The Effects of Pirated Music on Individual Musicians

What kind of effect does pirated music have on musicians? Illegal music file sharing has become a huge problem over the last 15 years for the music industry. While it claims to have lost billions of dollars because of the problem, it is unclear what kind of effects piracy has on an individual musician

MySpace Killed the Radio Star? The Impact of Online Sampling on Song Sales

The recent emergence of online feedback and sampling mechanisms has created new avenues where consumers can learn about information goods such as books, music, and movies. An increasing number of studies evaluate the impact of these technological innovations on purchasing behavior. These studies often face estimation issues such as unobserved heterogeneity and simultaneity. This paper reviews the strategies commonly implemented to address various sources of endogeneity and proposes the use of a difference- and system-Generalized Method of Moments (GMM) estimator. The paper also stresses the need to consider the pattern of sales over time. As an empirical example, we explore the relationship between individual track sales and sampling of songs on the radio and MySpace. Our results suggest that while radio exposure continues to be an important predictor of song sales, online sampling of songs has a nearly equivalent effect on sales

Piracy, Music and Movies: A Natural Experiment

This paper investigates the effects of illegal file sharing (piracy) on music and movie sales. The Swedish implementation of the European Union directive IPRED on April 1, 2009 suddenly increased the risk of being caught and prosecuted for file sharing. We investigate the subsequent drop in piracy as approximated by the drop in Swedish Internet traffic and the effects on music and movie sales in Sweden. We find that the reform decreased Internet traffic by 18 percent during the subsequent six months. It also increased sales of physical music by 27 percent and digital music by 48 percent. Furthermore, it had no significant effects on the sales of theater tickets or DVD movies. The results indicate that pirated music is a strong substitute for legal music whereas the substitutability is less for movies.Copyright protection; Piracy; File sharing; Music; Movies; IPRED; Natural experiment

Using Data in Decision-Making: Analysis from the Music Industry

Copyright © 2014 John Wiley & Sons, Ltd Internet use provides an increasing amount of data that has potential value for managers and policy makers but, without a precise understanding of the meaning of data, erroneous conclusions may be drawn which could adversely affect future decisions made by managers

Copyright and creation: Repositioning the argument

Purpose: This paper highlights the challenges and key arguments for digital copyright protection legislation for creative industries. Design/methodology/approach: This briefing is prepared by independent academics who place the arguments in context based upon literature and market data. Findings: Many of the arguments used against copyright protection laws draw upon flawed analysis. Artistic creators should be treated fairly and their work should be afforded the same protection as other property. Practical implications: Digital legislation warrants review, but not for the frequently cited reasons of "stifling innovation" or "restriction" of others using the work. Rather, artists need better protection for their work and fairer treatment with regards their property rights. Originality/value: The paper provides context and practical insights into the data used to influence policy decision makers, providing a stronger case for legislative review. © Emerald Group Publishing Limited

Firm profitability during the servitization process in the music industry

The music industry, as with other creative industries, has suffered a dramatic decrease in performance due to the digital disruption.While previous literature uses revenues as a proxy for performance, this paper uses profits, confirming the link between the fall in industry revenues and firm profits.Profits have decreased more for local firms than multinationals indicating that the large firms adapt better to technological and economic disruptions

Are streaming and other music consumption modes substitutes or complements?

Abstract. From a representative survey of 2,000 French individuals, we study whether consumption of music through streaming services, such as Spotify or YouTube, is a substitute or a complement to other music consumption modes such as CD, Pay-downloads or live music. Controlling for the taste for music, various socio-demographic characteristics, as well as for the usual determinants of music consumption either offline (radio, TV, friends/relatives) or online (online recommendations, social networks), our results show that consuming music as streams (where the consumer does not possess the music but has just an access to it) has no significant effect on CDs purchase but is a complement to buying music online. The use of streaming services also affects positively live music attendance, but only for national or international artists who are more likely to be available on streaming services. These results suggest that a new music ecosystem is emerging in which the "possession" as well as the "access" modes of recorded music consumption might coexist

Determinants of Demand for Cable TV Services in the Era of Internet Communication Technologies

The rise of the Internet Communication Technologies (ICTs), such as video-on-demand (VOD) services, is expected to have substantial impact on the entertainment industry. In particular, cable TV is likely to be one of the media channels most affected by the expansion and development of these new technologies. Given these changes and the fact that the signs of the cable TV viewership decline are starting to show, it is important to investigate the potential of the loss of competitive advantage of television programming services. Most of the existing research on the topic focuses on the relationship between TV viewing and Internet penetration. However, economic evidence on the relationship between cable TV services and such ICTs as VOD services is limited. In this paper, we empirically investigate the determinants of the demand for cable TV services in the era of ICTs. Our main objective is to identify the relationship between cable TV and VOD substitute services at the aggregate national level as well as identify some of the mechanisms behind this relationship. We conduct an observational study using a sample of the U.S. quarterly national-level data for years 2008-2015. The data on the number of Time Warner Cable (TWC) subscribers is used as a proxy for cable TV consumption, while the data on the number of Netflix subscribers is used as a proxy for VOD services consumption. We estimate several specifications of the OLS regressions controlling for own price, availability of related goods (VOD services, mobile phones, Internet), and income. Our results contribute to the existing literature on the economics of entertainment by presenting evidence of substitution between the VOD services and cable TV services. More specifically, our estimates for the elasticity between TV and VOD services, obtained using first-differences OLS estimation, suggest that a 1 percent increase in the number of Netflix subscribers is associated with a 0.123 percent decrease in the number of TWC subscribers. This implies that providers are likely to benefit from focusing on offering extra value to consumers rather than trying to gain additional revenue through advertising. The results of the analysis also highlight that higher prices for cable TV services are likely to be interpreted by consumers as a signal for quality. More specifically, our estimates suggest that a 1 percent increase in own price is associated with 0.38 percent increase in the number of TWC subscribers. This implies that offering greater choice of programs and higher subscription prices might be the pricing strategy to increase revenues. These findings provide a better understanding of the mechanisms behind consumer choice and decision-making processes. In turn, this understanding elicits valuable insights into television programming services revenue sustainability, and the competition of the providers of these services with the providers of the VOD services

An Empirical Analysis of Usage Behavior by Content Type and Behavioral Orientation on a Mobile Music App

Recently, many mobile apps have made viable new business models such as in-app purchase. In this paper, we quantify how mobile app usage relates to the unique characteristics of behavioral orientations and content types, focusing on the interrelationship among content usage in the context of in-app purchase. Using a large-scale dataset of individual content usage in a particular music mobile app, we build a simultaneous equation panel data model to examine dynamic interdependent usage of mobile app. We find a positive temporal effect of self-oriented content usage (download) on other-oriented content usage (gift), based on behavioral orientation, and also a temporal interdependence between external (ringtone) and internal usage (mp3) based on types of content. We also find that the 4G communications standard increases content usage in this mobile app. These findings provide useful insights for mobile app developers, mobile network operators, content providers, and mobile device manufacturers