Chapter 23: Internet piracy: the estimated impact on sales
Restricted access

Fifteen years ago the term ëfile-sharingí was unknown. Then Napster arrived in the second half of 1999 and grew to be an international sensation during 2000. The sound recording industry experienced a dramatic swoon in sales beginning in 2000, continuing unabated (with one informative exception) through 2010. The industry has blamed this sales decline on the rapid growth of file-sharing. Although Napster was effectively shut down as an unauthorized file-sharing service within two years of its birth, its progeny live on, as do new habits developed by music listeners. Shortly after Napsterís arrival, economists began to examine the likely impacts of file-sharing on the sound recording market. Further, as faster download speeds and the invention of BitTorrent allowed file-sharing to expand into movies, the impact of file-sharing on the movie industry also became a question that economists tried to answer. Although it is clear that pirated versions of products often substitute for the purchase of an original, and this effect is unambiguously harmful to the industry, there are other, more subtle effects possibly at work, as well. Piracy could allow a consumer to discover new songs that then induce the consumer to go purchase an album that might otherwise have not been purchased, for example. This ësamplingí effect, first proposed in Liebowitz (1985), makes the theory of piracy somewhat ambiguous.

You are not authenticated to view the full text of this chapter or article.

Access options

Get access to the full article by using one of the access options below.

Other access options

Redeem Token

Institutional Login

Log in with Open Athens, Shibboleth, or your institutional credentials

Login via Institutional Access

Personal login

Log in with your Elgar Online account

Login with you Elgar account
Handbook