<<  On the Fetish-character in music and the Regression of Listening Billy Joel US history and social problems through music  >>
The current standard of empirical evidence
The current standard of empirical evidence
Welfare from Music
Welfare from Music
Dynamic Case
Dynamic Case
Dynamic Case
Dynamic Case
Rolling Stones 500 Best Albums (2004)
Rolling Stones 500 Best Albums (2004)
Splice together to create overall index, covering pre- and
Splice together to create overall index, covering pre- and
Data Validity
Data Validity
Concordance of Long Term Indices
Concordance of Long Term Indices
The lists are highly correlated: 250 albums account for two thirds of
The lists are highly correlated: 250 albums account for two thirds of
Splice Indices
Splice Indices
And voila: Index of vintage quality
And voila: Index of vintage quality
Data: Airplay
Data: Airplay
Data: Airplay
Data: Airplay
Data: Sales
Data: Sales
Depreciation in Sales Data
Depreciation in Sales Data
Depreciation in Sales Data
Depreciation in Sales Data
Depreciation in Sales Data
Depreciation in Sales Data
Flexible Depreciation Patterns
Flexible Depreciation Patterns
Flexible Depreciation Patterns
Flexible Depreciation Patterns
Airplay-Based Vintage Quality Index
Airplay-Based Vintage Quality Index
Ditto for Parametric Indices
Ditto for Parametric Indices
Ditto for Parametric Indices
Ditto for Parametric Indices
Certification-Based Vintage Quality Index (all media)
Certification-Based Vintage Quality Index (all media)
Certification-Based Vintage Quality Index (all media)
Certification-Based Vintage Quality Index (all media)
Certification-Based Vintage Quality Index (all media)
Certification-Based Vintage Quality Index (all media)
Tests
Tests
Tests
Tests
Discussion
Discussion
Cost Reduction
Cost Reduction
Changing media for musical discovery
Changing media for musical discovery
Which outlets
Which outlets
Entry barrier: change back from $10
Entry barrier: change back from $10
Label Examples
Label Examples
Label Examples
Label Examples
Label Examples
Label Examples
Label Examples
Label Examples
Label Examples
Label Examples
Label Examples
Label Examples
Label Examples
Label Examples
Label Examples
Label Examples
Indie Role by Decade
Indie Role by Decade
Also true among top sellers
Also true among top sellers
Series show vintages shares 2004-2008, when they are k-years old
Series show vintages shares 2004-2008, when they are k-years old
Concordance back to 1960
Concordance back to 1960
Concordance back to 1960
Concordance back to 1960
Concordance back to 1960
Concordance back to 1960
Concordance back to 1960
Concordance back to 1960
Concordance back to 1960
Concordance back to 1960
Concordance back to 1960
Concordance back to 1960
Concordance back to 1960
Concordance back to 1960
Concordance back to 1960
Concordance back to 1960
Resulting Airplay Index
Resulting Airplay Index
Copyright Protection, Technological Change, and the Quality of New Products: Evidence from Recorded Music since Napster

: Joel Waldfogel. , . , Copyright Protection, Technological Change, and the Quality of New Products: Evidence from Recorded Music since Napster.pptx zip- 1263 .

Copyright Protection, Technological Change, and the Quality of New Products: Evidence from Recorded Music since Napster

Copyright Protection, Technological Change, and the Quality of New Products: Evidence from Recorded Music since Napster.pptx
1Copyright Protection, Technological 28certs; 4428 single certs Covers most of
Change, and the Quality of New Products: music sales Tracks known patterns Sparse
Evidence from Recorded Music since < 1970.
Napster. Joel Waldfogel University of 29Depreciation in Sales Data. Older
Minnesota and NBER Media Economics albums sell less Sales data are noisier.
Conference, Moscow October 27, 2011. 30Empirical Approach. Goal: derive an
2Intro assuring flow of creative index of the importance of the music from
works. Appropriability begets creative each vintage Define st,v = share of
works depends on both law and technology vintage v music in the sales or airplay of
IP rights are monopolies granted to music in period t. Observe s for V
provide incentives for creation Harms and vintages and T years For a given year t, s
benefits Recent technological changes may varies across vintages for two reasons
have altered the balance File sharing Depreciation Variation in vintage quality.
makes it harder to appropriate revenue. 31Regression approach description.
3and revenue has plunged. Regress ln(st,v) on age dummies, vintage
4Ensuing Research. Mostly a kerfuffle dummies. Allow flexible depreciation
about whether file sharing cannibalizes pattern Then: vintage dummies are index of
sales Oberholzer-Gee and Strumpf vintage quality.
