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Purchase, Pirate, Publicize: Private-network Music Sharing And Market Album Sales

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  • Jonathan Lee

Abstract

I quantify the effects of private-network music sharing on aggregate album sales in the BitTorrent era using a panel of US sales and private-network downloads for 2,109 albums during 2008. Exogenous shocks to the network's sharing constraints address the simultaneity problem. In theory, private-network activity could crowd out sales by building aggregate file sharing capacity or increase sales through word of mouth. I find evidence that private-network sharing results in decreased album sales for top-tier artists, though the economic impact is quite modest. However, private-network activity seems to help mid-tier artists. The results are consistent with claims that word of mouth is stronger for lesser-known artists and that digital sales are more vulnerable to increases in file sharing capacity. I discuss policy implications and alternatives to costly legal efforts to shut down private file sharing networks.

Suggested Citation

  • Jonathan Lee, 2018. "Purchase, Pirate, Publicize: Private-network Music Sharing And Market Album Sales," Working Paper 1354, Economics Department, Queen's University.
  • Handle: RePEc:qed:wpaper:1354
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    File URL: https://www.econ.queensu.ca/sites/econ.queensu.ca/files/qed_wp_1354.pdf
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    References listed on IDEAS

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    Cited by:

    1. Savelkoul, Ruben, 2020. "Superstars vs the long tail: How does music piracy affect digital song sales for different segments of the industry?," Information Economics and Policy, Elsevier, vol. 50(C).

    More about this item

    Keywords

    intellectual property; copyright; file sharing; piracy; digital music;

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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