Difference between revisions of "Zhang (2012)"

From Copyright EVIDENCE
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|Full Citation=Zhang, L. (2014). Intellectual Property Strategy and the Long Tail: Evidence From the Recorded Music Industry. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2515581
 
|Full Citation=Zhang, L. (2014). Intellectual Property Strategy and the Long Tail: Evidence From the Recorded Music Industry. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2515581
 
|Abstract=Digitization has impacted firm profitability in many media industries by lowering the cost of copying and sharing creative works. I examine the impact of digital rights management (DRM) - a prevalent strategy used by firms in media industries to address piracy concerns - on music sales. I exploit a natural experiment, where different labels remove DRM from their entire catalogue of music at different times, to examine whether relaxing an album's sharing restrictions increases sales. Using a large sample of albums from all four major record labels, I find that removing DRM increases digital music sales by 10% but relaxing sharing restrictions does not impact all albums equally. It increases the sales of lower-selling albums (i.e., the "long tail") significantly (30%) but does not benefit top-selling albums. These results suggest that the optimal strength of copyright depends on the distribution of products in firms' portfolio.
 
|Abstract=Digitization has impacted firm profitability in many media industries by lowering the cost of copying and sharing creative works. I examine the impact of digital rights management (DRM) - a prevalent strategy used by firms in media industries to address piracy concerns - on music sales. I exploit a natural experiment, where different labels remove DRM from their entire catalogue of music at different times, to examine whether relaxing an album's sharing restrictions increases sales. Using a large sample of albums from all four major record labels, I find that removing DRM increases digital music sales by 10% but relaxing sharing restrictions does not impact all albums equally. It increases the sales of lower-selling albums (i.e., the "long tail") significantly (30%) but does not benefit top-selling albums. These results suggest that the optimal strength of copyright depends on the distribution of products in firms' portfolio.
 +
|Authentic Link=http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2515581
 
|Link=http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2515581
 
|Link=http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2515581
|Reference=Anderson (2006); Brynjolfsson, Hu, and Simester (2011); Peitz and Waelbroeck (2006); (Schumpeter, 1934);
+
|Reference=Schumpeter (1934); Anderson (2006); Peitz and Waelbroeck (2006); Brynjolfsson, Hu, and Simester (2011);
 
|Plain Text Proposition=* Removing DRM increases record sales by 10% and increases sales more in the long tail of the distribution, meaning that less well known artists gain the most from removing DRM.  
 
|Plain Text Proposition=* Removing DRM increases record sales by 10% and increases sales more in the long tail of the distribution, meaning that less well known artists gain the most from removing DRM.  
 
* This suggests that lowering search costs facilitates discovery and thus increases album sales. Of non mainstream artists.  
 
* This suggests that lowering search costs facilitates discovery and thus increases album sales. Of non mainstream artists.  
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|Discipline=O33: Technological Change: Choices and Consequences • Diffusion Processes, O34: Intellectual Property and Intellectual Capital
 
|Discipline=O33: Technological Change: Choices and Consequences • Diffusion Processes, O34: Intellectual Property and Intellectual Capital
 
|Intervention-Response=Could be useful for companies to take the results into account and depending on their portfolio either use or not use DMR.
 
|Intervention-Response=Could be useful for companies to take the results into account and depending on their portfolio either use or not use DMR.
|Description of Data=Data covers music sold between January 1992 and June 2012. dataset contains monthly data of the number of albums sold through traditional outlets like retail chains and digital albums.
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|Description of Data=Data covers music sold between January 1992 and June 2012. Dataset contains monthly data of the number of albums sold through traditional outlets like retail chains and digital albums.
 
|Data Year=January 1992 – June 2012
 
|Data Year=January 1992 – June 2012
 
|Data Type=Secondary data
 
|Data Type=Secondary data
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|Literature review=No
 
|Literature review=No
 
}}
 
}}
|Dataset=
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|Dataset={{Dataset
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|Sample Size=634
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|Level of Aggregation=Artist,
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|Data Material Year=1992-2012
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}}{{Dataset
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|Sample Size=5,864
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|Level of Aggregation=Album,
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|Data Material Year=1992-2012
 +
}}
 
}}
 
}}

Revision as of 14:47, 8 October 2016

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

Zhang (2012)
Title: Intellectual Property Strategy and the Long Tail: Evidence From the Recorded Music Industry
Author(s): Zhang, Laurina
Year: 2012
Citation: Zhang, L. (2014). Intellectual Property Strategy and the Long Tail: Evidence From the Recorded Music Industry. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2515581
Link(s): Definitive , Open Access
Key Related Studies:
Discipline:
Linked by: Belleflamme and Peitz (2014)
About the Data
Data Description: Data covers music sold between January 1992 and June 2012. Dataset contains monthly data of the number of albums sold through traditional outlets like retail chains and digital albums.
Data Type: Secondary data
Secondary Data Sources:
Data Collection Methods:
Data Analysis Methods:
Industry(ies):
Country(ies):
Cross Country Study?: No
Comparative Study?: No
Literature review?: No
Government or policy study?: No
Time Period(s) of Collection:
  • January 1992 – June 2012
Funder(s):

Abstract

Digitization has impacted firm profitability in many media industries by lowering the cost of copying and sharing creative works. I examine the impact of digital rights management (DRM) - a prevalent strategy used by firms in media industries to address piracy concerns - on music sales. I exploit a natural experiment, where different labels remove DRM from their entire catalogue of music at different times, to examine whether relaxing an album's sharing restrictions increases sales. Using a large sample of albums from all four major record labels, I find that removing DRM increases digital music sales by 10% but relaxing sharing restrictions does not impact all albums equally. It increases the sales of lower-selling albums (i.e., the "long tail") significantly (30%) but does not benefit top-selling albums. These results suggest that the optimal strength of copyright depends on the distribution of products in firms' portfolio.

Main Results of the Study

  • Removing DRM increases record sales by 10% and increases sales more in the long tail of the distribution, meaning that less well known artists gain the most from removing DRM.
  • This suggests that lowering search costs facilitates discovery and thus increases album sales. Of non mainstream artists.

Removing DRM had little effect on well established artists.

  • The author notes that this strategy could also increase total consumer welfare by introducing songs to new people who otherwise wouldn't know of them.
  • The author also notes that the results might be different for other copyright industries outside of the music industry.


Policy Implications as Stated By Author

Could be useful for companies to take the results into account and depending on their portfolio either use or not use DMR.

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)?
Green-tick.png
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)
Green-tick.png
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: 634
Level of aggregation: Artist
Period of material under study: 1992-2012


Sample size: 5,864
Level of aggregation: Album
Period of material under study: 1992-2012