nep-cul New Economics Papers
on Cultural Economics
Issue of 2015‒07‒11
six papers chosen by
Roberto Zanola
Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

  1. Language, copyright and geographic segmentation in the EU Digital Single Market for music and film By Estrella Gomez Herrera; Bertin Martens
  2. The economics of television and online video markets By Gregory S. Crawford
  3. Quality Predictability and the Welfare Benefits from New Products: Evidence from the Digitization of Recorded Music By Luis Aguiar; Joel Waldfogel
  4. Leave the Drama on the Stage: The Effect of Cultural Participation on Health By Lars Thiel
  5. Green and Gold: Promoting Eco-Adventure and Cultural Tourism for Inclusive and Sustainable Growth By Picazo, Oscar F.
  6. Online Copyright Enforcement, Consumer Behavior, and Market Structure By Luis Aguiar; Jorg Claussen; Christian Peukert

  1. By: Estrella Gomez Herrera (European Commission – JRC - IPTS); Bertin Martens (European Commission – JRC - IPTS)
    Abstract: The EU seeks to create a seamless online Digital Single Market for media products such as digital music and film. The territoriality of the copyright regime is often perceived as an obstacle that induces geographical segmentation. This paper provides empirical evidence on the extent of market segmentation in the EU on the supply and demand side and measures the contribution of several drivers of this market segmentation. We use data from the Apple iTunes country stores in 27 EU Member States to measure geographical market segmentation in supply (availability), demand (sales) and prices across the EU for downloadable digital music and film. We find that availability of EU media products across country stores in the EU is close to 80% for music and 40% for films but only 27% for EU-produced films. Recent industry initiatives to reduce the transaction costs of making digital music available across borders result in a reasonably wide availability though still short of the 100% mark. Vertical agreements in the supply chain of films remain an obstacle for wider availability of digital films. Consumer preference variables such as cultural proximity, a shared language or border and inherent preferences for home market products are the main drivers for the observed geographical market segmentation in supply and demand patterns. Supply side factors including copyright-related trade costs probably still play a role though we can only infer this indirectly in the absence of data on copyright licensing arrangements at product level. Commercial strategies in general and competition-restricting territorial agreements in film distribution in particular will also reduce availability. We also find evidence of price differentiation across iTunes EU country stores, correlated with overall country price levels.
    Keywords: digital music, online trade, music downloads, trade in cultural products, gravity model, cultural diversity
    JEL: F15 O52
    Date: 2015–04
  2. By: Gregory S. Crawford
    Abstract: Television is the dominant entertainment medium for hundreds of millions. This chapter surveys the economic forces that determine the production and consumption of this content. It presents recent trends in television and online video markets, both in the US and internationally, and describes the state of theoretical and empirical research on these industries. A number of distinct themes emerge, including the growing importance of the pay-television sector, the role played by content providers (channels), distributors, and negotiations between them in determining market outcomes, and concerns about the effects of market power throughout this vertical structure. It also covers important but unsettled topics including the purpose for and effects of both the old (Public Service Broadcasters) and the new (online video markets). Open theoretical and empirical research questions are highlighted throughout.
    Keywords: Economics, television, online video, public service broadcasting, advertising, pay television, bundling, bargaining, market power, net neutrality, foreclosure, policy
    JEL: L82 L86 L32 M37 C72 D40 L40 L50
    Date: 2015–06
  3. By: Luis Aguiar (European Commission - JRC - IPTS); Joel Waldfogel (University of Minnesota - Carlson School of Management)
    Abstract: We explore the consequence of quality unpredictability for the welfare benefit of new products, using recent developments in recorded music as our context. Digitization has expanded consumption opportunities by giving consumers access to the "long tail" of existing products, rather than simply the popular products that a retailer might stock with limited shelf space. While this is clearly beneficial to consumers, the benefits are somewhat limited: given the substitutability among differentiated products, the incremental benefit of obscure products - even lots of them - can be small. But digitization has also reduced the cost of bringing new products to market, giving rise to a different sort of long tail, in production. If the appeal of new products is unpredictable at the time of investment, as is the case for cultural products as well as many others, then creating new products can have substantial welfare benefits. Technological change in the recorded music industry tripled the number of new products between 2000 and 2008. We quantify the effects of new music on welfare using an explicit structural model of demand and entry with potentially unpredictable product quality. Based on plausible forecasting models of expected appeal, a tripling of the choice set according to expected quality adds more than fifteen times as much consumer surplus as the usual long-tail benefits from a tripling of the choice set according to realized quality.
