Bounie, Bourreau and Waelbroeck (2007)
|Bounie, Bourreau and Waelbroeck (2007)|
|Title:||Pirates or explorers? Analysis of music consumption in french graduate schools|
|Author(s):||Bounie, D., Bourreau, M., Waelbroeck, P.|
|Citation:||Bounie, D., Bourreau, M., & Waelbroeck, P. 2007. Pirates or explorers? Analysis of music consumption in French graduate schools. Brussels Economic Review, 50(2), 167-192.|
|Link(s):||Definitive , Open Access|
|Key Related Studies:|
|About the Data|
|Data Description:||An anonymous online survey was administered in two French graduate schools from May 26 to June 3, 2004. The questionnaire included thirty six closed questions divided in six main parts: information on the respondent (school, sex and age), Internet access, music consumption, MP3 exchanges, MP3 uses and opinion on downloading. Overall, 574 people answered the questionnaire.|
|Data Type:||Primary data|
|Secondary Data Sources:|
|Data Collection Methods:|
|Data Analysis Methods:|
|Cross Country Study?:||No|
|Government or policy study?:||No|
|Time Period(s) of Collection:||
This paper analyzes the impact of music file sharing on CD purchases. Traditionally, two arguments are opposed concerning the impact of music file sharing on CD sales. On the one hand, MP3 downloads only reduces sales of legitimate CDs (the "competition effect"). On the other hand, consumption of free MP3s could lead people to buy CD which they would never have bought otherwise (the “sampling effect”). Because the court in the Napster case and some academic researchers have dismissed this sampling effect, this article seeks to assess whether sampling does indeed occur and in the affirmative what are the relative contributions of the positive sampling and the negative competition effects of MP3 files on CD purchases. To do so, we administered an anonymous online survey in two French graduate schools from May 26 to June 3, 2004. We find that there are two populations: explorers and pirates. For the explorers, MP3 downloading from P2P networks has a positive impact on CD consumption. For the pirates, anonymous file-sharing on the internet and intranets has a negative effect on CD consumption, while physical exchanges have a positive effect.
Main Results of the Study
- This study shows that there are two populations of MP3 users: people who use MP3s to discover new music through file-sharing networks, which leads them to purchase more CDs (the explorers) and people who mainly use file-sharing networks as substitutes to regular CDs (the pirates).
- New business models should discriminate between these two types of users of digital music in order to extract more surplus from the true music fans. There are already some initiatives which allow internet users to download an unlimited amount of music files for a monthly fee or match filesharing users to new artists. New tracking software also expands the space of products of which internet users are aware.
- File-sharing technologies have amplified consumption patterns in the sense that music fans have used MP3 to discover new music and increase their consumption of pre-recorded music while people with low willingness to pay for music have used MP3 files as direct substitutes to legal purchases.
Policy Implications as Stated By Author
The estimation results have two implications. First, new business models should try and better discriminate between these two types of users of digital music in order to extract more surplus from the true music fans. Secondly, new business models should also encourage the formation of online communities as our results suggest that people who share music through personal contacts among a community have a higher probability to purchase more CDs.
Coverage of Study
|Level of aggregation:||Individual|
|Period of material under study:||2004|