We extend the Gayer-Shy (2005) approach and outline a theoretical model with typical characteristics of contemporary music markets in which record sales and life performances are two fundamental components of industry profits and illegal recording has positive effects on the second source of revenues. We show how (cross-sectional) network externalities and (intertemporal) "Proustian" effects (emotional quasi rents of adult consumers generated by "musical imprinting" when they were young) enhance the conflict of interest on piracy repression between artists and record publishers. Endogenisation of the bargained property right shares and of the penalty for piracy shows that, under reasonable parametric conditions, the absence of piracy repression maximizes total industry profits. We finally show that the conflict of interest on piracy may be solved via diversification of the record publisher revenues through his participation to live performance profits, or entry into the market of new products, such as hardware music players, which are complement to (legal and illegal) downloading.

Becchetti, L., & Eleuteri, S. (2006). Piracy repression and “Proustian” effects in popular music markets.

Piracy repression and “Proustian” effects in popular music markets

BECCHETTI, LEONARDO;
2006-10

Abstract

We extend the Gayer-Shy (2005) approach and outline a theoretical model with typical characteristics of contemporary music markets in which record sales and life performances are two fundamental components of industry profits and illegal recording has positive effects on the second source of revenues. We show how (cross-sectional) network externalities and (intertemporal) "Proustian" effects (emotional quasi rents of adult consumers generated by "musical imprinting" when they were young) enhance the conflict of interest on piracy repression between artists and record publishers. Endogenisation of the bargained property right shares and of the penalty for piracy shows that, under reasonable parametric conditions, the absence of piracy repression maximizes total industry profits. We finally show that the conflict of interest on piracy may be solved via diversification of the record publisher revenues through his participation to live performance profits, or entry into the market of new products, such as hardware music players, which are complement to (legal and illegal) downloading.
Settore SECS-P/02 - Politica Economica
en
music industry
piracy
Becchetti, L., & Eleuteri, S. (2006). Piracy repression and “Proustian” effects in popular music markets.
Becchetti, L; Eleuteri, S
Altro
File in questo prodotto:
File Dimensione Formato  
243.pdf

accesso aperto

Dimensione 210.07 kB
Formato Adobe PDF
210.07 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/2108/295
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
social impact