|Title:||File sharing and international sales of copyrighted music: An empirical analysis with a panel of countries|
|Citation:||Zentner, A. (2005). File sharing and international sales of copyrighted music: An empirical analysis with a panel of countries. Topics in Economic Analysis & Policy, 5(1).|
|Link(s):||Definitive , Open Access|
|Key Related Studies:|
|Linked by:||Cox, Collins and Drinkwater (2010), Danaher, Dhanasobhon, Smith and Telang (2010), Handke (2012b), Liebowitz (2008), Martikainen (2011), Michel (2006), Zentner (2006), Zentner (2009)|
|About the Data|
|Data Description:|| This study combines the aggregate music sales by country for the years 1997-2002 for 65 countries with country-level data on internet and broadband usage.
Data was obtained on music sales from the IFPI, which published a panel of sales for 71 countries for the years 1997-2002, and combined with a panel of data on internet and broadband usage by country from the International Telecommunication Union, with a panel of software piracy from the Business Software Alliance, and with panels of total and per capita GDP and exchange rates from the World Bank and IMF, respectively.
|Data Type:||Secondary data|
|Secondary Data Sources:|
|Data Collection Methods:|
|Data Analysis Methods:|
|Cross Country Study?:||Yes|
|Government or policy study?:||No|
|Time Period(s) of Collection:||
Global music sales have substantially fallen in the last four years. This paper uses a panel of country-level data to investigate the extent to which this is a consequence of file sharing. I find that countries with higher internet and broadband penetration have suffered higher drops in music sales, suggesting that music downloads may explain at least part of the recent reduction in sales. I also find some evidence that file sharing may explain a change in the composition of sales by types of repertoires, with a higher reduction of sales of types of music that are being shared more heavily.
Main Results of the Study
- Countries with higher internet and broadband penetration have suffered higher reductions in music sales, suggesting that file sharing may explain at least part of the recent reduction in sales.
- The recording industry may increase or decrease prices as a consequence of privacy.
- File sharing may be behind the recent increase in the share of sales of domestic repertoire in total sales, with a higher reduction of sales of types of music that are being shared more heavily. The percentage increased in this share from 64% of all sales in 1997 to 67.5% in 2001 (within a sample limited to 51 countries).
- File sharing has a negative effect on the share of sales of international repertoire on total music sales. The percentage decreased in this share between years 1997 and 1998 (within a sample limited to 51 countries).
Policy Implications as Stated By Author
- Knowledge of the estimates of the impact of file-sharing on sales is an essential part of the information needed to determine the strength of intellectual property rights.
- The development of fast connections will very likely increase the importance of the impact of file sharing on sales of digital copyrighted goods.