Internet File Sharing: Chamber Weekly CEO/Business Leader Poll by COMPAS in the Financial Post for Publication September 22, 2003

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1 Internet File Sharing: Chamber Weekly CEO/Business Leader Poll by COMPAS in the Financial Post for Publication September 22, 2003 COMPAS Inc. Public Opinion and Customer Research

2 1.0 Introduction Canadian business leaders are of two minds when it comes to Internet music downloading. In light of the recent legal actions taken by large U.S. recording industry companies against individual users of Internet music file-sharing, COMPAS asked Canadian business leaders for their opinions about this illegal activity. At first glance respondents appear relatively ambivalent about this topic, as the distribution of responses appears fairly random. But upon closer analysis, two distinct segments emerge One group of respondents are of the mind that government should not become more involved in policing and preventing internet music theft, believing that such activity is a fixture of today s youth culture and is too prevalent to combat. In contrast, the other group of respondents are of the opinion that government should do more to protect the music industry from this sort of theft, and should do more to make Internet providers implement programs that would prevent music from being downloaded illegally. These are the key findings from the current web-survey of CEOs and other business leaders conducted by COMPAS on behalf of the National Post under sponsorship of the Canadian Chamber of Commerce. 2.0 Business Leaders Seem Somewhat Divided On Music Downloads On the surface, business leaders do not appear to have strong feelings towards the topic of illegal music downloads. Respondents were asked to rate on 5-point scales their agreement with a series of statements about downloading music. Average scores ranged from 2.9 to 3.2, as shown table 1, appearing to suggests that business leaders do not have strong opinions on the questions. In fact, closer analysis revealed two camps divided. On the one hand, there are those respondents who agree that the government should actively be implementing measures to protect the music industry from this sort of illegal activity. This group tends to have a unified view of government intervention insofar as they also believe (correlation.575) that government should do more to make Internet provider companies implement filter programs to prevent illegal file-sharing. Further evidence of their unified view stems from the fact that 88% of those who disagree (i.e. score 1) 1 that government should do more to protect the music business 1 Using a 5 point scale where 5 means strongly agree and 1, the opposite, to what extent do you agree with each of the following statements 1

3 from music theft also disagree (i.e. score 1) that the government should do more to make internet providers implement programs that would prevent music from being downloaded illegally (correlation -.402). Meanwhile, this group does not agree that illegal downloading is a non-combatable fixture of today s youth culture. On the other hand, there are those who agree that downloading music is indeed part of today s youth culture and too prevalent to combat and disagree that the government should get more involved. In fact, correlation analysis demonstrates that propensity to agree with increased government action declines with propensity to agree that downloading music is a part of today s youth culture (correlation -.423). In addition to believing that illegal downloading is a fixture of youth culture, this group of respondents blames the music industry for overpricing CDs (mean 3.1, correlation.323). Table 1: Q1. There s been some talk in the media about people illegally downloading music and the music industry launching lawsuits against these individuals. Using a 5 point scale where 5 means strongly agree and 1, the opposite, to what extent do you agree with each of the following statements [ROTATE] Government should do more to protect the music business from theft because stealing music does the same harm to business and the economy as stealing other products The music industry is largely to blame for the prevalence of illegal music downloading because music CD s are too expensive Government should do more to make companies that provide internet connectivity implement programs that would prevent music from being downloaded illegally Downloading music from the internet is a part of today s youth culture and is too prevalent to try to combat Mean DNK As some respondents said, The music industry has completely mismanaged the issue of new technologies. Similar to the movie industry that first sued to stop the 2

4 sale of VCR's, and the resulting legal decision in the 1970's in favour of Sony which created a huge market for in-home video - where the movie industry now makes a substantial portion of their revenues. New forms of music revenue would also be possible if the recording industry would stop trying to protect outdated sales systems and innovate in ways that don't take their customers for granted. I think the government could do more to inform people as to the reasoning behind intellectual property protection, including the differences between copyright, trademarks and patents. Many people do not understand what the law is or why it is so. Technology or other solutions than trying to regulate internet are in order... just because the internet allows faster more widespread copying than in olden days does not justify having government dabble in yet another area I would not be totally shocked to find that my 16 year old has 1 or 2 items on her lap top that are not in complete compliance with the Copyright Act. I will not accept any blame or moral responsibility when the industry has effectively left the doors open to abuse. Whether or not they are gouging (they likely are) is not sufficient justification - there are appropriate ways to deal with this including filing complaints and asking for political investigations. The key issue here is theft prevention; I have a responsibility to prevent my kid from stealing but they have a greater responsibility to protect their property - otherwise many will regard it as simply 'free'. The fast success of itunes Music Store is proof that many people are willing to pay a reasonable price for the convenience of downloading. Both the music companies and their artists can get paid and with CD production costs eliminated the consumer gets their music at an attractive price. I don't believe the industry or government should spend time chasing kids who are downloading music for personal listening. I can however justify prosecuting adults who are downloading and selling cheap copies in the black market. It does seem to be apparent today that the industry has dramatically driven up the cost of producing music to the point that many musicians can no longer afford to record their music and in fact make little or no money from sales of 3

5 cds, etc. The industry has to come to grips with this problem and make itself more accessible to both the artists and the buying public. 3.0 Methodology The National Post/COMPAS web-survey of CEOs and leaders of small, medium, and large corporations and among executives of the local and national Chambers of Commerce was conducted September 16 19th. Respondents constitute an essentially hand-picked panel. Because medium and small companies are more numerous in the economy and hence among Chamber membership, the actual respondents in this consultative panel are drawn more from these strata than from the stratum of the largest companies. Because of the small population of CEOs and business leaders from which the sample was drawn, the study can be considered more accurate than comparably sized general public studies. In studies of the general public, surveys 131are deemed accurate to within approximately 8.6 percentage points 19 times out of 20. The principal and coinvestigator on this study are Conrad Winn, Ph.D and Tamara Gottlieb. 4

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