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The Music Market in the Age of Download

Author

Listed:
  • Iacopo Grassi

    (Università Federico II)

Abstract

Internet, mp3 files, peer-to-peer software and digital technologies for copying have radically modified the music sector. In this paper I present a theoretical model, that investigates the consequences of the appearance of a pirate low quality good (typically a mp3 file) in the music market. In this paper I propose a model of sampling, consider the possibility that the firm modifies its business entering into the low quality segment and investigate the supposed conflict between the recording company, whose profit depends on the CD sold, and the artist, whose profits depend in part on the live performance, the demand of which can increase for the positive externality due to the illegal download of music.

Suggested Citation

  • Iacopo Grassi, 2007. "The Music Market in the Age of Download," Working Papers 2007.80, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2007.80
    as

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    File URL: http://www.feem.it/userfiles/attach/Publication/NDL2007/NDL2007-080.pdf
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    References listed on IDEAS

    as
    1. Martin Peitz & Patrick Waelbroeck, 2004. "The Effect of Internet Piracy on CD Sales: Cross-Section Evidence," CESifo Working Paper Series 1122, CESifo Group Munich.
    2. Oz Shy & Jacques-Françlois Thisse, 1999. "A Strategic Approach to Software Protection," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 8(2), pages 163-190, June.
    3. Takeyama, Lisa N, 1994. "The Welfare Implications of Unauthorized Reproduction of Intellectual Property in the Presence of Demand Network Externalities," Journal of Industrial Economics, Wiley Blackwell, vol. 42(2), pages 155-166, June.
    4. Peitz, Martin & Waelbroeck, Patrick, 2006. "Why the music industry may gain from free downloading -- The role of sampling," International Journal of Industrial Organization, Elsevier, vol. 24(5), pages 907-913, September.
    5. Liebowitz, S J, 1985. "Copying and Indirect Appropriability: Photocopying of Journals," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 945-957, October.
    6. Stan J. Liebowitz, 2005. "Economists Examine File-Sharing and Music Sales," Industrial Organization 0505001, University Library of Munich, Germany.
    7. Amit Gayer & Oz Shy, 2005. "Copyright Enforcement in the Digital Era," CESifo Economic Studies, CESifo, vol. 51(2-3), pages 477-489.
    8. Banerjee, Dyuti S., 2003. "Software piracy: a strategic analysis and policy instruments," International Journal of Industrial Organization, Elsevier, vol. 21(1), pages 97-127, January.
    9. Besen, Stanley M & Kirby, Sheila Nataraj, 1989. "Private Copying, Appropriability, and Optimal Copying Royalties," Journal of Law and Economics, University of Chicago Press, vol. 32(2), pages 255-280, October.
    10. Gayer, Amit & Shy, Oz, 2003. "Internet and peer-to-peer distributions in markets for digital products," Economics Letters, Elsevier, vol. 81(2), pages 197-203, November.
    11. Banerjee, Dyuti S., 2006. "Lobbying and commercial software piracy," European Journal of Political Economy, Elsevier, vol. 22(1), pages 139-155, March.
    12. Liebowitz, Stan J, 2006. "File Sharing: Creative Destruction or Just Plain Destruction?," Journal of Law and Economics, University of Chicago Press, vol. 49(1), pages 1-28, April.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    File-sharing; Copyright; Sample Effect; Mp3; Concert;

    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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