Peitz and Waelbroeck (2004)

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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

Peitz and Waelbroeck (2004)
Title: The effect of internet piracy on CD sales: Cross-section evidence
Author(s): Peitz, M., Waelbroeck, P.
Year: 2004
Citation: Peitz, M., & Waelbroeck, P. (2004). The effect of internet piracy on CD sales: Cross-section evidence. Review of Economic Research on Copyright Issues,1(2), 71-79.
Link(s): Definitive , Open Access
Key Related Studies:
Discipline:
Linked by: Andersen and Frenz (2008), Buxmann, Pohl, Johnscher and Strube (2005), Handke (2012a), Huygen, Helberger, Poort, Rutten and Van Eijk (2009), Leung (2009), Liebowitz (2006b), Martikainen (2011), Smith and Telang (2012), Thomes (2013), Van Eijk, Poort and Rutten (2010), Zentner (2005)
About the Data
Data Description: The study used a combination of secondary data sources, representing 16 countries with the largest markets for pre-recorded music (in value), accounting for more than 90% of the world market value, for the period 1998-2002.
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:
  • 1998-2002
Funder(s):

Abstract

We use a 1998-2002 cross-section dataset to analyse the claim of losses due to internet piracy made by the record industry. The results suggest that internet piracy played a significant role in the decline in music sales during the early days of file-sharing networks.

Main Results of the Study

The study confirms the RIAA’s claim that MP3 music downloads were causing a substantial decrease in music sales. It finds that:

  • Music downloading could have caused a 20% reduction in music sales worldwide between 1998 and 2002: a significant negative effect at the 10% confidence level.
  • Broadband penetration is significant: it always has a negative impact on music sales, although other factors are also relevant.
  • The increased availability of digital media players also negatively influences music sales.
  • The study also shows that factors other than music downloads on file-sharing networks were likely to have been responsible for the decline in music sales in 2003.

Policy Implications as Stated By Author

Although the study’s stated 20% reduction in worldwide music sales is said to be only a crude estimate, the authors believe that it is a good reference value that other studies, especially microeconometric ones, could use to assess the exact substitution that has taken place between CDs and MP3s.


Coverage of Study

Coverage of Fundamental Issues
Issue Included within Study
Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare
Green-tick.png
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)
Green-tick.png
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: 121250
Level of aggregation: P2P users
Period of material under study: 2002-2003