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Facts & Research


2024 | Piracy Impact

Digital goods and the effects of copying: An empirical study of the music market | University of Valencia

Digital goods have transformed the way many economic agents interact in markets, especially those in the cultural sector. In particular, digital goods have impacted the music industry—record labels have witnessed a proliferation of the means to circumvent copyright in protected materials. This paper explores the impact of piracy on legal demand.

Key Findings

  • Lost digital goods sales amount to 131% of the legal market, even though there is a wide variation between countries.
  • There is a substitution effect between copies and originals, and that there is no significant positive effect of piracy on legal demand.
  • The retail value of music sales dropped over 16% from 1999 to 2003.

Source: Prof. Juan D. Montoro-Pons, Prof. Manuel Cuadrado-Garcia, University of Valencia