Bounie, Bourreau and Waelbroeck (2007)

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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

Bounie, Bourreau and Waelbroeck (2007)
Title: Pirates or explorers? Analysis of music consumption in french graduate schools
Author(s): Bounie, D., Bourreau, M., Waelbroeck, P.
Year: 2007
Citation: Bounie, D., Bourreau, M., & Waelbroeck, P. 2007. Pirates or explorers? Analysis of music consumption in French graduate schools. Brussels Economic Review, 50(2), 167-192.
Link(s): Definitive , Open Access
Key Related Studies:
Discipline:
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About the Data
Data Description: An anonymous online survey was administered in two French graduate schools from May 26 to June 3, 2004. The questionnaire included thirty six closed questions divided in six main parts: information on the respondent (school, sex and age), Internet access, music consumption, MP3 exchanges, MP3 uses and opinion on downloading. Overall, 574 people answered the questionnaire.
Data Type: Primary data
Secondary Data Sources:
Data Collection Methods:
Data Analysis Methods:
Industry(ies):
Country(ies):
Cross Country Study?: No
Comparative Study?: No
Literature review?: No
Government or policy study?: No
Time Period(s) of Collection:
  • May 2004-June 2004
Funder(s):
  • None

Abstract

This paper analyzes the impact of music file sharing on CD purchases. Traditionally, two arguments are opposed concerning the impact of music file sharing on CD sales. On the one hand, MP3 downloads only reduces sales of legitimate CDs (the "competition effect"). On the other hand, consumption of free MP3s could lead people to buy CD which they would never have bought otherwise (the “sampling effect”). Because the court in the Napster case and some academic researchers have dismissed this sampling effect, this article seeks to assess whether sampling does indeed occur and in the affirmative what are the relative contributions of the positive sampling and the negative competition effects of MP3 files on CD purchases. To do so, we administered an anonymous online survey in two French graduate schools from May 26 to June 3, 2004. We find that there are two populations: explorers and pirates. For the explorers, MP3 downloading from P2P networks has a positive impact on CD consumption. For the pirates, anonymous file-sharing on the internet and intranets has a negative effect on CD consumption, while physical exchanges have a positive effect.

Main Results of the Study

  • This study shows that there are two populations of MP3 users: people who use MP3s to discover new music through file-sharing networks, which leads them to purchase more CDs (the explorers) and people who mainly use file-sharing networks as substitutes to regular CDs (the pirates).
  • New business models should discriminate between these two types of users of digital music in order to extract more surplus from the true music fans. There are already some initiatives which allow internet users to download an unlimited amount of music files for a monthly fee or match filesharing users to new artists. New tracking software also expands the space of products of which internet users are aware.
  • File-sharing technologies have amplified consumption patterns in the sense that music fans have used MP3 to discover new music and increase their consumption of pre-recorded music while people with low willingness to pay for music have used MP3 files as direct substitutes to legal purchases.

Policy Implications as Stated By Author

The estimation results have two implications. First, new business models should try and better discriminate between these two types of users of digital music in order to extract more surplus from the true music fans. Secondly, new business models should also encourage the formation of online communities as our results suggest that people who share music through personal contacts among a community have a higher probability to purchase more CDs.

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)
Green-tick.png
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: 574
Level of aggregation: Individual
Period of material under study: 2004