Abstract

http://ssrn.com/abstract=1381827
 
 

References (34)



 
 

Citations (8)



 


 



Converting Pirates Without Cannibalizing Purchasers: The Impact of Digital Distribution on Physical Sales and Internet Piracy


Brett Danaher


Wellesley College - Department of Economics

Samita Dhanasobhon


Carnegie Mellon University

Michael D. Smith


Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Rahul Telang


Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

March 3, 2010


Abstract:     
The availability of digital channels for media distribution has raised several important questions for marketers, notably whether digital distribution channels will cannibalize physical sales and whether legitimate digital distribution channels will dissuade consumers from using (illegitimate) digital piracy channels. We address these two questions using the removal of NBC content from Apple’s iTunes store in December 2007, and its restoration in September 2008, as natural shocks to the supply of legitimate digital content, and analyzing its impact on demand through BitTorrent piracy channels and the Amazon.com DVD store.

To do this we collect two large datasets from Mininova and Amazon.com documenting levels of piracy and DVD sales for both NBC and other major networks’ content around these events. We analyze this data in a difference-in-difference model and find that NBC’s decision to remove its content from iTunes in December 2007 is causally associated with an 11.2% increase in the demand for pirated content. This is roughly equivalent to an increase of 49,000 downloads a day for NBC's content and is approximately twice as large as the total legal purchases on iTunes for the same content in the period preceding the removal. We also find evidence of a smaller, and statistically insignificant, decrease in piracy for the same content when it was restored to the iTunes store in September 2008. Finally, we see no change in demand for NBC’s DVD content at Amazon.com associated with NBC’s closing or reopening of their digital distribution channel on iTunes.

Number of Pages in PDF File: 42

Keywords: digital distribution, channel conflict, cannibalization, iTunes, DVD

JEL Classification: L1, M2, M3

working papers series


Download This Paper

Date posted: April 16, 2009 ; Last revised: June 19, 2014

Suggested Citation

Danaher, Brett and Dhanasobhon, Samita and Smith, Michael D. and Telang, Rahul, Converting Pirates Without Cannibalizing Purchasers: The Impact of Digital Distribution on Physical Sales and Internet Piracy (March 3, 2010). Available at SSRN: http://ssrn.com/abstract=1381827 or http://dx.doi.org/10.2139/ssrn.1381827

Contact Information

Brett Danaher
Wellesley College - Department of Economics ( email )
106 Central Street
Wellesley, MA 02181
United States
HOME PAGE: http://www.wellesley.edu/Economics/bdanaher/
Samita Dhanasobhon
Carnegie Mellon University ( email )
Pittsburgh, PA 15213-3890
United States
Michael D. Smith (Contact Author)
Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )
Pittsburgh, PA 15213-3890
United States
HOME PAGE: http://www.heinz.cmu.edu/~mds
Rahul Telang
Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )
4800 Forbes Ave
Pittsburgh, PA 15213-3890
United States
412-268-1155 (Phone)
Feedback to SSRN


Paper statistics
Abstract Views: 5,673
Downloads: 1,146
Download Rank: 8,910
References:  34
Citations:  8

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo6 in 0.344 seconds