The advent of file sharing has considerably weakened effective copyright protection. Today, more than 60% of internet traffic is made up of consumers sharing music, movies, books and games. Yet, despite its popularity, a recent working paper from the Harvard Business School argues that file-sharing technology has not undermined the incentives of artists and entertainment companies to create market and distribute new works. While policy discussion surrounding file-sharing has largely focused on the legality of the new technology and the question of whether declining sales in music are due to file-sharing, the paper suggests that the debate has been too narrow. The working paper analyzes the landscape and identifies areas for more research.
- Empirical work suggests that in music, no more than 20% of the recent decline in sales is due to sharing.
- Digital technology has lowered the cost of producing movies and music and allowed artists to reach their audience in novel ways. It’s difficult to argue that weaker copyright protection has had a negative impact on artists’ incentives to be creative.
- File-sharing has not discouraged authors and publishers. The publication of new books rose by 66% during 2002-2007. Since 2000, the annual release of new albums has more than doubled, and worldwide feature film production since 2003 is up by more than 30%.
- File-sharing has been shown to increase the demand for complementary goods (such as concerts, electronics, and communications infrastructure) adding to artists' incomes.
Click on the link to read the paper in full (HBS Working Paper Number: 09-132)
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