|Title:||Music file sharing and sales displacement in the iTunes era|
|Citation:||Waldfogel, J. (2010). Music file sharing and sales displacement in the iTunes era. Information Economics and Policy, 22(4), 306-314.|
|Key Related Studies:|
|Linked by:||Aguiar and Martens (2013), Handke (2012b)|
|About the Data|
|Data Description:||The dataset is taken from a survey of 500 undergraduate students at a US university in January 2009 and again in January 2010 .
The online survey asked them to indicate one of the following statements about each of 50 songs from the top 100 songs on iTunes platform: (1) I do not have a copy, (2) I have a legal digital copy, (3) I have a legal physical copy, (4) I have a “shared” copy, (5) I have access through a subscription service. Respondents were also asked to indicate their willingness to pay for each of the 50 songs.
|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:||
A growing empirical literature examines the relationship between music file sharing and legal purchases of music, but existing studies examine the period before consumers had attractive legal digital a la carte options. The iTunes Music Store has grown quickly since its appearance in 2003, and digital music now accounts for a third of US recorded music sales. Using two new surveys of University of Pennsylvania undergraduates in 2009 and 2010, we ask how music file sharing and sales displacement operate in the iTunes era, when the alternative to file sharing is purchasing individual songs, rather than entire albums. We find large amounts of file sharing in this population. Respondents have more stolen than paid music, but the music obtained via file sharing is, for the most part, low-valuation music which the respondents would likely not have purchased. The rate of sales displacement implied by the relationship between stolen and purchased music across respondents in both samples is between −0.15 and −0.3. That is, an additional song stolen reduces paid consumption by between a third and a sixth of song. Perhaps surprisingly, this is about the same as the CD sales displacement rate found for the pre-iTunes era using a similar empirical approach on a similar study population.
Main Results of the Study
- There is high rate of file sharing among the sample in 2009 and 2010, to the extent that respondents have more stolen than paid music. But the music obtained via file sharing is, for the most part, low-valuation music which the respondents would likely not have purchased.
- The rate of sales displacement implied by the relationship between stolen and purchased music across respondents is between −0.15 and −0.3 in both samples. That is, an additional song stolen reduce paid consumption by between a third and a sixth of song.
- This is roughly the same as the CD sales displacement rate found for the pre-iTunes era using a similar empirical approach for a similar study population.
- The iTunes Music store has substantially changed music retailing. But based on this sample of songs and consumers, it does not seem to have changed the effect of piracy.
- While the benefit to consumers exceeds the cost to producers, this welfare benefit is only possible if revenue is sufficient to attract production in the first place.
Policy Implications as Stated By Author
Ensuring a sufficient revenue to attract production in the first place is necessary in order to make possible the benefit to consumers which results from file sharing.
Coverage of Study
|Level of aggregation:||Focus of the study is the domestic market for recorded music in the USA.|
|Period of material under study:||2009-2010|