Thesis explores fee-based music downloads

In a survey of Princeton students conducted by Yashih Wu '03 earlier this year, just under half of respondents said they would be willing to pay for a music downloading service instead of using a free service.

However, Wu said student attitudes would probably change following the recent lawsuit filed by the Recording Industry Association of America against four college students, including Dan Peng '05, for copyright infringement. The RIAA sued Peng for what could be tens of millions of dollars, alleging that he illegally made copyrighted music available for download from his computer and facilitated the transfer of copyrighted music over the network through his website, wake.princeton.edu.

For her senior thesis in the economics department, Wu studied student behavior and attitudes toward music downloading.

Based on survey results, Wu suggested changes to pricing plans for commercial online music services, which have not yet been popular among college students.

Wu conducted a web survey in February and March to examine student attitudes regarding music downloading. The survey had 679 respondents, of which 86.6 percent were undergraduates and 13.4 percent were graduate students, she said.

Sixty-five percent of respondents reported that they download music for free using file-sharing services such as KaZaa, she said. Wu pointed out that this number includes students who download authorized music.

Nearly 12 percent of respondents said they did not know about these services or did not know how to use them, and nearly 23 percent said they choose not to use the services though they know how they work, she said.

Most respondents said they were unwilling to use services that charge per-song fees, but 46.2 percent of those interviewed said they would pay for a service if they could get "equal or better service through a legitimate online source at a small price," she said.

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Just more than 3 percent of respondents said they currently subscribe to commercial online music services, she said.

Wu said students found that most of the commercial services offered were not satisfactory.

She said there are problems with the pricing models used by the recording industry. Most commercial online services currently use a "two-part tariff" system, with a monthly subscription fee in addition to per-download charges, she said.

Studies involving other industries have shown that most people choose flat-rate subscription plans over per-unit pricing plans, Wu said.

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If commercial music downloading services change their business plans and offer a greater breadth of services using flat-rate subscription fees, they will be more successful, she said.

"I think people know that they're supposed to pay for their music and it's something that they'll eventually do," she said.

Wu said another problem for commercial online services is that people don't know they exist.

The music industry currently has a bad image among students, Wu added. The recording industry's longterm campaign against online piracy seems to have indirectly made the problem worse by making more people aware of illegal downloading services, she added.

The music industry should focus much more of its efforts on fighting organized piracy, such as compact disc burning for street sale, Wu said. This type of piracy is much more damaging financially to the industry than online piracy, she said.