Music piracy: Bad for record sales but good for the iPod?

Tin Cheuk Leung ()

Information Economics and Policy, 2015, vol. 31, issue C, 1-12

Abstract: Music piracy is a double-edged sword for the music industry. On the one hand, it hurts record sales. On the other hand, it increases sales of its complements. To quantify the effect of music piracy, I construct a unique survey data set and use a Bayesian method to estimate the demand for music and iPods, and find three things. First, music piracy decreases music sales by 24% to 42%. Second, music piracy contributes 12% to iPod sales. Finally, counterfactual experiments show that, if music were free, the increase in Apple’s profits from iPod can more than compensate the loss of musicians. The last result implies that a Pareto improving iPod tax is possible.

Keywords: K42; L82; O34; Demand estimation; iPod; Music piracy (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Working Paper: Music Piracy: Bad for Record Sales but Good for the iPod? (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:iepoli:v:31:y:2015:i:c:p:1-12

DOI: 10.1016/j.infoecopol.2015.04.001

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