On the impact of digital music distribution

Illtae Ahn, Kiho Yoon

Research output: Contribution to journalArticle

8 Citations (Scopus)

Abstract

We present a framework to evaluate the impact of digital music distribution. We set up a representative model that enables the comparative static analysis. We then interpret two empirical observations about the music industry, the sales decline and the price constancy, and fit the model to these observations. We find that, while the impact of digitalization on the producers' profits is probably negative, it may not be as severe as the observed impact on the quantity. On the other hand, the impact of digitalization on the consumer surplus is unambiguously positive. The impact on the social welfare is rather ambiguous in general, but the social welfare may increase for plausible parameter values.

Original languageEnglish
Pages (from-to)306-325
Number of pages20
JournalCESifo Economic Studies
Volume55
Issue number2
DOIs
Publication statusPublished - 2009 Jun 15

Fingerprint

music
constancy
digitalization
social welfare
industry
sales
producer
profit
distribution
Digital music
analysis
surplus
price
parameter

Keywords

  • Copyright
  • Digital music
  • File sharing
  • Music industry

ASJC Scopus subject areas

  • Economics and Econometrics
  • Geography, Planning and Development

Cite this

On the impact of digital music distribution. / Ahn, Illtae; Yoon, Kiho.

In: CESifo Economic Studies, Vol. 55, No. 2, 15.06.2009, p. 306-325.

Research output: Contribution to journalArticle

Ahn, Illtae ; Yoon, Kiho. / On the impact of digital music distribution. In: CESifo Economic Studies. 2009 ; Vol. 55, No. 2. pp. 306-325.
@article{26532845bc7b4b9a99c0199ed4ba029a,
title = "On the impact of digital music distribution",
abstract = "We present a framework to evaluate the impact of digital music distribution. We set up a representative model that enables the comparative static analysis. We then interpret two empirical observations about the music industry, the sales decline and the price constancy, and fit the model to these observations. We find that, while the impact of digitalization on the producers' profits is probably negative, it may not be as severe as the observed impact on the quantity. On the other hand, the impact of digitalization on the consumer surplus is unambiguously positive. The impact on the social welfare is rather ambiguous in general, but the social welfare may increase for plausible parameter values.",
keywords = "Copyright, Digital music, File sharing, Music industry",
author = "Illtae Ahn and Kiho Yoon",
year = "2009",
month = "6",
day = "15",
doi = "10.1093/cesifo/ifn036",
language = "English",
volume = "55",
pages = "306--325",
journal = "CESifo Economic Studies",
issn = "1610-241X",
publisher = "Oxford University Press",
number = "2",

}

TY - JOUR

T1 - On the impact of digital music distribution

AU - Ahn, Illtae

AU - Yoon, Kiho

PY - 2009/6/15

Y1 - 2009/6/15

N2 - We present a framework to evaluate the impact of digital music distribution. We set up a representative model that enables the comparative static analysis. We then interpret two empirical observations about the music industry, the sales decline and the price constancy, and fit the model to these observations. We find that, while the impact of digitalization on the producers' profits is probably negative, it may not be as severe as the observed impact on the quantity. On the other hand, the impact of digitalization on the consumer surplus is unambiguously positive. The impact on the social welfare is rather ambiguous in general, but the social welfare may increase for plausible parameter values.

AB - We present a framework to evaluate the impact of digital music distribution. We set up a representative model that enables the comparative static analysis. We then interpret two empirical observations about the music industry, the sales decline and the price constancy, and fit the model to these observations. We find that, while the impact of digitalization on the producers' profits is probably negative, it may not be as severe as the observed impact on the quantity. On the other hand, the impact of digitalization on the consumer surplus is unambiguously positive. The impact on the social welfare is rather ambiguous in general, but the social welfare may increase for plausible parameter values.

KW - Copyright

KW - Digital music

KW - File sharing

KW - Music industry

UR - http://www.scopus.com/inward/record.url?scp=66749149921&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=66749149921&partnerID=8YFLogxK

U2 - 10.1093/cesifo/ifn036

DO - 10.1093/cesifo/ifn036

M3 - Article

VL - 55

SP - 306

EP - 325

JO - CESifo Economic Studies

JF - CESifo Economic Studies

SN - 1610-241X

IS - 2

ER -