Abstract
Despite the problem that filesharing poses to the creative industries, there is little research on the effectiveness of governmental anti‐piracy policies. This study analyzes how the HADOPI graduated response law in France affected digital music sales. Using a panel of sales data from the four major labels, we applied a difference‐in‐difference approach, comparing sales trends in France to a control group of European countries. We find that increased consumer awareness of HADOPI caused French iTunes music sales to increase by 22‐25%. The observed sales increase is larger in high piracy genres than low piracy ones, strengthening the causal interpretation of our results.
Highlights
Since the rise of Napster, ―piracy killed the radio star‖ could be the global slogan of the music industry
We evaluate the effectiveness of HADOPI using a panel of iTunes sales data for the four major music labels (Universal Music, Warner Music, EMI Music and Sony Music) across a broad set of countries
Using Google Trends, we find that public awareness of HADOPI became widespread in Spring 2009, and our difference-in-difference model suggests that HADOPI awareness caused a 22.5% increase in iTunes song unit sales in France, as well as a 25% increase in iTunes album unit sales
Summary
Since the rise of Napster, ―piracy killed the radio star‖ could be the global slogan of the music industry. The vast majority of studies find that piracy has caused a significant decrease in music sales (see for example, Liebowitz (2006), Rob and Waldfogel (2004), Zentner (2006), Hui and Png (2003), OECD (2009)). Academic studies on the effect of piracy suggest that online file sharing can explain anywhere from one fifth to all of the decrease in music industry revenues since. In March 2009 the HADOPI law was presented to the National Assembly, where it was at first supported and rejected in 2009. This debate gave rise to a number of media articles generating awareness and controversy.. This section was amended to require judicial review, and the Constitutional Council accepted the amended law in October 2009, putting the law into effect.
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