(2006),Rob and Waldfogel (2006), Blackburn 32Random utility interpretation.
(2004), Zentner (2006), and more Most Consumers choose between vintages No
believe that file sharing reduces sales outside good (literally in airplay) in
and this has led to calls for sales, dont believe music is falling in
strengthening IP protection. utility relative to outside good Ut,v =
5My Epiphany. Revenue reduction, f(t-v) + ?v + ?t,v with extreme-value
interesting for producers, is not the most error ln(st,v) ln(st,0) = f(t-v) + ?v.
interesting question Instead: will flow of Normalization: ln(st,0) = constant
new products continue? We should worry Regression of ln(st,v) on age and vintage
about both consumers and producers. dummies recovers the evolution of mean
6Industry view: the sky is falling. utility with vintage.
IFPI: Music is an investment-intensive 33Flexible Depreciation Patterns.
business Very few sectors have a 34Airplay-Based Vintage Quality Index.
comparable proportion of sales to R&D 35Ditto for Parametric Indices.
investment to the music industry. Warner 36Certification-Based Vintage Quality
Music: piracy makes it more difficult Index (all media). Noisier. But similar
for the whole industry to sustain that pattern.
regular investment in breaking talent. 37Tests. Following Napster, is vintage
RIAA: Our goal with all these anti-piracy quality Above or below previous level?
efforts is to protect the ability of the Relative to various starting points Above
recording industry to invest in new bands or below previous trends? Relative to
and new music. various starting points.
7File sharing is not the only 38The Post-Napster Airplay-Based Sales
innovation. Compound experiment Costs of Index Relative to Pre-Napster Levels and
production, promotion, and distribution Trends. (1). (2). (3). (4). (5). (6). (7).
may also have fallen Maybe weaker IP (8). (9). Post-Napster Level. -0.2231.
protection is enough My empirical 0.4875. 0.4822. 0.3790. 0.0032. (0.2340).
question: What has happened to the quality (0.3277). (0.2346)*. (0.1126)**. (0.1944).
of new products since Napster? Contribute Level since 1995. -0.8151. (0.2814)**.
to an evidence-based discussion on Level since 1990. -0.9484. (0.1873)**.
adequacy of IP protection in new economy. Level since 1980. -1.2359. (0.0899)**.
8The current standard of empirical Level since 1970. -0.9806. (0.1944)**.
evidence. Lennon and McCartney story Post-Napster Trend. 0.3223. 0.2391.
"Somebody said to me, 'But the 0.2239. 0.2032. (0.1350)*. (0.0747)**.
Beatles were anti-materialistic.' That's a (0.0393)**. (0.0241)**. Trend since 1995.
huge myth. John and I literally used to -0.2165. (0.0827)*. Trend since 1990.
sit down and say, 'Now, let's write a -0.1170. (0.0301)**. Trend since 1980.
swimming pool.'" . -0.0767. (0.0094)**. Trend since 1980.
9Hard problem. Quantifying the volume -0.0595. (0.0043)**. Constant. 2.8434.
of high-quality new music released over 2.9479. 3.0866. 3.4772. 3.5977. 2.9097.
time is hard Some obvious candidates are 2.9942. 3.2408. 3.5293. (0.1013)**.
non-starters # works released (but skew) # (0.1007)**. (0.0948)**. (0.0644)**.
works selling > X copies (moving (0.1705)**. (0.1005)**. (0.0985)**.
target) Estimate consumer surplus over (0.0822)**. (0.0680)**. Observations. 48.
time (But tendency to purchase has 48. 48. 48. 48. 48. 48. 48. 48. R-squared.
declined, independent of value to 0.02. 0.17. 0.38. 0.81. 0.37. 0.13. 0.25.
consumers). 0.60. 0.81.
10Three Separate Approaches. Quality 39The Post-Napster Album
index based on critics best-of lists 2 Certification-Based Sales Index Relative
indices based on vintage service flow to Pre-Napster Levels and Trends. (1).
Airplay by time and vintage Sales by time (2). (3). (4). (5). (6). (7). Post-Napster
and vintage. Level. 0.0446. 0.1806. 0.1852. 0.1752.
11Roadmap. Theory welfare from music (0.0807). (0.1217). (0.0937). (0.0615)**.
