Garcia, Hicks and McCrary (2020)

From Copyright EVIDENCE

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

Garcia, Hicks and McCrary (2020)
Title: Copyright and Economic Viability: Evidence from the Music Industry
Author(s): Garcia, K., Hicks, J., McCrary, J.
Year: 2020
Citation: Garcia, K., Hicks, J. and McCrary, J. (2020) Copyright and Economic Viability: Evidence from the Music Industry. Journal of Empirical Legal Studies (forthcoming 2020)
Link(s): Open Access
Key Related Studies:
Discipline:
Linked by:
About the Data
Data Description: The study comprises two datasets based on listening figures supplied by Nielsen:
• A random sample of albums released between 2008 and 2017.
• A random subsample of 10% of the first dataset, tracking sales and streaming volumes per track.
The datasets are supplemented with metadata concerning release date, genre and indications of previous releases. In total, 1,528 tracks are observed from 105 unique albums.
Data Type: Primary and Secondary 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:
  • 2008-2017
Funder(s):

Abstract

“Copyright provides a long term of legal excludability, ostensibly to encourage the production of new creative works. How long this term should last, and the extent to which current law aligns with the economic incentives of copyright owners, has been the subject of vigorous theoretical debate. We investigate the economic viability of content in a major creative industry—commercial music—using a novel longitudinal dataset of weekly sales and streaming counts. We find that the typical sound recording has an extremely short commercial half-life—on the order of months, rather than years or decades—but also see evidence that subscription streaming services extend the period of economic viability. Strikingly, though, we find that decay rates are sharp even for blockbuster songs, and that the patterns persist when we approximate weekly revenue. Although our results do not provide an estimate of the causal effect of copyright on incentives, they do put bounds on the problem, and suggest a misalignment between the economic realities of the music industry and the current life-plus-seventy copyright term in the United States.”

Main Results of the Study

• Music sales decline sharply after months of release, decreasing to less than 5% of their initial peak. Correspondingly, the study anticipates that, at least in respect of ‘blockbuster’ albums, revenues face a similar steep decline (averaging approx. $600,000 in their first week of release, falling to $65,000 come the sixth month). Sales of individual songs have a slightly longer period of viability, with sales declining to 20% of their initial peak after the first year of release, with commercial viability lasting up to several years. The study finds that the rates of decline are roughly similar regardless of whether the music is a ‘blockbuster’ or of ‘average’ popularity (in respect of individual tracks, songs from both groups lose 80% of their initial sales volume after the first year of release).
• Streaming may have a prolonging effect on the commercial viability of music, with declines in consumption less pronounced via this medium (25% of initial volume in first year in respect of albums).
• The study also finds differences in the decline of music sales based on genre; broadly, hip-hop and pop genres decline more steeply than country and rock music.

Policy Implications as Stated By Author

The study observes that due to the short term of commercial viability of music, the current term of copyright protection may be overlong. They authors suggest that a ‘carefully calibrated’ term of protection may achieve a better balance between incentivising creation and ensuring a robust public domain.



Coverage of Study

Coverage of Fundamental Issues
Issue Included within Study
Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare
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)

Datasets

Sample size: 105
Level of aggregation: Albums
Period of material under study: 2008-2017


Sample size: 1,528
Level of aggregation: Songs
Period of material under study: 2008-2017