Zentner (2006)

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

Zentner (2006)
Title: Measuring the effect of file sharing on music purchases
Author(s): Zentner, A.
Year: 2006
Citation: Zentner, A. (2006). Measuring the effect of file sharing on music purchases*. Journal of Law and Economics, 49(1), 63-90.
Link(s): Definitive , Open Access
Key Related Studies:
Discipline:
Linked by: Danaher and Smith (2013), Danaher, Smith, Telang and Chen (2012), Hammond (2012), Liebowitz (2008), McKenzie (2009), Mortimer, Nosko and Sorensen (2012), Oberholzer-Gee and Strumpf (2007), Rob and Waldfogel (2007), Taylor, Ishida and Wallace (2009), Waldfogel (2010)
About the Data
Data Description: This paper uses a European consumer mail survey by Forrester Research from October 2001. The survey contains more than 70 questions about many different topics, with many subitems and multiple answers.

The survey includes 22,488 observations and is designed to be representative of the total 16 and older population in seven European countries: France, Germany, Italy, Netherlands, Spain, Sweden, and the United Kingdom.

The database from which that data are taken contains a discrete {0, 1} variable indicating purchases of music—CDs, tapes, or records—during the month prior to the survey for each respondent. It also contains information about access to the Internet; purchases of many goods during the last month, including videos, books, software, and groceries; ownership of many electronic goods, including portable stereos, hi‐fi stereos, cellular phones, DVD players, MP3 players, CD writers, and game consoles; and demographic variables such as gender, age, work status, education, household size, and household income.

For Internet users, the database contains information on the weekly average number of hours spent online, the number of years that they have been going online and using e‐mail, and information about their Internet activity, including checking e‐mail, using search engines, purchasing goods online, publishing their own Web pages, participating in online auctions, and downloading MP3 files. For people with an Internet connection at home, the database contains information on the type of connection—DSL, cable, ISDN, or dial‐up.

Data Type: Secondary data
Secondary Data Sources:
Data Collection Methods:
Data Analysis Methods:
Industry(ies):
Country(ies):
Cross Country Study?: Yes
Comparative Study?: No
Literature review?: No
Government or policy study?: No
Time Period(s) of Collection:
  • 2001
Funder(s):

Abstract

File sharing may substantially undermine the intellectual property rights of digital goods. This paper concentrates on the music industry. I estimate the effect of music downloads on the probability of purchasing music using a European individual-level cross section of 15,000 people from 2001. A simple comparison of means shows that people who regularly download music online are more likely to buy music. The positive relationship persists when controlling for observed characteristics. However, simultaneity between tastes for music and peer-to-peer usage makes it difficult to isolate the causal effect of music downloads on music purchases. To break that simultaneity, this paper uses measures of Internet sophistication and the speed of the Internet connection as instruments. The results suggest that peer-to-peer usage reduces the probability of buying music by 30 percent. On the basis of my estimates, back of the-envelope calculations indicate that-without downloads-sales in 2002 would have been around 7.8 percent higher.

Main Results of the Study

The main findings of this paper are:

  • This paper uses a European individual‐level database to measure the impact of online music file-sharing may explain a 30 percent reduction in the probability of buying music.
  • If music downloading reduces the probability of buying by 30 percent, if 15 percent of the population downloads music, if downloaders are twice as likely to buy music than nondownloaders, and if—conditional on buying—downloaders and nondownloaders buy the same quantity of units, then sales in 2002 would have been 7.8 percent higher.
  • Downloaded music may be shared with people who do not download MP3 files and affect their purchases as well. In this event, the estimates understate the effect of online music downloading on music sales.
  • The interest is not exclusive to the music industry. Other digital copyrighted goods such as movies, software, games, and books are also being shared online.
  • The development of fast connections is likely to increase the impact of file sharing on sales of these goods. This is going to become an increasingly important issue in the next few years.

Policy Implications as Stated By Author

Referring to the stated findings that file-sharing reduce the probability of consumers buying music from authorised sources, the author states, "The estimates in this paper are an important component of any welfare analysis of file sharing or copyright."



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

Sample size: 15,000
Level of aggregation: Individual
Period of material under study: 2001