Piracy on the High Cs
p2pnet.net News:- There’s a new study with, “estimates of sales displacement induced by downloading using both OLS and an instrumental variables approach using access to broadband as a source of exogenous variation in downloading”.
Roughly translated, that means the report has data on how downloading music files might affect corporate music sales.
“Each album download reduces purchases by about 0.2 in our sample,” says Piracy on the High C’s: Music Downloading, Sales Displacement, and Social Welfare in a Sample of College Students.
“Our valuation data allow us to measure the effects of downloading on welfare as well as expenditure in a subsample of Penn undergraduates, and we find that downloading reduces their per capita expenditure (on hit albums released 1999-2003) from $126 to $100 but raises per capita consumer welfare by $70,” it says, inserting welfare issues into file sharing.
The sample comprised 412 Penn U students.
Penn was the first major US university to enthusiastically enter into the entertainment industry’s scheme to turn American institutions of higher learning into combined record label police and sales and marketing units.
Penn presidents Graham Spanier serves alongside RIAA (Recording Industry Association of America) president Cary Sherman as co-chairman of Hollywood’s Joint Committee of the Higher Education and Entertainment Communities.
Barry K. Robinson, the RIAA’s senior counsel for corporate affairs who deals with “day-to-day” legal matters for the association, including trademark violations, is a Penn State trustee.
And there are other interesting connections between Penn and the entertainment industry.
The report comes at a time when Big Music record label cartel claims that its legal war against file sharers is significantly reducing downloads are being regularly debunked, and the cartel’s own figures show sales are very healthy indeed, its assertions to the contrary notwithstanding.
Piracy on the High C’s is from the National Bureau of Economic Research and was written by two Penn State professors – Rafael Rob and Joel Waldfogel.
Interestingly, Waldfogel recently suggested it’s time for the music industry to come up with new business models.
“Instead of putting out CDs and shipping them on trucks, they can send them directly at a very low cost,” he’s quoted as saying in Wharton’s The Beat Goes On: This Recording Industry Bill Would Trap More than Just Illegal File-sharers, a critique of Hollywood’s INDUCE Act.
“That does suggest a very different business model than charging $15 or $20 for a CD. It might be a much more attractive way to do things. Stuff that is easy to distribute wants to be free. Given that force, I think [the recording industry] needs to come up with a new model for generating revenue.”
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See:-
new business models – The Beat Goes On: This Recording Industry Bill Would Trap More than Just Illegal File-sharers, Public Policy and Management, Wharton, November, 2004
November 9th, 2004 at 10:56 pm
It should be noted that the so-called “National Bureau of Economic Research” (which sponsored this study) is not, as its name would suggest, a US government agency.
It is, in fact, an extreme right-wing “think tank” dedicated to promoting conservative causes. That alone should make anyone reading about this study dubious of its results.
More details about NBER can be found here:
http://www.disinfopedia.org/wiki.phtml?title=National_Bureau_of_Economic_Research