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Friday July 21 11:00 AM EDT Study: Napster users buy more music By Evan Hansen, CNET

People who use Napster and other file-swapping networks to trade MP3 files are more likely to boost their music spending than those who don’t use such services, according to a new study from Internet research firm Jupiter Communications. The study is the latest attempt to gauge the economic impact of file-swapping services such as Napster and, both of which stand accused of encouraging brazen Internet piracy and untold damages in lost CD and video sales.

Earlier research, released by Soundscan in May, showed declining CD sales at stores near universities, which some have taken as evidence that Napster has already cut into music industry revenues, despite sales growth of 8 percent last year. The Recording Industry Association of America (RIAA) submitted the Soundscan study as evidence of economic harm in its recent lawsuit against Napster.

Jupiter’s report concludes the opposite, finding that Napster usage is a leading indication of increased music spending compared with other factors including age, income and gender.

Jupiter said it surveyed more than 2,200 online music fans about whether the money they spent on music purchases had increased, decreased or remained the same since they began visiting music destinations on the Web. People between the ages of 18 to 24 who spend less than $20 on music within a three-month period indicated that they were likely to remain at a constant purchasing level despite online music use. All other groups said they had increased spending as a result of online music use, Jupiter reported.

“Because Napster users are music enthusiasts, it’s logical to believe that they are more likely to purchase now and increase their music spending in the future,” Jupiter analyst Aram Sinnreich said in a statement. Sinnreich said the report is a further indication that the music industry should embrace file-sharing technology rather than pursue lawsuits aimed at shutting down the companies behind it.

In an interview earlier this month, RIAA chief executive Hilary Rosen told CNET that the industry stands by the Soundscan report. But she also argued that unauthorized file swapping allowed by Napster is wrong whether or not it can be ultimately proven to cause economic harm.

“I don’t think it matters at all whether we’ve been economically hurt,” she said. “I think that if I own my shirt and you borrow it, it doesn’t matter whether or not I have another shirt. You’re just not entitled to borrow it without my permission. And if you have a copyright asset, that is the principle of copyright–that you get to control and own your own work, and other people don’t get to profit from it without your permission.”