Garcia, Hicks and McCrary (2020)
Contents
Source Details
| Garcia, Hicks and McCrary (2020) | |
| Title: | Copyright and Economic Viability: Evidence from the Music Industry |
| Author(s): | Garcia, K., Hicks, J., McCrary, J. |
| Year: | 2020 |
| Citation: | Garcia, K., Hicks, J. and McCrary, J. (2020) Copyright and Economic Viability: Evidence from the Music Industry. Journal of Empirical Legal Studies (forthcoming 2020) |
| Link(s): | Open Access |
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| About the Data | |
| Data Description: | The study comprises two datasets based on listening figures supplied by Nielsen: • A random sample of albums released between 2008 and 2017. • A random subsample of 10% of the first dataset, tracking sales and streaming volumes per track. The datasets are supplemented with metadata concerning release date, genre and indications of previous releases. In total, 1,528 tracks are observed from 105 unique albums. |
| Data Type: | Primary and Secondary data |
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| Cross Country Study?: | No |
| Comparative Study?: | No |
| Literature review?: | No |
| Government or policy study?: | No |
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Abstract
“Copyright provides a long term of legal excludability, ostensibly to encourage the production of new creative works. How long this term should last, and the extent to which current law aligns with the economic incentives of copyright owners, has been the subject of vigorous theoretical debate. We investigate the economic viability of content in a major creative industry—commercial music—using a novel longitudinal dataset of weekly sales and streaming counts. We find that the typical sound recording has an extremely short commercial half-life—on the order of months, rather than years or decades—but also see evidence that subscription streaming services extend the period of economic viability. Strikingly, though, we find that decay rates are sharp even for blockbuster songs, and that the patterns persist when we approximate weekly revenue. Although our results do not provide an estimate of the causal effect of copyright on incentives, they do put bounds on the problem, and suggest a misalignment between the economic realities of the music industry and the current life-plus-seventy copyright term in the United States.”
Main Results of the Study
• Music sales decline sharply after months of release, decreasing to less than 5% of their initial peak. Correspondingly, the study anticipates that, at least in respect of ‘blockbuster’ albums, revenues face a similar steep decline (averaging approx. $600,000 in their first week of release, falling to $65,000 come the sixth month). Sales of individual songs have a slightly longer period of viability, with sales declining to 20% of their initial peak after the first year of release, with commercial viability lasting up to several years. The study finds that the rates of decline are roughly similar regardless of whether the music is a ‘blockbuster’ or of ‘average’ popularity (in respect of individual tracks, songs from both groups lose 80% of their initial sales volume after the first year of release).
• Streaming may have a prolonging effect on the commercial viability of music, with declines in consumption less pronounced via this medium (25% of initial volume in first year in respect of albums).
• The study also finds differences in the decline of music sales based on genre; broadly, hip-hop and pop genres decline more steeply than country and rock music.
Policy Implications as Stated By Author
The study observes that due to the short term of commercial viability of music, the current term of copyright protection may be overlong. They authors suggest that a ‘carefully calibrated’ term of protection may achieve a better balance between incentivising creation and ensuring a robust public domain.
Coverage of Study
Datasets
| Sample size: | 105 |
| Level of aggregation: | Albums |
| Period of material under study: | 2008-2017 |
| Sample size: | 1,528 |
| Level of aggregation: | Songs |
| Period of material under study: | 2008-2017 |
