Broadband: the Cause or the Effect?

The Australian Record Industry Association (ARIA) has reported a decline in Australian music sales (in both volume and value terms) and blames the downturn on the normal suspects (competition from interactive media such as DVDs, online piracy etc.). However it also places a share of the blame on the shoulders of increased broadband adoption. To do so is confusing the symptom for the cause. Jupiterís latest European music consumer survey report shows that there is also a direct correlation between file sharing, broadband penetration and per capita music spending in key European markets. However, this correlation does not imply music file sharing is a key driver of declining total music sales. Countries with already-low per capita music spending and high physical music piracy rates have the most widespread interest in file sharing. In turn, this interest becomes a key driver of broadband adoption. i.e. the per capita music spending levels were already significantly lower in markets such as Spain where broadband adoption and file sharing subsequently took off. In markets where there are already strong music piracy trends and low interest in paying for music, broadband adoption grows as it helps meet the inherent demand for file sharing. Broadband meets the demand, it doesnít create it. And the impact of broadband is likely to diminish.