Working Paper Series, Department of Economics, Uppsala University
No 2010:18:
PIRACY, MUSIC, AND MOVIES: A NATURAL EXPERIMENT
Adrian Adermon ()
and Che-Yuan Liang ()
Abstract: Abstract: This paper investigates the effects of illegal
file sharing (piracy) on music and movie sales. The Swedish implementation
of the European Union directive IPRED on April 1, 2009 suddenly increased
the risk of being caught and prosecuted for file sharing. We investigate
the subsequent drop in piracy as approximated by the drop in Swedish
Internet traffic and the effects on music and movie sales in Sweden. We
find that the reform decreased Internet traffic by 18 percent during the
subsequent six months. It also increased sales of physical music by 27
percent and digital music by 48 percent. Furthermore, it had no significant
effects on the sales of theater tickets or DVD movies. The results indicate
that pirated music is a strong substitute for legal music whereas the
substitutability is less for movies.
Keywords: copyright protection; piracy; file sharing; music; movies; IPRE; natural experiment; (follow links to similar papers)
JEL-Codes: D12; K11; K42; M48; (follow links to similar papers)
23 pages, October 28, 2010
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