|Title:||Superstars vs the long tail: How does music piracy affect digital song sales for different segments of the industry?|
|Citation:||Savelkoul, R. (2020). Superstars vs the long tail: How does music piracy affect digital song sales for different segments of the industry?. Information Economics and Policy, 50, 100847.|
|Link(s):||Definitive , Open Access|
|Key Related Studies:|
|About the Data|
|Data Description:||A dataset of weekly digital song downloads in French, Belgian and Dutch market between 2008 and 2012 is obtained from Nielsen.|
|Data Type:||Secondary data|
|Secondary Data Sources:|
|Data Collection Methods:|
|Data Analysis Methods:|
|Cross Country Study?:||Yes|
|Government or policy study?:||No|
|Time Period(s) of Collection:||
This paper estimates the causal effect of illegal downloading on recorded music sales volumes. We explicitly allow for differing effects of piracy on superstars versus other songs (i.e. songs or artists that are respectively ranked at the top or lower in the sales distribution), with an extension about product variety. We use a difference-in-difference approach, exploiting the natural experiment of the introduction of the HADOPI anti-piracy law in France in 2009, using Belgium and the Netherlands as a control group. We find a positive effect on music sales after the introduction of the law, thus implying a negative effect of music piracy. The effect is greater for top selling songs compared to lower ranked songs. It is stronger shortly after the introduction of the law and diminishes in later periods for all songs except the top sellers or superstars. After the introduction of the law, consumption became more concentrated in terms of musical genre and style, indicating that piracy increases consumed product variety.
Main Results of the Study
The music sales significantly increase by 38% after the introduction of the law. The effect is greater for top selling songs (45% sales increase) compared to lower ranked songs (31% to 36% sales increase). It is stronger shortly after the introduction of the law and diminishes in later periods for all songs except the top sellers or superstars. After the introduction of the law, consumption became more concentrated in terms of musical genre (HHI increase of 1.3%) and style (HHI increase of 0.5%). Particularly, the concentration seems to increase mainly in genres that are likely to be popular on piracy websites, such as Pop and Hip Hop.
Policy Implications as Stated By Author
Deterring piracy by strengthening laws against copyright infringement is dubious due to several reasons: (1) we are not taking into account revenues from live performances of music; (2) the deterring effects vary in a long term; (3) the implementation and enforcement of HADOPI was very costly and individuals who were informed about the law and piracy alternatives, were able to substitute away from monitored networks and find desired illegal content elsewhere.
Coverage of Study
|Level of aggregation:||macro country level data|
|Period of material under study:||2008, 2012|