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Digital music consumption on the internet

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Abstract

The goal of this paper is to analyze the behaviour of digital music consumers on the Internet. Using clickstream data on a panel of more than 16,000 European consumers, we estimate the effects of illegal downloading and legal streaming on the legal purchases of digital music. Our results suggest that Internet users do not view illegal downloading as a substitute to legal digital music. Although positive and significant, our estimated elasticities are essentially zero: a 10% increase in clicks on illegal downloading websites leads to a 0.2% increase in clicks on legal purchases websites. Online music streaming services are found to have a somewhat larger (but still small) effect on the purchases of digital sound recordings, suggesting complementarities between these two modes of music consumption. According to our results, a 10% increase in clicks on legal streaming websites lead to up to a 0.7% increase in clicks on legal digital purchases websites. We find important cross country difference in these effects.

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File URL: http://ipts.jrc.ec.europa.eu/publications/pub.cfm?id=6084
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Bibliographic Info

Paper provided by Institute of Prospective Technological Studies, Joint Research Centre in its series JRC-IPTS Working Papers on Digital Economy with number 2013-04.

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Length: 39 pages
Date of creation: Feb 2013
Date of revision:
Publication status: Published
Handle: RePEc:ipt:decwpa:2013-04

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Keywords: Digital Music; Copyright; Downloading; Streaming; Piracy on the internet;

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Cited by:
  1. Markus Pasche, 2014. "Welfare Effects of Endogenous Copyright Enforcement - the Case of Digital Goods," Jena Economic Research Papers 2014-008, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.

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