Critic-based approach Data, validation, Level since 1995. -0.1633. (0.1105). Level
results Usage-based approaches Data, since 1990. -0.2109. (0.0831)*. Level
validation, results Discussion Changes in since 1980. -0.3918. (0.0635)**.
demand and supply, further puzzles. Post-Napster Trend. 0.0564. 0.0401.
12Welfare from Music. Static case (for 0.0464. (0.0452). (0.0259). (0.0167)**.
music that already exists). Buying regime: Trend since 1995. -0.0341. (0.0303). Trend
CS = A, PS=B,DWL=C Stealing regime: CS = A since 1990. -0.0173. (0.0122). Trend since
+ B + C, PS=0, DWL=0 Static benefits of 1980. -0.0155. (0.0052)**. Constant.
stealing outweigh costs. -0.9879. -0.9607. -0.9176. -0.7267.
13Dynamic Case. Suppose PS motivates -0.9668. -0.9519. -0.8745. (0.0418)**.
supply and music depreciates (already know (0.0451)**. (0.0480)**. (0.0518)**.
that music depreciates) Beatles +26 %/year (0.0440)**. (0.0469)**. (0.0525)**.
Britney Spears -28%/year. Observations. 41. 41. 41. 41. 41. 41. 41.
14Album Depreciation for Major Artists. R-squared. 0.01. 0.06. 0.15. 0.50. 0.04.
These albums dont depreciate much. These 0.06. 0.20.
albums depreciate a lot. 14. From Rob and 40The Post-Napster Album
Waldfogel (2004). artist. adjusted Certification-Based Sales Index Relative
depreciation. Pleasantly surprised. Grew to Pre-Napster Levels and Trends (all
on me. Familiar before got it. Guessed recorded music products). (1). (2). (3).
right. Disappointed from start. Got tired (4). (5). (6). (7). (8). Post-Napster
of it. N. RED HOT CHILI PEPPERS. 31.3%. Level. 0.0801. 0.3515. 0.2817. 0.2383.
30.0%. 43.3%. 26.7%. 10.0%. 0.0%. 13.3%. (0.1008). (0.1411)*. (0.1112)*.
30. BEATLES, THE. 26.2%. 25.9%. 22.2%. (0.0752)**. Level since 1995. -0.3257.
33.3%. 0.0%. 0.0%. 22.2%. 27. JONES, (0.1262)*. Level since 1990. -0.3024.
NORAH. 17.4%. 35.3%. 58.8%. 11.8%. 5.9%. (0.0963)**. Level since 1980. -0.4745.
11.8%. 11.8%. 17. U2. 9.8%. 18.8%. 43.8%. (0.0752)**. Post-Napster Trend. 0.1629.
18.8%. 6.3%. 6.3%. 18.8%. 16. LINKIN PARK. 0.1099. 0.0964. 0.0938. (0.0525)**.
9.8%. 37.0%. 14.8%. 29.6%. 7.4%. 7.4%. (0.0299)**. (0.0186)**. (0.0151)**. Trend
14.8%. 27. DION, CELINE. 9.7%. 18.8%. since 1995. -0.0923. (0.0340)**. Trend
0.0%. 25.0%. 12.5%. 12.5%. 31.3%. 16. since 1990. -0.0422. (0.0133)**. Trend
COLDPLAY. 6.3%. 25.0%. 27.8%. 27.8%. since 1980. -0.0263. (0.0053)**. Trend
22.2%. 0.0%. 8.3%. 36. 2 PAC. 1.9%. 10.7%. since 1970. -0.0233. (0.0036)**. Constant.
25.0%. 21.4%. 7.1%. 0.0%. 42.9%. 28. 0.3248. 0.3791. 0.4256. 0.6411. 0.3630.
EMINEM. 0.7%. 22.9%. 21.4%. 21.4%. 8.6%. 0.3940. 0.4987. 0.6695. (0.0504)**.
0.0%. 31.4%. 70. SOUNDTRACK. 0.0%. 28.3%. (0.0515)**. (0.0556)**. (0.0614)**.
23.9%. 19.6%. 6.5%. 6.5%. 23.9%. 45. (0.0480)**. (0.0502)**. (0.0531)**.
DOORS, THE. -1.2%. 12.5%. 12.5%. 25.0%. (0.0651)**. Observations. 40. 40. 40. 40.
12.5%. 6.3%. 37.5%. 16. MATTHEWS, DAVE 40. 40. 40. 40. R-squared. 0.02. 0.17.
BAND. -5.2%. 7.1%. 19.0%. 26.2%. 14.3%. 0.22. 0.53. 0.22. 0.27. 0.44. 0.56.
