file sharing and copyright
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This is based on an article that covers sharing of digital files.TRANSCRIPT
File Sharing and CopyrightOBERHOLZER- GEE, F. ; STRUMPF, K
C A P. 2 , P. 1 9 - 5 5 . I N : L E R N E R , J . ; S T E R N , S . P. I N : I N N O VAT I O N P O L I C Y A N D T H E E C O N O M Y. [ S . L . ] : N AT I O N A L B U R E A U O F E C O N O M I C R E S E A R C H U N I V E R S I T Y O F C H I C A G O , V. 1 0 , 2 0 1 0
Apresentação: Gustavo Viegas Rodrigues
File sharing technology x industry sales decline
Empiric research shows that the effect could be up to 20%
The matter of the artist motivation From 2000 to 2009 music production more than doubled, films rose by 30% and books by 66% (2002-7)
File sharing as an stimulus to sell more concert tickets
File sharing and Copyright
“How much weaker the incentives to create new works would be in a regime with more constrained copyright?”
“How producers would respond to weaker incentives. Would they offer fewer works or perhaps works of lesser quality?”
Does file sharing harm sales?
Average iPod -> 3,500 songs* 64% of those songs -> never played!!!
Business Software Alliance -> 1 file downloaded = 1 file not sold. Really?
What about complementing products Mp3 music and iPods
* (Lamere, 2006)
A little History… In the 20s, the music industry tried to block radio set producers…
… and now they pay “jabá”
Also the entertainment industry reacted to the creation of the VCR…
… but they probably didn´t complain against the DVD player or Blu-Ray player because they learnt to make money out of home-movies.
Now, there are ambiguous views about file sharing:
65% didn’t buy an album because they had downloaded it;
But 80% said they’d bought an album because they’d sampled it beforehand!
Key Events on File Sharing
The lawsuit disputes
Based on Sony Betamax decision, P2P services had a chance
Supreme Court ended up overruling the lower instance decision
RIAA decides to stop suing in 2008! The idea was to act on the backstage with ISPs
And then, BitTorrent came up
Data on File Sharing
File Sharing on Internet2*Apr, 2010
* http://netflow.internet2.edu/
Consumer BehaviorSample of ~10k songs
In a sample of ~10k songs:
60% were never downloaded in 17 weeks
81% were downloaded less than 5 x
Global nature of file sharing
Unless industry supports the music launch, downloads won’t pick up
Does file sharing reduce the sale of copyright materials?
Theoretical modeling states that file sharing can either hurt or help producers
Majority of empirical studies indicate that sharing is harmful
Rates range from 3.5% in movies (Rob and Waldfogel, 2007) to 30% in music (Zentner, 2006).
A typical estimate is 20% of displacement
Even the papers that show some loss, it is usual to find subsamples not affected
Challenges on the empirical literature Choice of sample
Measures of piracy
Unobserved heterogeneity
Alternative – Instrumental variable techniques
How important are complementary source of income?
Concerts and merchandising have become an important source of income
8.5 CDs to produce $20 of concert revenue (pre-Napster) vs. 6.4 CDs in 99-02
Concert prices rose above CPI
Not considering only CD sales, the industry is in better shape (07 vs. 97)
CD only = - 15%
CD + Concerts = + 5%
CD + Concerts + iPods = 66%
Does file sharing undermine artistic production?
chance of successful launch is < 1/100
Musicians get $1 or $2 per album sold
Over ¾ of musicians have a non-music related job
Album launches rising – other media too
Does file sharing reduce the sale of copyright materials?
Conclusions
Copyright exists to encourage innovation
Looking only to CD sales is too narrow – what about the total income?
Empiric research is confuse Papers using actual file sharing data suggest that piracy and music sales are largely unrelated
The distribution of impacts of related sales offsetting CD sales decrease is still understudied
The Effect of Digital Sharing Technologies on MusicBHATTACHARJEE,S. , GOPAL, R.D. , LERTWACHARA, K . , MARSDEN, J .R. , TELANG, R.
Apresentação: Gustavo Viegas Rodrigues
Introduction
Is Music sharing harmful or helpful to the music business?
Decline could be a result of both increasing competition for consumer attention and downturn in macroeconomic conditions
Problems of data collection on empirical work
The study
Study: top 100 songs on Billboard chart vs. songs’ downloads on WinMx –
Before mid’98 and after mid’00,
Data collection pre and post that window (95 – 04)
3 time segments
Variables
Debut rank
Artist reputation
Record label
Artist descriptors
Study objectives
Assess impact of market technological developments on music sales
Evaluate impact of P2P sharing on album’s survival on the chart
“Does the level of sharing of sharing influence survival time on the
charts?”
Influences of key
explanatory variables
Analysis of gender effect
Isolation of sharing
on albums survival
length
Related Literature
Nature of music as an experience good
Sampling and experiencing prior to purchase can leverage sales
Number of albums released every year and odds of success
Related to search costs of new artists
Learning process reinforce the trend to like popular artists
Larger recording labels – larger support
“Bandwagon effect” – the more on top, the better
Modelling
Ordinary Least Squares (OLS) regression
One equation for album survival
Another for impact of sharing on survival
Authors decided to twitch the formula due to strong correlation of sharing with unmeasurable data
Use of instruments to consider RIAA decision in Jun’03
Data
34 weeks
Each album was tracked until its drop-off the list
Start date of measurement:
Survival
Debut rank
Debut post-TS
Albums released
Superstar
Minor Label
Soloa Male
Solo Female
Group
Holiday_month Debut
Data set 1
14 to 10 weeks
49 to 40
Data set 2 Analysis is focused on sharing levels of each album during its debut week
Two alternative measures of sharing: Share_debut
Share_max
Album SurvivalResults – without interaction
Each unit change in rank on debut adds 1.98% less
chance of survival
35% more
chance of
survival23% less chance
of survival
vs. major
Album survivalResults – with interactions
The effect on survival gets more dramatic as the debut rank grows.
Analysis of sharing on survivalResults without instrument
It would seem that Shares_max leads to longer survival
Analysis of sharing on survivalResults with instrument
When measure Feb-May vs. July-Oct survival times, there was no significant difference
The RIAA announcement proved to be a highly influential variant, confirming the results of 80% less sharing after it came up
Debut rank again came significant
Sharing didn’t come significant (although negative)
Analysis of sharing on survivalResults with instrument + 2 additional regressions
Coefficients on the regression instruments (RIAA announcement indicator & RIAA announcement indicator x debut ranks) are highly significant
Again top albums are not negatively affected by sharing
The effect of sharing is more negative for numerically higher ranked albums
Impact of sharing on survival
Higher survival for higher debut ranksHigh = 5.12
Mid = 3.12
Low = 1.12
Mean survival timeHigh debut rank (>20) = from 2.92 to 4.7 weeks (!!!!!!)
Low debut rank (<=20) = from 13.11 to 13.65 weeks
Conclusions – 1/2
Debut rank impacts survival
Survival time drops 42% after controlling other variables (although the above prevails)
Superstar’s albums survive 35% more on the Top100
Female artists survive longer
Albums promoted by major labels survive longer
Conclusions – 2/2
There was a significant decrease on sharing after the RIAA announcement
The estimated effect of sharing is worse for less popular albums (lower on charts)
The research only considers tracking an album when it reached the Top100. Sharing prior to that could have an effect not considered
OBRIGADO!