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Pitfalls in Measuring the Impact of File-sharing on the Sound Recording Market

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  • Stan J. Liebowitz

Abstract

This paper surveys the extant literature on the impact of file-sharing on the recording industry. It begins by examining the theory behind the impact of file-sharing. One novelty from this analysis is the finding that the effect of ‘sampling’ of copyrighted materials can be expected to have a negative impact on copyright owners, quite the opposite of the impact normally assumed. Overall, although one can create hypothetical situations where network effects might allow file-sharing to be beneficial to copyright owners, the expectation that file-sharing would harm copyright owners appears a far more realistic outcome. The analysis then turns to the empirical work that has been performed up to the time this paper was written. The various approaches are critiqued and compared. I posit some explanations for the variations in results and conclude that the evidence strongly suggests that file-sharing harms the sound recording industry. (JEL K0, L0, L5, L8)

Suggested Citation

  • Stan J. Liebowitz, 2005. "Pitfalls in Measuring the Impact of File-sharing on the Sound Recording Market," CESifo Economic Studies, CESifo Group, vol. 51(2-3), pages 435-473.
    • Handle: RePEc:oup:cesifo:v:51:y:2005:i:2-3:p:435-473.
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    File URL: http://hdl.handle.net/10.1093/cesifo/51.2-3.435
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    Citations

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    Cited by:

    1. Hadida, Allègre L. & Paris, Thomas, 2014. "Managerial cognition and the value chain in the digital music industry," Technological Forecasting and Social Change, Elsevier, vol. 83(C), pages 84-97.
    2. Lee, Jonathan F., 2018. "Purchase, pirate, publicize: Private-network music sharing and market album sales," Information Economics and Policy, Elsevier, vol. 42(C), pages 35-55.
    3. Joëlle Farchy & Mathilde Gansemer & Jessica Petrou, 2013. "E-book and book publishing," Chapters, in: Ruth Towse & Christian Handke (ed.), Handbook on the Digital Creative Economy, chapter 31, pages 353-364, Edward Elgar Publishing.
    4. Stan J. Liebowitz & Richard Watt, 2006. "How To Best Ensure Remuneration For Creators In The Market For Music? Copyright And Its Alternatives," Journal of Economic Surveys, Wiley Blackwell, vol. 20(4), pages 513-545, September.
    5. Morris, Robert G. & Higgins, George E., 2010. "Criminological theory in the digital age: The case of social learning theory and digital piracy," Journal of Criminal Justice, Elsevier, vol. 38(4), pages 470-480, July.
    6. Staffan Albinsson, 2021. "Avoiding silent opera: the ‘grand’ performing right at work in nineteenth century Paris," European Journal of Law and Economics, Springer, vol. 51(1), pages 183-200, February.
    7. Cox, Joe & Collins, Alan & Drinkwater, Stephen, 2010. "Seeders, leechers and social norms: Evidence from the market for illicit digital downloading," Information Economics and Policy, Elsevier, vol. 22(4), pages 299-305, December.
    8. Peitz, Martin & Waelbroeck, Patrick, 2006. "Why the music industry may gain from free downloading -- The role of sampling," International Journal of Industrial Organization, Elsevier, vol. 24(5), pages 907-913, September.
    9. Carsten Fink & Keith E. Maskus & Yi Qian, 2016. "The Economic Effects of Counterfeiting and Piracy: A Review and Implications for Developing Countries," The World Bank Research Observer, World Bank, vol. 31(1), pages 1-28.
    10. Staffan Albinsson, 2013. "Swings and roundabouts: Swedish music copyrights 1980–2009," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 37(2), pages 175-184, May.

    More about this item

    JEL classification:

    • K0 - Law and Economics - - General
    • L0 - Industrial Organization - - General
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L8 - Industrial Organization - - Industry Studies: Services

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