Music piracy: A case of “The Rich Get Richer and the Poor Get Poorer”

Amedeo Piolatto and Florian Schuett

Information Economics and Policy, 2012, vol. 24, issue 1, 30-39

Abstract: There is evidence that music piracy has differential effects on artists depending on their popularity. We present a model of music piracy with endogenous copying costs: consumers’ costs of illegal downloads increase with the scarcity of a recording and are therefore negatively related to the number of originals sold. Allowing for a second source of revenues apart from record sales, we show that piracy can hurt some artists while benefiting others. Under plausible assumptions, piracy is beneficial to the most popular artists. However, this does not carry over to less popular artists, who are often harmed by piracy. We conclude that piracy tends to reduce musical variety.

Keywords: L82; K42; Piracy; File sharing; BitTorrent; Endogenous download costs (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (7)

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Related works:
Working Paper: A model of music piracy with popularity-dependent copying costs (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:iepoli:v:24:y:2012:i:1:p:30-39

DOI: 10.1016/j.infoecopol.2012.01.002

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