Montoro-Pons and Cuadrado-García (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

Montoro-Pons and Cuadrado-García (2006)
Title: Digital goods and the effects of copying: an empirical study of the music market
Author(s): Montoro-Pons, J. D., Cuadrado-García, M.
Year: 2006
Citation: Montoro-Pons, Juan D., and Manuel Cuadrado-García. "Digital goods and the effects of copying: an empirical study of the music market." 14th International Conference on Cultural Economics, Vienna. 2006.
Link(s): Definitive , Open Access
Key Related Studies:
Discipline:
Linked by:
About the Data
Data Description: Given the nature of our analysis we need to compile information about the phonographic industry: data on legal and illegal demand and average prices for music recordings will be used. We also need data on the illegal market costs, which we will relate to institutional as well as technological factors. Finally we will use other general data such as per capita GDP or hardware availability.
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:
  • 2003-2004
Funder(s):

Abstract

Digital goods, streams of information stored in bits with economic value, have transformed the way many economic agents interact in markets and specially those in the cultural sector. The non-rival nature of its consumption has had a significant impact in different industries, specially the music industry: record labels have witnessed in the last decade a proliferation of the means to circumvent copyright in protected materials. This paper aims at assessing the impact of piracy on legal demand. Unlike previous studies we address the issue from a wider perspective, considering both physical and online piracy. Our findings show that there is a substitution effect between copies and originals, and that there is no significant positive effect of piracy on legal demand, which rules out the possibility of network effects or sampling effects much discussed in the literature on piracy. Moreover we find that lost sales amount to a 131% of the legal market on the average, even though there is a wide variation between countries.

Main Results of the Study

  • Both physical and online piracy substitute legal demand, hence reducing consumption of original recordings.
  • The authors find no evidence, so far, of any positive impact of either file-sharing or physical piracy on demand.
  • When it comes to assess the economic impact of piracy, they find that average losses amount to a 131% of the

legal market, although these are subject to a high variability.


Policy Implications as Stated By Author


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)
Green-tick.png
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: 60
Level of aggregation: Country
Period of material under study: 2003-2004