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Do Artists Benefit from Online Music Sharing?

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  • Ram D. Gopal

    (University of Connecticut)

  • G. Lawrence Sanders

    (State University of New York at Buffalo)

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    Abstract

    We present a model of online music sharing that incorporates economic and technological incentives to sample, purchase, and pirate. Contrary to conventional wisdom, we find that lowering the cost of sampling music will propel more consumers to purchase music online as the total cost of evaluation and acquisition decreases. Attempts to prevent sampling will be counterproductive in the long run. Sharing technologies erode the superstar phenomenon widely prevalent in the music business. Extensive empirical investigations, based on surveys and Billboard ranking charts, lend support to the economic model and validate the key results.

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    Bibliographic Info

    Article provided by University of Chicago Press in its journal Journal of Business.

    Volume (Year): 79 (2006)
    Issue (Month): 3 (May)
    Pages: 1503-1534

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    Handle: RePEc:ucp:jnlbus:v:79:y:2006:i:3:p:1503-1534

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    Web page: http://www.journals.uchicago.edu/JB/

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    Cited by:
    1. Ugo Pagallo & Massimo Durante, 2009. "Three Roads to P2P Systems and Their Impact on Business Practices and Ethics," Journal of Business Ethics, Springer, vol. 90(4), pages 551-564, December.
    2. Gordana Lalović & Saule Amirebayeva Reardon & Irena Vida & James Reardon, 2012. "Consumer decision model of intelectual property theft in emerging markets," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 3(1).
    3. Bellemare, Marc F. & Holmberg, Andrew M., 2010. "The Determinants of Music Piracy in a Sample of College Students," MPRA Paper 23641, University Library of Munich, Germany.
    4. Handke, Christian, 2012. "Digital copying and the supply of sound recordings," Information Economics and Policy, Elsevier, vol. 24(1), pages 15-29.
    5. Bacache-Beauvallet, Maya & Bourreau, Marc & Moreau, François, 2011. "Portrait des musiciens à l'heure du numérique," Opuscules du CEPREMAP, CEPREMAP, number 22, May.
    6. Nela Filimon & Jordi López-Sintas & Carlos Padrós-Reig, 2011. "A test of Rosen’s and Adler’s theories of superstars," Journal of Cultural Economics, Springer, vol. 35(2), pages 137-161, May.
    7. Christopher Klein & Shea Slonaker, 2010. "Chart Turnover and Sales in the Recorded Music Industry: 1990–2005," Review of Industrial Organization, Springer, vol. 36(4), pages 351-372, June.
    8. Kim, Jin-Hyuk, 2007. "Strategic Use of Copyright Protection to Deter Entry," MPRA Paper 51397, University Library of Munich, Germany.
    9. Takeyama, Lisa N., 2009. "Copyright enforcement and product quality signaling in markets for computer software," Information Economics and Policy, Elsevier, vol. 21(4), pages 291-296, November.
    10. Chia-chen Wang & Chin-ta Chen & Shu-chen Yang & Cheng-kiang Farn, 2009. "Pirate or Buy? The Moderating Effect of Idolatry," Journal of Business Ethics, Springer, vol. 90(1), pages 81-93, November.
    11. Cho, Won-Young & Ahn, Byong-Hun, 2010. "Versioning of information goods under the threat of piracy," Information Economics and Policy, Elsevier, vol. 22(4), pages 332-340, December.
    12. David Waterman & Sung Ji & Laura Rochet, 2007. "Enforcement and Control of Piracy, Copying, and Sharing in the Movie Industry," Review of Industrial Organization, Springer, vol. 30(4), pages 255-289, June.
    13. Eric Darmon & Alexandra Rufini & Dominique Torre, 2014. "Publisher's Announcements and Piracy-Monitoring Devices in Software Adoption," Working Papers halshs-00929792, HAL.
    14. Birgitte Andersen & Marion Frenz, 2010. "Don’t blame the P2P file-sharers: the impact of free music downloads on the purchase of music CDs in Canada," Journal of Evolutionary Economics, Springer, vol. 20(5), pages 715-740, October.
    15. Felix Oberholzer-Gee & Koleman Strumpf, 2010. "File Sharing and Copyright," NBER Chapters, in: Innovation Policy and the Economy, Volume 10, pages 19-55 National Bureau of Economic Research, Inc.
    16. Jonathan Dörr & Thomas Wagner & Alexander Benlian & Thomas Hess, 2013. "Music as a Service as an Alternative to Music Piracy?," Business & Information Systems Engineering, Springer, vol. 5(6), pages 383-396, December.
    17. Peitz, Martin & Waelbroeck, Patrick, 2006. "Piracy of digital products: A critical review of the theoretical literature," Information Economics and Policy, Elsevier, vol. 18(4), pages 449-476, November.

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