New research published by Tulane University Law Professor Glynn Lunney shows that online piracy is linked to the creation of more hit music. The increase in output can be attributed to existing artists, who make up for a decline in new hits from newcomers. This counter-intuitive finding suggests that file-sharing advances the core purpose of copyright, and that it should be permitted under copyright law.

Since the emergence of peer-to-peer file-sharing in 1999 music sales have dropped by more than half.

The RIAA and other industry players link these billion dollar losses to online piracy, claiming that more has to be done to protect their copyrights.

Interestingly, new research published by Glynn Lunney Jr., Professor of Law at Tulane University, suggests that the alleged file-sharing losses may actually be in line with the core intentions of copyright law.

Under the U.S. constitution Congress has the authority to enact copyright law “to Promote the Progress of Science.” Over the years courts have clarified that to do so, copyright law must “encourage the creation of new works” and “encourage the dissemination of existing works.”

It is clear that file-sharing encourages the distribution of existing music, and in a paper titled “A Case Study of File Sharing and Music Output” the professor examines what the connection is between music piracy and the creation of new music.

To this end, the research looks at the appearance of new and existing artists and tracks in the hit charts, to see whether there were any significant changes in the years after file-sharing hit the mainstream. The results of this analysis are quite surprising, to say the least.

The paper provides empirical evidence that file sharing did not reduce the creation of new hit songs. Instead, more new music entered the hit charts, an effect that’s driven by existing artists.

The data shows that the output from existing artists increased, while new artists appeared less frequently in the hit charts. However, since the new material from existing artists was greater than the loss from new artists, the “creation” of new music increased overall.

“Specifically, the [result] suggests that the 58.92 percent decline in record sales would be associated with a net increase of 20.6 new songs in the study’s sample annually, all else constant,” Professor Lunney writes.

The paper suggests that this increase in output may be directly related to the decline in revenue, and the researcher describes two effects of file-sharing that impacted creation of new music.

“First, it shifted output along the music-other margin and led to fewer new artists, as some individuals, given the lower returns available in music, decided to devote their time and creativity elsewhere,” Professor Lunney writes.

“Second, it shifted output along the work-leisure margin and led to more new music from existing artists, as the lower returns led existing artists to substitute work for leisure,” he adds.

Since the increased output by existing artists is greater than the decrease from new artists, the end result is an increase in new hits.

“Because the second marginal effect outweighed the first, file sharing, even assuming that it caused the decline in record sales, led to the creation, on balance, of more new hit songs.”

Keeping in mind that copyright intends to promote “the Progress of Science” by encouraging the distribution and creation of new works, Professor Lunney can only conclude that sharing music without permission of the owner should be legal under copyright law.

“Given that file sharing thus advances both of copyright’s purported objectives, there would seem to be only one reasonable answer as to whether file sharing, at least with respect to music, should be legal under copyright law,” Professor Lunney writes.

This leads to the counter-intuitive conclusion that the music industry’s claim that copyright law should be enforced to protect artists’ revenues to protect the creation of new music, falls flat.

“The proposition that file sharing reduces revenue and therefore must reduce creative output is both neat and plausible. Yet, as this study has shown, for music, it is also wrong,” Lunney concludes.

While the research sheds a new light on the connaction between music piracy and copyright, one has to doubt whether it’s a good thing to have “more of the same” as a result.