Liebowitz (2004)

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

Liebowitz (2004)
Title: Will MP3 downloads Annihilate the Record Industry? The Evidence so Far
Author(s): Liebowitz, S. J.
Year: 2004
Citation: Liebowitz, S. (2004). Will MP3 downloads annihilate the record industry? The evidence so far. Advances in the Study of Entrepreneurship, Innovation, and Economic Growth, 15, 229-260.
Link(s): Definitive , Open Access
Key Related Studies:
Discipline:
Linked by: Andersen and Frenz (2008), Bhattacharjee, Gopal, Lertwachara, Marsden and Telang (2007), Blackburn (2004), Bounie, Bourreau and Waelbroeck (2007), Liebowitz (2005), Liebowitz (2006a), Liebowitz (2006b), Michel (2005), Peitz and Waelbroeck (2004), Sandulli (2007), Sandulli and Martin-Barbero (2007)
About the Data
Data Description: Data on quantities of records sold in the US on a yearly basis and on revenues is taken from the Recording Industry Association of America.
Data Type: Secondary data
Secondary Data Sources:
Data Collection Methods:
Data Analysis Methods:
Industry(ies):
Country(ies):
Cross Country Study?: No
Comparative Study?: No
Literature review?: Yes
Government or policy study?: No
Time Period(s) of Collection:
  • Not stated
Funder(s):

Abstract

This paper investigates the impact of unauthorized downloading of MP3 files on the recording industry. Although the no longer extant Napster was the most famous system used for such downloading, its progeny have continued to allow millions of music listeners to download music (and other) files without remuneration to the copyright owners. Using data on the historical sales of prerecorded music I examine in detail the recent decline in record sales and attempt to gauge the importance of various alternative factors that have been put forward to explain this decline. I conclude that the evidence supports a claim that MP3 downloads decrease sales.

Main Results of the Study

  • MP3 downloads are causing significant harm to the record industry, but it is not clear whether such downloading in the current legal environment will cause a mortal blow to the industry.
  • One of the causes of the decline in record sales is the decline of singles that has been ongoing for quite some time.
  • Changes in media might be thought to lead to changes in demand due to a ‘librarying’ motive that would consist of individuals wishing to update some of their favorite recordings to the new medium, though empirical support for this is mixed.
  • Prices for records have remained consistent during the last 20 years; another reason for changes in record sales might be due to decline in income.


Policy Implications as Stated By Author

  • It is important to understand the impact of MP3 downloads if we, as a society, are to determine appropriate responses to allow the record companies to take in defending their economic position from the encroachments brought about by MP3 downloads.



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)
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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