Piracy on the Silver Screen
AbstractNew information technology has reduced marginal production and distribution costs of information goods to negligible levels and promises to revolutionize many industries. Unpaid copies of digital products can be as good as paid first-generation copies, and their availability can undermine the ability of sellers to cover first-copy costs. As a result, unpaid distribution has emerged as a major issue facing the music and movie industries in the past few years. Using survey data on movie consumption by about 500 University of Pennsylvania college students, we ask whether unpaid consumption of movies displaces paid consumption. Employing a variety of cross-sectional and longitudinal empirical approaches, we find large and statistically significant evidence of displacement. In what we view as the most appropriate empirical specifications, we find that unpaid first consumption reduces paid consumption by about 1 unit. Unpaid second consumption has a smaller effect, about 0.20 units. These estimates indicate that unpaid consumption, which makes up 5.2 percent of movie viewing in our sample, reduced paid consumption in our sample by 3.5 percent.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12010.
Date of creation: Feb 2006
Date of revision:
Publication status: published as Rob, Rafael and Joel Waldfogel. “Piracy on the Silver Screen.” Journal of Industrial Economics (Sept. 2007).
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Find related papers by JEL classification:
- L8 - Industrial Organization - - Industry Studies: Services
- K2 - Law and Economics - - Regulation and Business Law
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-02-26 (All new papers)
- NEP-CUL-2006-02-26 (Cultural Economics)
- NEP-LAW-2006-02-26 (Law & Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hui Kai-Lung & Png Ivan, 2003. "Piracy and the Legitimate Demand for Recorded Music," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 2(1), pages 1-24, September.
- Bakos, Yannis & Brynjolfsson, Erik & Lichtman, Douglas, 1999. "Shared Information Goods," Journal of Law and Economics, University of Chicago Press, vol. 42(1), pages 117-55, April.
- Oz Shy, 2011.
"A Short Survey of Network Economics,"
Review of Industrial Organization,
Springer, vol. 38(2), pages 119-149, March.
- Bacache-Beauvallet, Maya & Bourreau, Marc & Moreau, François, 2011. "Portrait des musiciens à l'heure du numérique," Opuscules du CEPREMAP, CEPREMAP, number 22, May.
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