Working Paper: NBER ID: w16507
Authors: Julie Holland Mortimer; Chris Nosko; Alan Sorensen
Abstract: Changes in technologies for reproducing and redistributing digital goods (e.g., music, movies, software, books) have dramatically affected profitability of these goods, and raised concerns for future development of socially valuable digital products. However, broader illegitimate distribution of digital goods may have offsetting demand implications for legitimate sales of complementary non-digital products. We examine the negative impact of file-sharing on recorded music sales and offsetting implications for live concert performances. We find that file-sharing reduces album sales but increases live performance revenues for small artists, perhaps through increased awareness. The impact on live performance revenues for large, well-known artists is negligible.
Keywords: filesharing; concert revenues; album sales; digital distribution; music industry
JEL Codes: L00; L82
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| filesharing (K24) | album sales (Y92) |
| filesharing (K24) | concert revenues for small artists (Z11) |
| increased consumption of recorded music (E20) | higher demand for live performances (L82) |
| reduced profits from recorded music (D33) | concert tours (L82) |
| filesharing (K24) | visibility for small artists (Z11) |
| visibility for small artists (Z11) | concert demand (A32) |
| filesharing (K24) | album sales for large artists (Z11) |