Music Piracy: Bad for Record Sales but Good for the iPod?
AbstractMusic piracy is a double-edged sword for the music industry. On the one hand, it hurts record sales. On the other hand, it increases sales of its complements. To quantify the effect of music piracy, I construct a unique survey data set and use a Bayesian method to estimate the demand for music and iPods, and find three things. First, music piracy decreases music sales by 24% to 42%. Second, music piracy contributes 12% to iPod sales. Finally, counterfactual experiments show that Apple's revenue could increase by $36 per student if music were free.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 45772.
Date of creation: 2012
Date of revision:
demand estimation; iPod; music piracy;
Find related papers by JEL classification:
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
- L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-04-13 (All new papers)
- NEP-CUL-2013-04-13 (Cultural Economics)
- NEP-IPR-2013-04-13 (Intellectual Property Rights)
- NEP-IUE-2013-04-13 (Informal & Underground Economics)
- NEP-LAW-2013-04-13 (Law & Economics)
- NEP-MKT-2013-04-13 (Marketing)
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