nep-cul New Economics Papers
on Cultural Economics
Issue of 2005‒10‒29
three papers chosen by
Roberto Zanola
Universita degli Studi del Piemonte Orientale

  1. An Economist's Guide to Digital Music By Martin Peitz; Patrick Waelbroeck
  2. File-Sharing, Sampling, and Music Distribution By Martin Peitz; Patrick Waelbroeck
  3. Does Public Service Broadcasting Serve The Public? The Future Of Television In The Changing Media Landscape By Machiel van Dijk; Richard Nahuis; Daniel Waagmeester

  1. By: Martin Peitz (International University in Germany, D-76646 Bruchsal); Patrick Waelbroeck (ECARES, Université Libre de Bruxelles, CP 114, 50 av. Roosevelt, 1050 Bruxelles, Belgium)
    Abstract: In this guide, we discuss the impact of digitalization on the music industry. We rely on market and survey data at the international level as well as expert statements from the industry. The guide investigates recent developments in legal and technological protection of digital music and describes new business models as well as consumers' attitude towards music downloads. We conclude the guide by a discussion of the evolution of the music industry.
    Keywords: Music, Internet, File-sharing, Peer-to-peer, Piracy, Digital Rights Management, Copyright, E-commerce
    Date: 2004–12
  2. By: Martin Peitz (International University in Germany, D-76646 Bruchsal); Patrick Waelbroeck (ECARES, Université Libre de Bruxelles, CP 114, 50 av. Roosevelt, 1050 Bruxelles, Belgium)
    Abstract: The use of file-sharing technologies, so-called Peer-to-Peer (P2P) networks, to copy music files has become common since the arrival of Napster. P2P networks may actually improve the matching between products and buyers - we call this the matching effect. For a label the downside of P2P networks is that consumers receive a copy which, although it is an imperfect substitute to the original, may reduce their willingness-to-pay for the original - we call this the competition effect. We show that the matching effect may dominate so that a label's profits are higher with P2P networks than without. Furthermore, we show that the existence of P2P networks may alter the standard business model: sampling may replace costly marketing and promotion. This may allow labels to increase profits in spite of lower revenues.
    Keywords: ?le-sharing, P2P, sampling, information transmission, piracy, music
    JEL: L11 L82
    Date: 2004–12
  3. By: Machiel van Dijk; Richard Nahuis; Daniel Waagmeester
    Abstract: The media landscape is subject to substantial technological change. In this Discussion Paper we analyse how technological trends affect the economic rationale for PSB. After identifying the aims and nature of PSB, we derive eight possible market failures from the specific economic characteristics of information. The changing relevance of these market failures is subsequently discussed in the light of the technological changes. Based on this analysis, we argue that public service broadcasting (PSB) for the digital age should be light in the sense that it has a much smaller mandate. The main reason for this conclusion is that, due to technological developments, many market failures in the broadcasting industry are no longer relevant. The broadcasting market thus functions more and more like a normal market. This implies that the allocation tends to the efficient outcome, as long as consumer valuation is properly accounted for. This is not the case when there are externalities and possibly not when it comes to valuing quality. In the presence of these market failures, an efficient allocation is not warranted in the broadcasting industry. It is these remaining market failures that give a future PSB a right to exist. JEL classification: D60, H41, L82
    JEL: D60 H41 L82
    Date: 2005–04

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