|Title:||Does file sharing reduce music CD sales?: A case of Japan version 0.1|
|Citation:||Tanaka, T. (2004, December). Does file sharing reduce music CD sales?: A case of Japan version 0.1. In Conference on IT innovation.|
|Key Related Studies:|
|Linked by:||Fukugawa (2011)|
|About the Data|
|Data Description:||This article used used micro data of CD sales and correlative download numbers in Japan collected every week from June 2004 to November 2004. Field survey data obtained from questionnaires completed by 501 sample students chosen from an undergraduate course at Keio University in 2003 and 2004 was also used. The total number of survey observations was 2165. Students were asked to recall their CD purchase history and file sharing and copied CD activity.|
|Data Type:||Primary and Secondary data|
|Secondary Data Sources:|
|Data Collection Methods:|
|Data Analysis Methods:|
|Cross Country Study?:||No|
|Government or policy study?:||No|
|Time Period(s) of Collection:||
File sharing systems such as Napster and KaZaA are accused by the recording industry of causing declines in sales of music CDs, and recently users of these systems are under lawsuit attack. However, there is not sufficient evidence that file sharing systems are responsible for the recent decline in music CD sales. Two previous studies examined micro data of sales and downloads and found mixed results regarding the connection between file sharing and CD sales (Blackburn, 2004; Oberholzer and Strumpf, 2004).
The current essay estimated the effect of file sharing systems on music CD sales using micro data from Japan in 2004. Japan’s file sharing system (“Winny”) is almost completely decentralized and highly anonymous compared with ones addressed in the two previous studies, thus Japanese users can download music files with less concern about lawsuits. The goal of this research is to examine the effect of file sharing on music CD sales in such an illegal-copy-friendly file sharing system.
Based on micro data of CD sales and numbers of downloads, we found that there was very little evidence that file sharing reduces music CD sales in Japan. We controlled simultaneous bias between sales and downloads by instrumental variables, but did not find correlation between CD sales and numbers of downloads. Although there were large differences in the numbers of downloads among CD titles, these differences did not affect CD sales. We also carried out a user survey on file sharing and CD purchases with consideration to the potential bias of respondents trying to understate their illegal copying activity. This survey also showed that file sharing had very limited influence on CD purchases.
Main Results of the Study
Japanese file sharing system: "Winny" allows users to download illegal music files anonymously and free of charge. This study examined the extent of any correlation between the use of Winny and legitimate music CD sales in Japan. The study also examined the existence of any correlation between the file sharing activity of Japanese students and their purchase of legitimate music CDs. Despite prevalent recording industry concern, it is concluded that the use of file sharing systems has no discernible negative effect on CD music sales and specifically:
- There is very little evidence to suggest that file sharing systems reduce sales of legitimate CDs in Japan;
- Student surveys did not show any negative relationship between respondent use of file sharing systems and propensity to make legitimate CD purchases;
- Use of file sharing software by students may in fact increase their propensity to purchase legitimate music CDs.
Policy Implications as Stated By Author
Because the use of file sharing software does not decrease creator revenues obtained from the sale of legitimate music CDs and increases user benefit, we should say that file sharing increases the total benefit. Accordingly bans imposed on file sharing software by policy makers should be blocked from the perspective of economic welfare.
Coverage of Study
|Level of aggregation:||University students|
|Period of material under study:||2003 - 2004|