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Music piracy: A case of “The Rich Get Richer and the Poor Get Poorer”

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  • Piolatto, Amedeo
  • Schuett, Florian

Abstract

There is evidence that music piracy has differential effects on artists depending on their popularity. We present a model of music piracy with endogenous copying costs: consumers’ costs of illegal downloads increase with the scarcity of a recording and are therefore negatively related to the number of originals sold. Allowing for a second source of revenues apart from record sales, we show that piracy can hurt some artists while benefiting others. Under plausible assumptions, piracy is beneficial to the most popular artists. However, this does not carry over to less popular artists, who are often harmed by piracy. We conclude that piracy tends to reduce musical variety.

Suggested Citation

  • Piolatto, Amedeo & Schuett, Florian, 2012. "Music piracy: A case of “The Rich Get Richer and the Poor Get Poorer”," Information Economics and Policy, Elsevier, vol. 24(1), pages 30-39.
    • Handle: RePEc:eee:iepoli:v:24:y:2012:i:1:p:30-39
    DOI: 10.1016/j.infoecopol.2012.01.002
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    Cited by:

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    2. Christensen, Finn, 2022. "Streaming Stimulates the Live Concert Industry: Evidence from YouTube," International Journal of Industrial Organization, Elsevier, vol. 85(C).
    3. Éric Darmon & Thomas Le Texier, 2014. "Private or Public Law Enforcement? The Case of Digital Piracy Policies with Non-monitored Illegal Behaviors," Economics Working Paper Archive (University of Rennes & University of Caen) 201403, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    4. Inceoglu, Firat, 2015. "Copyright protection and entry deterrence," Information Economics and Policy, Elsevier, vol. 32(C), pages 38-45.
    5. Shinichi Yamaguchi & Hirohide Sakaguchi & Kotaro Iyanaga & Hidetaka Oshima & Tatsuo Tanaka, 2023. "The impact of licensed and unlicensed free goods: an empirical analysis of music, video, and book industries in Japan," SN Business & Economics, Springer, vol. 3(3), pages 1-22, March.

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    More about this item

    Keywords

    L82; K42; Piracy; File sharing; BitTorrent; Endogenous download costs;
    All these keywords.

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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