Waldfogel (2012)

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

Waldfogel (2012)
Title: Copyright Protection, Technological Change, and the Quality of New Products: Evidence from Recorded Music since Napster
Author(s): Waldfogel, J.
Year: 2012
Citation: Waldfogel, J. (2012). Copyright Protection, Technological Change, and the Quality of New Products: Evidence from Recorded Music since Napster. Journal of Law and Economics, 55(4), 715-740.
Link(s): Definitive
Key Related Studies:
Discipline:
Linked by: Peukert, Claussen and Kretschmer (2015), Raustiala and Sprigman (2019)
About the Data
Data Description: The basic data for constructing the critic-based index are professional critics’ retrospective rankings of songs and albums from multiple years, such as best-of-the-decade lists.
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:
  • Not stated
Funder(s):
  • Not stated

Abstract

While some recent technological changes reduced revenue for digital products, other changes reduced the costs of bringing creative works to market. Therefore, we do not know whether copyright protection now provides weaker incentives to bring forth new products. This paper assesses the quality of new recorded music since Napster was established in 1999. First, I create an index of high-quality music from critics’ retrospective lists. Next, I rely on music sales and airplay data, using the idea that if one vintage’s music is better than another’s, its superior quality should generate higher sales or greater airplay through time, after accounting for depreciation. I find no evidence of a reduction in the quality of music released since 1999, and the two usage-based indices suggest an increase since then. Researchers and policy makers thinking about the strength of copyright protection should supplement their attention to producer surplus with concern for consumer surplus.

Main Results of the Study

  • While it may be true that the recording industry has experienced substantial declines in its revenue and perhaps its profitability as well since the introduction of Napster, there is no evidence that the quality of new recorded music has suffered from a withdrawal of creative effort.
  • While the supply of new music appears robust despite changes in technology, it is difficult to say whether this finding carries over to other contexts,such as motion pictures, in which bringing products to market is far more costly.
  • Much of the debate about appropriate copyright in the digital era has focused on the effect of Napster on firms' revenue. However, emerging results suggests that research should also focus on producer surplus in creative industries.


Policy Implications as Stated By Author

Emerging results on the continued availability of new recorded music products suggest that policy makers thinking about the strength of copy-right protection should supplement their attention to producer surplus in creative industries with a concern for consumer surplus as well.


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)
Green-tick.png
Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)
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)
Green-tick.png
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)

Datasets

Sample size: 88
Level of aggregation: Music critics' rankings
Period of material under study: 1960-2010

Waldfogel, J., (2012). Copyright Protection, Technological Change, and the Quality of New Products: Evidence from Recorded Music since Napster, Journal of Law and Economics, 55(4), 715-740 [1]


Abstract: While some recent technological changes reduced revenue for digital products, other changes reduced the costs of bringing creative works to market. Therefore, we do not know whether copyright protection now provides weaker incentives to bring forth new products. This paper assesses the quality of new recorded music since Napster was established in 1999. First, I create an index of high-quality music from critics’ retrospective lists. Next, I rely on music sales and airplay data, using the idea that if one vintage’s music is better than another’s, its superior quality should generate higher sales or greater airplay through time, after accounting for depreciation. I find no evidence of a reduction in the quality of music released since 1999, and the two usage-based indices suggest an increase since then. Researchers and policy makers thinking about the strength of copyright protection should supplement their attention to producer surplus with concern for consumer surplus.


Propositions

- There is no evidence of a reduction in the quality of music released since 1999, when the music-sharing system Napster introduced, while the two usage-based indices suggest an increase since then.

Method

- Quantitative analysis: regression analysis

Discipline

- Law and economics

Data

- Large-scale dataset on recorded music releases since 1960, radio airplay data

Interventions-Response

- Future policies could relax copyright protection in digital economies without harming creators’ incentives but more evidence is required on this.

- Potential welfare gains especially if policies that relax copyright protection are combined with other non-IP policies successfully.