Friends or foes? A meta-analysis of the relationship between “online piracy” and the sales of cultural goods

Abstract

Economic theory posits that consumers’ response to technological innovations in distribution of cultural goods may have both positive and negative effects on the sales of these goods. Access to unauthorized cultural content – often referred to as “online piracy” – may reduce demand for the authorized distribution through substitution or raise it (through complementarity and similar effects). The empirical evidence speaks to both positive and negative correlation between unauthorized distribution and authorized sales. We review and discuss the accomplishments in the field so far and provide a quantitative analysis of the empirical literature, the meta-analysis. While numerous and interesting measures and methods have been developed, estimating reliable causal effect remains a challenge. There are also substantial differences between film and music industry. On the whole the literature fails to reject the null hypothesis of no effects on sales.