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How much of the decline in sound recording sales is due to file-sharing?

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  • Stan Liebowitz

Abstract

Although most studies of file-sharing have concluded that file-sharing has decreased record sales, the extent of the decreased sales often seems uneven. This paper demonstrates that the results are more uniform than previously understood once a consistent metric is used to provide easy comparability across studies. This paper uses the percent of the decline in record sales that is due to file-sharing as a metric to translate the results of the literature into a common framework and then summarizes those results. What has not been previously noted is that the estimates from most studies imply that the impact of file-sharing was sufficient to have caused the entire decline in record sales that occurred from the advent of Napster up to about 2005. A smaller number of studies using post-2005 data indicate that the shift to digital formats may also have contributed to the sales decline that continued after 2005. Copyright Springer Science+Business Media New York 2016

Suggested Citation

  • Stan Liebowitz, 2016. "How much of the decline in sound recording sales is due to file-sharing?," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 40(1), pages 13-28, February.
    • Handle: RePEc:kap:jculte:v:40:y:2016:i:1:p:13-28
    DOI: 10.1007/s10824-014-9233-2
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    Citations

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    Cited by:

    1. Marc Ivaldi & Ambre Nicolle & Frank Verboven & Jiekai Zhang, 2024. "Displacement and complementarity in the recorded music industry: evidence from France," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 48(1), pages 43-94, March.
    2. Samuel Cameron, 2016. "Past, present and future: music economics at the crossroads," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 40(1), pages 1-12, February.
    3. Tobias Kretschmer & Christian Peukert, 2020. "Video Killed the Radio Star? Online Music Videos and Recorded Music Sales," Information Systems Research, INFORMS, vol. 31(3), pages 776-800, September.
    4. Mary J. Benner & Joel Waldfogel, 2016. "The Song Remains the Same? Technological Change and Positioning in the Recorded Music Industry," Strategy Science, INFORMS, vol. 1(3), pages 129-147, September.
    5. Wojciech Hardy, 2020. "Effects of piracy on the American comic book market and the role of digital formats," IBS Working Papers 01/2020, Instytut Badan Strukturalnych.
    6. Anna Kukla-Gryz & Joanna Tyrowicz & Michał Krawczyk, 2021. "Digital piracy and the perception of price fairness: evidence from a field experiment," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 45(1), pages 105-131, March.
    7. Stan J. Liebowitz, 2016. "Why the Oberholzer-Gee/Strumpf Article on File Sharing Is Not Credible," Econ Journal Watch, Econ Journal Watch, vol. 13(3), pages 373–396-3, September.
    8. Liebowitz, Stan J., 2017. "A replication of four quasi-experiments and three facts from "The effect of file sharing on record sales: an empirical analysis" (Journal of Political Economy, 2007)," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 11, pages 1-22.
    9. Wlömert, Nils & Papies, Dominik, 2019. "International heterogeneity in the associations of new business models and broadband Internet with music revenue and piracy," International Journal of Research in Marketing, Elsevier, vol. 36(3), pages 400-419.
    10. 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.
    11. 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.
    12. Rojas, Christian & Briceño, Arturo, 2019. "The effects of piracy on competition: Evidence from subscription TV," International Journal of Industrial Organization, Elsevier, vol. 63(C), pages 18-43.
    13. Tyrowicz, Joanna & Krawczyk, Michal & Hardy, Wojciech, 2020. "Friends or foes? A meta-analysis of the relationship between “online piracy” and the sales of cultural goods," Information Economics and Policy, Elsevier, vol. 53(C).
    14. Meg Elkins & Tim R. L. Fry, 2022. "Beyond the realm of cash: street performers and payments in the online world," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 46(2), pages 231-248, June.
    15. Hardy, Wojciech, 2021. "Displacement from piracy in the American comic book market," Information Economics and Policy, Elsevier, vol. 57(C).
    16. Joel Waldfogel, 2017. "How Digitization Has Created a Golden Age of Music, Movies, Books, and Television," Journal of Economic Perspectives, American Economic Association, vol. 31(3), pages 195-214, Summer.

    More about this item

    Keywords

    File-sharing; Piracy; Sound recordings; Music; iTunes; Napster; Z1; O3; L8;
    All these keywords.

    JEL classification:

    • Z1 - Other Special Topics - - Cultural Economics
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • L8 - Industrial Organization - - Industry Studies: Services

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