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Economists Examine File-Sharing and Music Sales

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  • Stan J. Liebowitz

    (University of Texas at Dallas)

Abstract

The decline in sales of music CDs and the recording industry’s attempts to reverse the decline have been much in the news over the last few years. Since this decline began at the same time that file-sharing became popular, and since file-sharing would be expected to lead to a decline in sales, file-sharing is the leading candidate among possible causes of this decline. At the center of the file-sharing debate is the empirical issue of whether or not file-sharing decreases sales. In this paper I examine the different empirical methodologies that have been chosen by economists studying this issue. The studies use different methodologies but nevertheless find, almost unanimously, that file- sharing has led to a serious decline in record sales, except for one highly publicized study that reaches very different, and in my opinion, highly implausible conclusions.

Suggested Citation

  • Stan J. Liebowitz, 2005. "Economists Examine File-Sharing and Music Sales," Industrial Organization 0505001, EconWPA.
  • Handle: RePEc:wpa:wuwpio:0505001
    Note: Type of Document - pdf; pages: 32. Forthcoming in 'The Industrial Organization of Digital Goods and Electronic Markets' edited by Peitz and Waelbroeck, MIT press, 2005.
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    File URL: http://econwpa.repec.org/eps/io/papers/0505/0505001.pdf
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    Citations

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    Cited by:

    1. Iacopo Grassi, 2007. "The Music Market in the Age of Download," Working Papers 2007.80, Fondazione Eni Enrico Mattei.
    2. Dongook Choi & Yeonbae Kim, 2010. "Effects of Piracy and Digital Rights Management on the Online Music Market in Korea," TEMEP Discussion Papers 201072, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Dec 2010.
    3. Stühmeier, Torben, 2011. "Das Leistungsschutzrecht für Presseverleger: Eine ordnungspolitische Analyse," DICE Ordnungspolitische Perspektiven 12, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    4. Ivan Png, 2006. "Copyright: A Plea for Empirical Research," Levine's Working Paper Archive 321307000000000484, David K. Levine.
    5. Joel Waldfogel, 2012. "Music Piracy and Its Effects on Demand, Supply, and Welfare," Innovation Policy and the Economy, University of Chicago Press, vol. 12(1), pages 91-110.
    6. Peitz, Martin & Waelbroeck, Patrick, 2006. "Piracy of digital products: A critical review of the theoretical literature," Information Economics and Policy, Elsevier, vol. 18(4), pages 449-476, November.
    7. Grazia Cecere & Nicoletta Corrocher & Fabio Scarica, 2012. "Why do pirates buy music online? An empirical analysis on a sample of college students," Economics Bulletin, AccessEcon, vol. 32(4), pages 2955-2968.

    More about this item

    Keywords

    mp3; filesharing; music; downloading; napster;

    JEL classification:

    • L - Industrial Organization

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