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."> 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."> 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 h">
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The Effect of Graduated Response Anti-Piracy Laws on Music Sales: Evidence from an Event Study in France

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  • Brett Danaher
  • Michael D. Smith
  • Rahul Telang
  • Siwen Chen
Abstract
type="main"> 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.

Suggested Citation

  • Brett Danaher & Michael D. Smith & Rahul Telang & Siwen Chen, 2014. "The Effect of Graduated Response Anti-Piracy Laws on Music Sales: Evidence from an Event Study in France," Journal of Industrial Economics, Wiley Blackwell, vol. 62(3), pages 541-553, September.
    • Handle: RePEc:bla:jindec:v:62:y:2014:i:3:p:541-553
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    References listed on IDEAS

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    1. Rob, Rafael & Waldfogel, Joel, 2006. "Piracy on the High C's: Music Downloading, Sales Displacement, and Social Welfare in a Sample of College Students," Journal of Law and Economics, University of Chicago Press, vol. 49(1), pages 29-62, April.
    2. Felix Oberholzer-Gee & Koleman Strumpf, 2007. "The Effect of File Sharing on Record Sales: An Empirical Analysis," Journal of Political Economy, University of Chicago Press, vol. 115(1), pages 1-42.
    3. Rafael Rob & Joel Waldfogel, 2007. "Piracy On The Silver Screen," Journal of Industrial Economics, Wiley Blackwell, vol. 55(3), pages 379-395, September.
    4. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    5. Zentner, Alejandro, 2006. "Measuring the Effect of File Sharing on Music Purchases," Journal of Law and Economics, University of Chicago Press, vol. 49(1), pages 63-90, April.
    6. Brett Danaher & Samita Dhanasobhon & Michael D. Smith & Rahul Telang, 2010. "Converting Pirates Without Cannibalizing Purchasers: The Impact of Digital Distribution on Physical Sales and Internet Piracy," Marketing Science, INFORMS, vol. 29(6), pages 1138-1151, 11-12.
    7. Bhattacharjee, Sudip & Gopal, Ram D & Lertwachara, Kaveepan & Marsden, James R, 2006. "Impact of Legal Threats on Online Music Sharing Activity: An Analysis of Music Industry Legal Actions," Journal of Law and Economics, University of Chicago Press, vol. 49(1), pages 91-114, April.
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