Adermon and Liang (2011)

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Advertising Architectural Publishing of books, periodicals and other publishing Programming and broadcasting Computer programming Computer consultancy Creative, arts and entertainment Cultural education

Film and motion pictures Sound recording and music publishing Photographic activities PR and communication Software publishing (including video games) Specialised design Television programmes Translation and interpretation

1. Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare 2. Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)? 3. Harmony of interest assumption between authors and publishers (creators and producers/investors) 4. Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption) 5. Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)

A. Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right) B. Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction) C. Mass digitisation/orphan works (non-use; extended collective licensing) D. Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability) E. Fair remuneration (levies; copyright contracts) F. Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

Source Details

Adermon and Liang (2010)
Title: Piracy, Music, and Movies: A Natural Experiment
Author(s): Adermon, A., Liang, C.Y.
Year: 2010
Citation: Adermon, A., & Liang, C. Y. (2010). Piracy, music, and movies: A natural experiment (No. 2010: 18). Working Paper, Department of Economics, Uppsala University.
Link(s): Definitive , Open Access
Key Related Studies:
Discipline:
Linked by:
About the Data
Data Description: Weekly and quarterly data taken from aggregate Internet traffic through Internet Exchange Points (IXPs) throughout 2009. For aggregate music sales, we use quarterly data from 2004 to 2009 for physical recorded music sales and from 2007 to 2009 for digital recorded music sales. Before 2007, digital sales were negligible. For aggregate movie sales, we use quarterly data from 2005 to 2009 for movie theater ticket sales and from 2007 to 2009 for DVD movie sales.
Data Type: Secondary data
Secondary Data Sources:
Data Collection Methods:
Data Analysis Methods:
Industry(ies):
Country(ies):
Cross Country Study?: Yes
Comparative Study?: Yes
Literature review?: No
Government or policy study?: No
Time Period(s) of Collection:
  • 2004 to 2009
Funder(s):
  • None

Abstract

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.

Main Results of the Study

This article empirically investigates the effects of copyright protection reform on Internet piracy and on sales of music and movies. More specifically, This article argues that:

  • The Swedish implementation of the IPRED law on April 1, 2009 suddenly increased the risks of piracy. Piracy decreased and that music sales increased after the law reform.
  • Pirated music is a strong substitute to legal music, whereas the substitutability is less for movies. After six months, piracy recovered to a large extent, which resulted in a decrease in the demand for legal music and decreased physical as well as total sales.
  • This raises some doubts regarding the effectiveness of such law reforms in the long run, but it also points towards better legal alternatives to piracy as a possible way forward for the music industry.

Policy Implications as Stated By Author

- Law reform can be effective in preventing piracy and in increasing music sales for the first six months. Some of these effects must be attributed to a combination of the law and widespread public interest. - It is possible that convictions would restore an effect that is more long-lasting.


Coverage of Study

Coverage of Fundamental Issues
Issue Included within Study
Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare
Green-tick.png
Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)?
Harmony of interest assumption between authors and publishers (creators and producers/investors)
Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption)
Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)
Green-tick.png
Coverage of Evidence Based Policies
Issue Included within Study
Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right)
Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction)
Mass digitisation/orphan works (non-use; extended collective licensing)
Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability)
Fair remuneration (levies; copyright contracts)
Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)
Green-tick.png

Datasets

Sample size: 3
Level of aggregation: countries
Period of material under study: 2004-2009


Sample size: 52
Level of aggregation: IXP traffic reports
Period of material under study: 2009


Sample size: 20
Level of aggregation: music sales reports
Period of material under study: 2004 to 2009


Sample size: 10
Level of aggregation: digital music sales reports
Period of material under study: 2007 to 2009


Sample size: 20
Level of aggregation: Movie Theatre ticket sales reports
Period of material under study: 2005 to 2009


Sample size: 10
Level of aggregation: DVD sales reports
Period of material under study: 2007 to 2009