’s popular or good and they should just focus on making it better and people will buy more.

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