How Bad Is Music File Sharing? – Part 5

Liebowitz tried to provide theoretical evidence in several papers (2002, 2003, 2005) that there is negative impact of P2P file sharing on record sales. The most elabatored paper is his article in the Journal of Law and Economics, which fused earlier research on this topic (Liebowitz 2006). Liebowitz’s arguments are based on microeconomic theory and he identifies four effects of file sharing that might have an impact on record sales: substitution, sampling/exposure/penetration, network effects and indirect appropriability. Liebowitz analyses all four effects and concludedthat the substitution effect is dominant over the sampling effect, which can be also negative under specific circumstances. All other effects that are positively correlated with record sales are negligible. Further, he investigated other factors that might affect record sales, but none of them are able to explain the decrease of record sales in the past 10 years.

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The first “Vienna Music Business Research Days” in retrospective

At the first “Vienna Music Business Research Days” from June 9-10, 2010 at the University of Music and Performing Arts Vienna, economists and music professionals focused on music file sharing as well as on content flat rate models (“cultural” flat rate). In workshops, key notes and panel discussions recent research results were presented and controversially discussed.  

List of participants in alphabetical order: Electric Indigo (DJ & musician, Vienna), Eric Garland (CEO BigChampagne, Los Angeles), Philip Ginthör (General Manager Sony Music Entertainment Austria, Vienna), Peter Jenner (music manager and music producer, London), Stan J. Liebowitz (Professor, University of Texas at Dallas), Richard Mollet (The British Recorded Music Industry – BPI, London), Felix Oberholzer-Gee (Professor, Harvard Business School), Peter Tschmuck (Professor, University of Music and Performing Arts, Vienna), Carsten Winter (Professor, University of Music and Drama, Hannover).