Liebowitz (2005)

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 (2005)
Title: Testing file-sharing's impact by examining record sales in cities
Author(s): Liebowitz, SJ
Year: 2005
Citation: Liebowitz, S. J. (2005). Testing file-sharing's impact by examining record sales in cities. School of Management University of Texas Paper, September, 1-31.
Link(s): Definitive , Open Access
Key Related Studies:
Discipline:
Linked by: Andersen and Frenz (2008), Giletti (2012), Grolleau, Mzoughi and Sutan (2008), Handke (2012a)
About the Data
Data Description: Using a data set for 99 American cities containing information on Internet use, record sales, and other demographic variables, an econometric analysis is undertaken to explain the change in record sales before and after file-sharing
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:
  • 2003
Funder(s):

Abstract

The transmission of digitized music files, particularly on filesharing networks, is having a profound impact on the consumption and production of music. Although previous forms of copying have been found to often have benign effects on copyright owners, the rise in file-sharing has coincided with a steep decline in the sale of sound recordings. This paper attempts to empirically examine whether file-sharing has caused the decline in record sales. It examines the size and pattern of file-sharing and its theoretical impact on record sales. Using a data set for 99 American cities containing information on Internet use, record sales, and other demographic variables, an econometric analysis is undertaken to explain the change in record sales before and after file-sharing. The results imply that file-sharing has caused the entire decline in record sales that has occurred and also appears to have vitiated what otherwise would have been fairly robust growth in the industry. Looking at sales in individual musical genres reinforces the primary conclusions. The record industry’s risky strategy of assiduously fighting filesharing, therefore, appears to have a rational basis.

Main Results of the Study

  • The decline due to file -sharing appears to be larger than the measured decline—the regression results indicate that file-sharing not only reduced sales but also vitiated an increase that otherwise would have occurred
  • When given the choice of free copies versus purchased originals, a significant number of individuals who might have purchased originals will chose to substitute the free copy. When this can happen without limit, among strangers, it would be amazing if there were not a powerful substitution effect.


Policy Implications as Stated By Author

  • The researcher putting forth empirical findings needs to be particularly tentative about results for markets that are in transition, because the future may always prove you wrong
  • Some suggest that the industry should embrace file-sharing. Although it is far from clear that industry attempts to restrict file -sharing will be successful, the results of this paper imply that the industry is at least following a rational course.


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)
Green-tick.png
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: 99
Level of aggregation: City
Period of material under study: 2003