Gopal, Bhattacharjee and Sanders (2006)

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

Gopal, Bhattacharjee and Sanders (2006)
Title: Do Artists Benefit from Online Music Sharing?
Author(s): Gopal, R. D., Bhattacharjee, S., Sanders, G. L.
Year: 2006
Citation: Gopal, R. D., Bhattacharjee, S., & Sanders, G. L. (2006). Do Artists Benefit from Online Music Sharing?*. The Journal of Business, 79(3), 1503-1533.
Link(s): Definitive , Open Access
Key Related Studies:
Discipline:
Linked by: Bhattacharjee, Gopal, Lertwachara and Marsden (2006b), Djekic and Loebbecke (2005), Hansen and Walden (2012)
About the Data
Data Description: The data used to investigate the propositions were drawn from two sources:

The first data set consisted of primary data collected via a survey (n= 200) and was used to validate consumer choices under various technological and economic parameter settings.

A second data set was developed using the Billboard ranking charts and was used to evaluate the propositions related to the superstar phenomenon and sharing technologies.

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:
  • 1991-2000

2006

Funder(s):

Abstract

We present a model of online music sharing that incorporates economic and technological incentives to sample, purchase, and pirate. Contrary to conventional wisdom, we find that lowering the cost of sampling music will propel more consumers to purchase music online as the total cost of evaluation and acquisition decreases. Attempts to prevent sampling will be counterproductive in the long run. Sharing technologies erode the superstar phenomenon widely prevalent in the music business. Extensive empirical investigations, based on surveys and Billboard ranking charts, lend support to the economic model and validate the key results.

Main Results of the Study

The main results of this study are:

  • Decreasing sampling costs not only lead more potential consumers to sample unknown music items but also lead more consumers to buy the music items that they have sampled.
  • Lower sampling costs have a positive effect on the consumer surplus of samplers, which, in turn, has a positive effect on their purchasing intentions.
  • The industry can potentially reverse the effects of online audio piracy by providing more legal and efficient sampling techniques that consumers could use. This is contrary to the anecdotal belief that online availability of digital music leads only to a drain on profitability.
  • The impact of music availability online has a differential impact based on the realized value of the music to the consumers. For higher valued songs, online search and sampling capabilities have a beneficial impact on sales. Lower valued music items are pirated more than higher valued items, ceteris paribus, and consequently sales of those suffer.
  • Superstars come under increasing threat from two fronts: (a) a greater proportion of sampling of superstar music leads to piracy—users who sample do so with an increased intention to pirate, and (b) decreasing sampling costs lead to an erosion of superstardom. However, there is a greater probability of discovering other high quality music items by lesser known artists with the new technology, which will hurt a superstar’s sales—and, hence, status.

Policy Implications as Stated By Author

"Online music technologies are fundamentally altering the landscape of the music business. While consumers clearly stand to gain from these opportunities, the music industry can also reap significant benefits via effective strategies. Music as an artistic expression transcends economics and the bottom‐line revenues of the music industry. Indeed, as stated by Van Morrison, “Music is spiritual; the music business is not”. Nevertheless, fundamentally sound business models are critical for enabling the social, artistic, and spiritual dimensions of music to flourish."

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)
Green-tick.png
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: 200
Level of aggregation: Students
Period of material under study: 2006


Sample size: 2174
Level of aggregation: Recording Artists
Period of material under study: 1991-2000