Pirates or Explorers? Analysis of Music Consumption in French Graduate Schools

Telecom Paris Economics Working Paper No. EC-05-01

29 Pages Posted: 9 Jun 2005

See all articles by David Bounie

David Bounie

Telecom ParisTech

Marc Bourreau

Telecom ParisTech; CREST

Patrick Waelbroeck

Telecom ParisTech

Date Written: June 2005

Abstract

This paper analyzes the impact of music file sharing on CD purchases. Traditionally, two arguments are opposed concerning the impact of music file sharing on CD sales. On the one hand, MP3 downloads only reduces sales of legitimate CDs (the competition effect). On the other hand, consumption of free MP3s could lead people to buy CD which they would never have bought otherwise (the "sampling effect"). Because the court in the Napster case and some academic researchers have dismissed this sampling effect, this article seeks to assess whether sampling does indeed occur and in the affirmative what are the relative contributions of the positive sampling and the negative competition effects of MP3 files on CD purchases. To do so, we administered an anonymous online survey in two French graduate schools from May 26 to June 3, 2004. We find that there are two populations: explorers and pirates. For the explorers, MP3 sharing through physical contacts has a positive impact on CD consumption. For the pirates, anonymous file-sharing on the internet and a large number of MP3 files have a negative effect on CD consumption.

Keywords: Internet, Peer-to-Peer, File sharing, Piracy, Music, Students

JEL Classification: L82, L86

Suggested Citation

Bounie, David and Bourreau, Marc and Waelbroeck, Patrick, Pirates or Explorers? Analysis of Music Consumption in French Graduate Schools (June 2005). Telecom Paris Economics Working Paper No. EC-05-01. Available at SSRN: https://ssrn.com/abstract=739284 or http://dx.doi.org/10.2139/ssrn.739284

David Bounie (Contact Author)

Telecom ParisTech ( email )

46 rue Barrault
F-75634 Paris, Cedex 13
France

Marc Bourreau

Telecom ParisTech ( email )

46, rue Barrault
Paris Cedex 13, F-75634
France

CREST

15 Boulevard Gabriel Peri
Malakoff Cedex, 1 92245
France

Patrick Waelbroeck

Telecom ParisTech ( email )

46 rue Barrault
F-75634 Paris, Cedex 13
France

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