|Title:||Music sales in the age of file sharing|
|Author(s):||Boorstin, E. S.|
|Citation:||Boorstin, E. S. Music Sales in the Age of File Sharing (Doctoral dissertation, Princeton University).|
|Link(s):||Definitive , Open Access|
|Key Related Studies:|
|Linked by:||Liebowitz (2006b)|
|About the Data|
|Data Description:||Data on population age, income, household size, and Internet access were drawn from the Census Bureau’s Current Population Survey (CPS).The three surveys used for my model were conducted in December 1998, August 2000, and September 2001. Each CPS survey contained about 50,000 households, which provided data for a total of 387,980 people.
Data on CD sales came from Neilson SoundScan, which tracks virtually all prerecorded music that is distributed in the United States. SoundScan collects weekly point of-sale data from over 14,000 retail stores, mass retailers, Internet sites, and mail order and concert venues.SoundScan provided me with yearly CD sales in the 100 largest U.S. metropolitan areas from 1997 to 2002.
|Data Type:||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:||
In this paper I examine the effect of Internet access on compact disc sales. I combine U.S. census data on population characteristics with Nielson SoundScan data on CD sales for 99 metropolitan areas in the years 1998, 2000, and 2001. Controlling for year, income, and the fixed effects within each area, I estimate the relationship between Internet access and CD sales for four age groups. Overall, Internet access has a positive and statistically significant effect on CD sales. For children aged 5 to 14, Internet access has a negative but statistically insignificant effect on CD sales. For youths aged 15 to 24, Internet access has a negative and statistically significant effect on CD sales. And for the adult groups aged 25 to 44 and aged 45 and older, Internet access has a significant positive effect. My findings suggest that file sharing is not the cause of the recent decline in record sales, and that file sharing decreases the record purchases of younger people while increasing the purchases of older people.
Main Results of the Study
- Overall, Internet access has a positive and statistically significant effect on CD sales.
- For children aged 5 to 14, Internet access has a negative but statistically insignificant effect on CD sales.
- For youths aged 15 to 24, Internet access has a negative and statistically significant effect on CD sales.
- And for the adult groups aged 25 to 44 and aged 45 and older, Internet access has a significant positive effect.
- File sharing is not the cause of the recent decline in record sales, and that file sharing decreases the record purchases of younger people while increasing the purchases of older people.
Policy Implications as Stated By Author
- Internet access has a negative impact on the purchases of young people and a positive impact on the purchases of old people.
- This suggests that the impact of file sharing on CD sales is negative for young people, but positive for old people, since file sharing is the primary way that Internet access relates to CD sales. The overall effect of Internet access on CD sales is positive.
- Results strongly suggest that file sharing does not have a negative aggregate effect on CD sales, and certainly not a large enough effect to explain the current decline in record sales.
- Even if the RIAA’s lawsuits against file sharers successfully deter people from sharing music over P2P networks, it would not be expected to see a short term increase in sales.
- If the older demographic is more responsive to the threat of legal action than the younger demographic, the lawsuits would even tend to decrease sales in the short run. Lawsuits are part of the RIAA’s long-term strategy to eliminate the culture of free music, but they risk driving away people who use file sharing to sample new music.
- Research has shown that different demographic groups respond differently to file sharing. Since so much of the file sharing debate has focused on the behavior of students, it would be interesting to study the effect of Internet access on their predicted purchases.
Coverage of Study
|Level of aggregation:||DMA|
|Period of material under study:||1997 - 2002|
|Level of aggregation:||Individual|
|Period of material under study:||1998,2000,2001|