File Sharing: Creative Destruction or Just Plain Destruction?
The sharing of sound recordings over the Internet is the newest controversy in a long-running battle between copyright owners and copying technologies. In order to provide some context, perspective, and background, this paper examines the short history of file sharing, the longer history of record sales, various explanations for the change in record sales, and some analysis of the economics of copying. Although file sharing has been imperfectly and inconsistently measured, it nevertheless appears to reveal a fairly close linkage between changes in file sharing and changes in record sales. Explanations, other than file sharing, for the recent decline in record sales seem to have little or no support. Because economic theories of the impacts of copying hold out little hope for a benign impact of file sharing, these results should not be surprising. These findings reinforce the econometric results from most of an expanding literature.
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