Goel, Miesing and Chandra (2010)

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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

Goel, Miesing and Chandra (2010)
Title: The Impact of Illegal Peer-to Peer File Sharing on the Media Industry
Author(s): Goel, S., Miesing, P., Chandra, U.
Year: 2010
Citation: Goel, S., Miesing, P., & Chandra, U. (2010). The impact of illegal peer-to-peer file sharing on the media industry. California Management Review, 52(3), 6-33.
Link(s): Definitive
Key Related Studies:
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About the Data
Data Description: Tests used event study methodology to document informed public opinion on the issues by using stock price changes in a small window of time around an event as a summary measure to assess the impact of the event on the future cash flows of affected firms.

The sample included stocks representing the media industry listed on the New York and American stock exchanges and on NASDAQ. The events considered were passage of copyright legislation related to the media industry and lawsuits filed against individuals and companies that facilitate illegal file sharing during 1991-2006. Researcher obtained filing dates from public sources and confirmed them with courts of filing. Enactment dates were collected from government and other sites on the Internet and other literature. Data on stock prices is from the Center for Research in Security Prices.

Researchers examined abnormal stock price changes for 22 publicly traded firms in the entertainment industry around the dates of 59 events for a total sample of 1,298 firm-events.

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:
  • Various
Funder(s):
  • Not stated

Abstract

Peer-to-Peer networking technology and related innovations have had a major impact on the music and motion picture industries. While digital technology has improved the quality of audio and video recordings and decreased distribution costs, it has also made unauthorized duplication of copyrighted material and its transmission over the Internet easier. The media industry attributes an erosion of its sales after 1999 to the illegal copying and sharing of digital files and has taken steps to tighten copyright laws and prosecute violators. Others attribute the downturn to a lack of innovative products and futile efforts by the industry to retain a business model made obsolete by technological innovation. In the meantime, unauthorized file-sharing via Peer-to-Peer networks continues unabated and its real financial impact on the industry remains unclear. The market perceives illegal file-sharing to be a significant threat to the long-term profitability of the media industry and regards current legal initiatives to protect its intellectual capital as beneficial. This article discusses several strategies and business models that the media industry may consider to respond to the current threat and better cater to changing customer tastes.

Main Results of the Study

  • Researchers documented positive stock price reactions for a broad sample of media stocks to the passage of copyright legislation and news of enforcement action against copyright violators, which suggests that the market believes that legal measures taken by the industry to safeguard its intellectual capital will enhance its future cash flows.
  • Future business strategies based on charging for artistic works are viable, even in the face of current availability of free substitutes over P2P networks.
  • Several business strategies to check Internet piracy and utilize new technology to cater to evolving customer tastes, such as educating the public about the need to pay for copyright-protected works in addition to tighter copyright laws and stricter enforcement, simplifying the process of obtaining copyright permissions to encourage legal use of artistic works and adoption of new business models that move the industry away from sale of CDs and DVDs and toward monetizing access to music and movies that may be experienced at any time.

Policy Implications as Stated By Author

  • Researchers tests show a significant increase in stock prices on average that is consistent with the proposition that sophisticated investors believe the industry’s current strategy of protecting its revenues through tighter laws and stronger enforcement is associated with an expectation of higher cash flows. Empirical analysis suggests the industry should continue its current legal strategy to deter unauthorized file sharing.



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)
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: 22
Level of aggregation: publicly traded firms
Period of material under study: 1991-2006


Sample size: 59
Level of aggregation: events
Period of material under study: 1991-2006


Sample size: 1,298
Level of aggregation: firm-events
Period of material under study: 1991-2006