Academic Studies on the Effect of File-Sharing on the Recorded Music Industry: A Literature Review
Volker Ralf Grassmuck
Leuphana Universität Lüneburg - Centre for Digital Cultures; Humboldt University of Berlin - Faculty of Mathematics and Natural Sciences
May 14, 2010
Is file-sharing responsible for the slump in recorded music sales or does it create demand? The empirical research literature is inconclusive. What has clearly emerged is that there are a number of different dynamics at work, yielding a mixed result with respect to album sales, a likely positive result for the music industry as a whole through gains in concert and merchandising revenues, and a clearly positive effect on social welfare through improved market chances for non-star music, greater cultural diversity and increased consumer surplus. While the nearly eighty empirical studies under review cannot support allegations by IFPI that illegal file-sharing has been a major factor in the decline in music sales, they do show trends in the music sector and raise questions about the economic rationality of the current copyright regime.
Number of Pages in PDF File: 50
Keywords: economics, methodology, creativity, culture industries, record industry, concerts, file-sharing, peer-to-peer, substituion, discovery, social welfare, cultural diversity, DRM, IFPI
JEL Classification: D12, L82
Date posted: April 26, 2011
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