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Bye, Bye, Miss American Pie? The Supply of New Recorded Music Since Napster

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  • Joel Waldfogel

Abstract

In the decade since Napster, file-sharing has undermined the protection that copyright affords recorded music, reducing recorded music sales. What matters for consumers, however, is not sellers' revenue but the surplus they derive from new music. The legal monopoly created by copyright is justified by its encouragement of the creation of new works, but there is little evidence on this relationship. The file-sharing era can be viewed as a large-scale experiment allowing us to check whether events since Napster have stemmed the flow of new works. We assemble a novel dataset on the number of high quality works released annually, since 1960, derived from retrospective critical assessments of music such best-of-the-decade lists. This allows a comparison of the quantity of new albums since Napster to 1) its pre-Napster level, 2) pre-Napster trends, and 3) a possible control, the volume of new songs since the iTunes Music Store's revitalization of the single. We find no evidence that changes since Napster have affected the quantity of new recorded music or artists coming to market. We reconcile stable quantities in the face of decreased demand with reduced costs of bringing works to market and a growing role of independent labels.

Suggested Citation

  • Joel Waldfogel, 2011. "Bye, Bye, Miss American Pie? The Supply of New Recorded Music Since Napster," NBER Working Papers 16882, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:16882
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    References listed on IDEAS

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    1. Rob, Rafael & Waldfogel, Joel, 2006. "Piracy on the High C's: Music Downloading, Sales Displacement, and Social Welfare in a Sample of College Students," Journal of Law and Economics, University of Chicago Press, vol. 49(1), pages 29-62, April.
    2. Boldrin,Michele & Levine,David K., 2010. "Against Intellectual Monopoly," Cambridge Books, Cambridge University Press, number 9780521127264.
    3. Mortimer, Julie Holland & Nosko, Chris & Sorensen, Alan, 2012. "Supply responses to digital distribution: Recorded music and live performances," Information Economics and Policy, Elsevier, vol. 24(1), pages 3-14.
    4. 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.
    5. Connolly, Marie & Krueger, Alan B., 2006. "Rockonomics: The Economics of Popular Music," Handbook of the Economics of Art and Culture, Elsevier.
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    Citations

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    Cited by:

    1. Joel Waldfogel, 2012. "Copyright Protection, Technological Change, and the Quality of New Products: Evidence from Recorded Music since Napster," Journal of Law and Economics, University of Chicago Press, vol. 55(4), pages 715-740.
    2. Brett Danaher & Michael D. Smith & Rahul Telang, 2014. "Piracy and Copyright Enforcement Mechanisms," Innovation Policy and the Economy, University of Chicago Press, vol. 14(1), pages 25-61.
    3. Stefano Comino & Fabio Maria Manenti, 2015. "Intellectual Property and Innovation in Information and Communication Technology (ICT)," JRC Working Papers JRC97541, Joint Research Centre (Seville site).
    4. Huotari, Pontus & Järvi, Kati & Kortelainen, Samuli & Huhtamäki, Jukka, 2017. "Winner does not take all: Selective attention and local bias in platform-based markets," Technological Forecasting and Social Change, Elsevier, vol. 114(C), pages 313-326.
    5. Victor Ginsburgh, 2013. "Mark Blaug and the economics of the arts," Chapters,in: Mark Blaug: Rebel with Many Causes, chapter 15, pages 208-224 Edward Elgar Publishing.
    6. Markus Pasche, 2014. "Welfare Effects of Endogenous Copyright Enforcement - the Case of Digital Goods," Jena Economic Research Papers 2014-008, Friedrich-Schiller-University Jena.
    7. Handke, Christian & Girard, Yann & Mattes, Anselm, 2015. "Fördert das Urheberrecht Innovation? Eine empirische Untersuchung," Studien zum deutschen Innovationssystem 16-2015, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    8. Christian Handke, 2013. "Empirical evidence on copyright," Chapters,in: Handbook on the Digital Creative Economy, chapter 22, pages 249-261 Edward Elgar Publishing.
    9. Kim, Jin-Hyuk & Prince, Jeffrey & Qiu, Calvin, 2014. "Indirect network effects and the quality dimension: A look at the gaming industry," International Journal of Industrial Organization, Elsevier, vol. 37(C), pages 99-108.
    10. R. Hiller, 2014. "Exclusive Dealing and Its Effects: The Impact of Large Music Festivals on Local Music Venues," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 45(2), pages 153-175, September.
    11. Gans, Joshua S., 2015. "“Selling Out” and the impact of music piracy on artist entry," Information Economics and Policy, Elsevier, vol. 32(C), pages 58-64.
    12. Susan Athey & Scott Stern, 2015. "The Nature and Incidence of Software Piracy: Evidence from Windows," NBER Chapters,in: Economic Analysis of the Digital Economy, pages 443-477 National Bureau of Economic Research, Inc.
    13. Dean Baker, 2016. "Working Paper: Rents and Inefficiency in the Patent and Copyright System: Is There a Better Route?," CEPR Reports and Issue Briefs 2016-12, Center for Economic and Policy Research (CEPR).
    14. Felix Oberholzer-Gee, 2011. "Copyright for the Digital Age - A Call for Legislative Reversibility," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 147(IV), pages 417-425, December.

    More about this item

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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