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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.

Suggested Citation

  • Luis Aguiar & Bertin Martens, 2013. "Digital music consumption on the internet," JRC Working Papers on Digital Economy 2013-04, Joint Research Centre.
    • Handle: RePEc:ipt:decwpa:2013-04
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    File URL: https://publications.jrc.ec.europa.eu/repository/handle/JRC79605
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    Citations

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    Cited by:

    1. Stefan Bechtold & Catherine Tucker, 2014. "Trademarks, Triggers, and Online Search," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 11(4), pages 718-750, December.
    2. Wojciech Hardy & Michal Krawczyk & Joanna Tyrowicz, 2015. "Friends or foes? A meta-analysis of the link between "online piracy" and sales of cultural goods," Working Papers 2015-23, Faculty of Economic Sciences, University of Warsaw.
    3. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107069978.
    4. Joost Poort & Jarst Weda, 2015. "Elvis Is Returning to the Building: Understanding a Decline in Unauthorized File Sharing," Journal of Media Economics, Taylor & Francis Journals, vol. 28(2), pages 63-83, June.
    5. Luis Aguiar, 2015. "Let the Music Play? Free Streaming, Product Discovery, and Digital Music Consumption," JRC Working Papers on Digital Economy 2015-16, Joint Research Centre.
    6. Markus Pasche, 2014. "Welfare Effects of Endogenous Copyright Enforcement - the Case of Digital Goods," Jena Economics Research Papers 2014-008, Friedrich-Schiller-University Jena.
    7. BELLEFLAMME, Paul & PEITZ, Martin, 2014. "Digital piracy: an update," LIDAM Discussion Papers CORE 2014019, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    8. Steven James Watson & Daniel John Zizzo & Piers Fleming, 2015. "Determinants of Unlawful File Sharing: A Scoping Review," PLOS ONE, Public Library of Science, vol. 10(6), pages 1-23, June.
    9. Tatsuo Tanaka, 2019. "The Effects of Internet Book Piracy: Case of Comics," Keio-IES Discussion Paper Series 2019-016, Institute for Economics Studies, Keio University.
    10. Frosio, Giancarlo F., 2016. "Digital piracy debunked: a short note on digital threats and intermediary liability," Internet Policy Review: Journal on Internet Regulation, Alexander von Humboldt Institute for Internet and Society (HIIG), Berlin, vol. 5(1), pages 1-22.

    More about this item

    Keywords

    Digital Music; Copyright; Downloading; Streaming; Piracy on the internet;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • Z1 - Other Special Topics - - Cultural Economics

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