|Title:||Should the Music Industry Sue Its Own Customers? Impacts of Music Piracy and Policy Suggestions|
|Author(s):||Leung, T. C.|
|Citation:||Leung, T. C. (2008). Should the music industry sue its own customers? Impacts of music piracy and policy suggestions. University of Minnesota, retrieved Nov, 28, 2012.|
|Key Related Studies:|
|About the Data|
|Data Description:||The study distributed a survey to 1800 undergraduates at the University of Minnesota, of which 884 responses were used. Students were asked to answer two main types of questions, report demographic information and recent consumption of both music and iPods, and make hypothetical choices on music.
90% of the students reported a weekly income less than $200. Students reported surfing the internet an average of 3-4 hours per day.
|Data Type:||Primary data|
|Secondary Data Sources:|
|Data Collection Methods:|
|Data Analysis Methods:|
|Cross Country Study?:||No|
|Government or policy study?:||No|
|Time Period(s) of Collection:||
Two beliefs about music piracy prevail in the music industry. First, music piracy hurts music record sales. Second, the only copyright regime that can help the music industry is one that will eradicate music piracy. To test the two beliefs, I construct a unique survey data set, estimate the demand for music and iPods and show three things. First, music piracy does hurt record sales. Second, music piracy contributes 20% to iPod sales. Finally, counterfactuals experiments show that while a regime without music piracy benefits music producers at the expense of students and Apple, another regime with legal online music and iPod royalty benefits most students and music producers at the expense of Apple.
Main Results of the Study
- The average student owed 2508 songs on his computer, both purchased and pirated. 59.8% of students had bought music and 61% had pirated.
- Students pirate much more music than they purchase (70 songs per month compared to one CD every other month and 4-5 songs per month).
- Students buy fewer iTunes songs and CDs when prices are more expensive. When price per iTunes song increases from $0.99 to $1.87, demand drops 49% and students pirate 15% more music and buy 6% more CDs.
- When students pirate 10% more music through P2P web sites, they buy 0.7% fewer iTunes songs and 0.4% fewer CDs.
- On average, there s a loss of $79/student if the government switches from the Current Regime to the No Music Piracy Regime. On the other hand, switching to the Free Music Royalty Regime on average gains students $534.
- Results indicate that while the No Music Piracy Regime benefits music producers t the expense of students and Apple, the Free Music-Royalty Regime benefits most students and music producers at the expense of Apple.
Policy Implications as Stated By Author
- A copyright regime that eradicates music piracy is not the only regime that can help the music industry.
Coverage of Study
|Level of aggregation:||University students|
|Period of material under study:||2007-2008|