What Can We Learn from Empirical Studies About Piracy?

Abstract

The purpose of this paper is to make an assessment of the empirical literature on the consequence of piracy on the cultural industry. The diversity of data collected and methodology used by empirical studies make the comparison of the literature results difficult. On the one hand some studies seem to have overestimated the impact of digital piracy, due, for example, to the use of Internet access as a proxy for piracy. On the other hand the problem of finding a good instrument to avoid the endogeneity between files illegally downloaded and goods purchased has probably led to an underestimation of the impact of piracy. As a result, the major finding of empirical works about piracy could be the change in the role of industry actors which modify the way cultural goods are consumed and produced. We also discuss the conclusions that can be drawn from the different evolution of the revenue of the music and the movie industry since the appearance of the first P2P network.

Keywords: Piracy, File-sharing, Peer to peer, Cultural industry

JEL Classification: L82, L86, K42