Telang and Waldfogel (2014)

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

Telang and Waldfogel (2014)
Title: Piracy and New Product Creation: A Bollywood Story
Author(s): Rahul Telang, Joel Waldfogel
Year: 2014
Citation: Telang, R. and Waldfogel, J. (2014) Piracy and New Product Creation: A Bollywood Story. Available at SSRN: https://ssrn.com/abstract=2478755
Link(s): Open Access
Key Related Studies:
Discipline:
Linked by: Sprigman (2017)
About the Data
Data Description: The article uses a compilation of secondary sources across two datasets:

• IMDB and IBOS network (to determine relationships between quality and revenue generated at movie-level).

• Entertainment tax data from Uttar Pradesh combined with IMDB rankings (to determine aggregate revenue at country-level).

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?: No
Government or policy study?: No
Time Period(s) of Collection:
  • 1960-1985
  • 1985-2000
Funder(s):

Abstract

While copyright research in the decade following Napster focused mostly on whether file sharing undermines demand, research has more recently asked how piracy and other aspects of digitization affect the supply of new products. Although revenue has declined sharply, evidence that weakened effective copyright protection undermines creation has been elusive. Instead, because of cost-reducing effects of digitization, the number of new recorded music products – and their apparent quality – has increased. This study examines movie production in India during a period of technological change that facilitated large-scale piracy. The diffusion of the VCR and cable television in India between 1985 and 2000 created substantial opportunities for unpaid movie consumption. We use this episode to study possible impacts of piracy on supply. We first document, from narrative sources, conditions conducive to piracy as these technologies diffused. We then provide strong circumstantial evidence of piracy in diminished appropriability: movies’ revenues fell by a third to a half, conditional on their ratings by movie-goers and their ranks in their annual revenue distributions. Weaker effective demand undermined creative incentives. While the number of new movies released had grown steadily from 1960 to 1985, it fell markedly between 1985 and 2000, suggesting a supply elasticity in the range of 0.2-0.7. Thus, our study provides affirmative evidence on a central tenet of copyright policy, that stronger effective copyright protection effects more creation. We contrast our findings with evidence from other contexts.

Main Results of the Study

Using the Bollywood industry as a case study, the authors find that during times of low demand due to piracy there is a negative impact on incentives for creators, effectively reducing supply. Using a combination of tax, revenue, and production data, the authors find:

• Between 1960 and 1985 figures hold steady (or increase) for all factors.

• Between 1985 and 2000, revenues fell by one-third to one-half, and production decreased substantially (suggesting a supply elasticity of 0.5-0.7). The authors attribute this change primarily to increased rates in piracy, (as a result of a combination of poor quality theatres, and high diffusion of VCR and cable equipment).

• Production increased post-2000, which the authors attribute to a variety of factors, namely: stronger enforcement; high quality multiplex theatres, and; introduction of alternative revenue sources (including foreign revenues and television).

Policy Implications as Stated By Author

• The authors note that, due to lack of research because of difficulty in accessing data, this collation and analysis from multiple sources should in itself aid policy-making in India.

• A combination of factors can encourage creative output, including stronger enforcement, multiple revenue sources, and better quality platforms to access entertainment goods.



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)?
Green-tick.png
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)
Coverage of Evidence Based Policies
Issue Included within Study
Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right)
Green-tick.png
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)

Datasets