    Keywords: music, Welfare, Entry, Digitization, Recorded Music
    JEL: D60 L13 L82 O33
    Date: 2015–02
  4. By: Lars Thiel
    Abstract: The aim of this study is to estimate the causal effect of cultural participation on health status. Cultural activities may directly impact upon health through palliative coping or substituting health-compromising behaviors. Cultural engagement may also facilitate the development of social networks, which can improve health via social support and the dissemination of social health norms. Previous estimates on the arts-health relationship are potentially biased due to reverse causality and unobserved heterogeneity. Using individual-level data from Germany, we employ propensity-score matching methods. The treatment group is confined to individuals that visit cultural events at least once a month. The participation equation includes a rich set of personal characteristics that cover the respondents' demographic and social background, social capital and leisure-time activities, health-related lifestyle, personality and childhood environment. We explicitly consider reverse causality by including the pre-treatment trends in health outcomes among the covariates. To deal with time-fixed unobserved heterogeneity, we combine the matching model with a difference-indifference approach. We find that frequent cultural-event visits are unrelated to health once we account for unobserved persistent differences across individuals. However, examining the dose-response relationship we find positive mental-health effects of low levels of cultural participation compared to non-attendance. Our results may thus yield important insights on the effectiveness of arts participation as a means to reduce social inequalities in health.
    Keywords: Cultural participation; mental health; physical health; propensity-score matching; multivalued treatment
    JEL: I12 Z11
    Date: 2015
  5. By: Picazo, Oscar F.
    Abstract: This paper briefly reviews the literature on the emerging concept of eco-adventure and cultural tourism, dubbed "green and gold tourism," respectively. It provides the rationale for conducting such a study in the Philippines (why the concern for inclusivity and environmental sustainability in tourism). It then establishes the feasible scope of such study and lists illustrative activities of inclusive and sustainable green and gold tourism. It also identifies concerns and issues about green and gold tourism in APEC countries and in the Philippines. Finally, it classifies emerging good practices in this area, including volunteer travel, promotion of home stays, community-organized and -owned tourism activities, establishing nonmainstream tourist routes and destinations, and tourists' involvement in cultural preservation and eco-rehabilitation.
    Keywords: Philippines, eco-adventure tourism, cultural tourism, green tourism, gold tourism, inclusive tourism, sustainable tourism, nontraditional tourism
    Date: 2015
  6. By: Luis Aguiar (European Commission - JRC - IPTS); Jorg Claussen (Copenhagen Business School); Christian Peukert (University of Zurich)
    Abstract: Taking down copyright-infringing websites is a way to reduce consumption of pirated media content and increase licensed consumption. We analyze the consequences of the shutdown of the most popular German video streaming website - - in June 2011. Using individual-level clickstream data, we find that the shutdown led to significant but short-lived declines in piracy levels. The existence of alternative sources of unlicensed consumption, coupled with the rapid emergence of new platforms, led the streaming piracy market to quickly recover from the intervention and to limited substitution into licensed consumption. Our results therefore present evidence of a high elasticity of supply in the online movie piracy market, together with relatively low switching costs for users of copyright infringing platforms. The fact that the post-shutdown market structure was much more fragmented - and therefore more resistant to future interventions - further questions the effectiveness of the intervention.
    Keywords: Anti-Piracy Intervention, Copyright, Movie Industry, Natural Experiment
    JEL: K42 L82 O34 O38
    Date: 2015–01

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