19.0%. 26.2%. 42. MOBY. -6.2%. 5.9%. 5.9%. 41Bottom line. No evidence that vintage
47.1%. 5.9%. 17.6%. 17.6%. 17. MAYER, quality has declined Some evidence that it
JOHN. -8.7%. 31.3%. 25.0%. 18.8%. 6.3%. has increased Hard to know what it might
6.3%. 25.0%. 16. NELLY. -17.2%. 15.8%. otherwise have been Puzzle: why do high
21.1%. 15.8%. 5.3%. 5.3%. 31.6%. 19. quality products continue to be produced
DESTINY'S CHILD. -20.2%. 0.0%. 6.7%. despite collapse in effective copyright
20.0%. 20.0%. 6.7%. 46.7%. 15. 50 CENT. protection?
-20.5%. 17.4%. 21.7%. 17.4%. 8.7%. 0.0%. 42Discussion. File sharing reduced
39.1%. 23. 'N SYNC. -20.7%. 4.8%. 0.0%. demand, but the quantity of new works
4.8%. 4.8%. 14.3%. 71.4%. 21. AGUILERA, seems not to have decline. How? ?
CHRISTINA. -21.6%. 10.3%. 0.0%. 10.3%. 43Cost Reduction.
13.8%. 10.3%. 55.2%. 29. BLINK 182. 44Changes on Supply Side. Costs of
-23.0%. 6.7%. 13.3%. 6.7%. 6.7%. 26.7%. creation, promotion, and distribution have
46.7%. 15. CAREY, MARIAH. -23.5%. 0.0%. all fallen Creation Succession of
10.5%. 26.3%. 5.3%. 31.6%. 26.3%. 19. cost-reductions Reel-to-reel tape (?1948),
BACKSTREET BOYS. -24.5%. 0.0%. 0.0%. DAT (?1985), Pro-Tools & Garageband
17.6%. 5.9%. 11.8%. 64.7%. 17. DMX. (since Napster) Promotion/musical
-24.8%. 10.5%. 5.3%. 21.1%. 10.5%. 10.5%. discovery Old days: Radio and payola $60
52.6%. 19. SPEARS, BRITNEY. -28.3%. 0.0%. million payments to radio in 1985, when
3.4%. 6.9%. 3.4%. 3.4%. 82.8%. 29. JA recording industry profits were $200
RULE. -48.4%. 6.7%. 0.0%. 26.7%. 0.0%. million $150,000 to promote hit single.
26.7%. 40.0%. 15. JAY-Z. -52.4%. 17.4%. 45Promotion, Now. Infinite Dial study.
0.0%. 8.7%. 17.4%. 26.1%. 34.8%. 23. 46Changing media for musical discovery.
VARIOUS. -86.9%. 10.0%. 0.0%. 5.0%. 5.0%. 47Which outlets?
10.0%. 45.0%. 15. 618. 48Distribution has changed too. Old
15Dynamic Case. Suppose PS motivates days: physical product, trucks, billing
supply and music depreciates (already know Now, can get song available at iTunes
that music depreciates) Beatles +26 %/year Music Stores for $10 (or less) CDBaby,
Britney Spears -28%/year Then in next TuneCore, etc.
period, CS=PS=DWL=0 Key question: ebbed 49Entry barrier: change back from $10.
flow of new products? 50Indies Filling Void? Leeds (2005) -
16Approach #1: critics lists. Want independent labels appear to have lower
index of the number of works released each costs, allowing them to subsist on smaller
year surpassing a constant threshold Use sales: Unlike the majors, independent
critics retrospective best-of lists E.g. labels typically do not allocate money to
Number of albums on a best-of-the-decade producing slick videos or marketing songs
list from each year Retrospective: to be to radio stations. An established
on list, albums quality must exceed a independent can turn a profit after
constant threshold. selling roughly 25,000 copies of an album;
17Rolling Stones 500 Best Albums success on a major label release sometimes
(2004). doesn't kick in until sales of half a
18Splice together to create overall million..
index, covering pre- and post-Napster era. 51Label Examples. Majors: Indies
19Data Validity. Do indices pick up (selected artists): 4AD (Pixies, National)
major eras? Larkin (2007): The 60s will SST (Husker Du) Matador (Pavement,
remain, probably forever, the single most Interpol) Merge (Arcade Fire, Spoon).
important decade for popular music. Do 52Indie Role by Decade. Difference
indices track each other? Are critical between the 2000s and the previous two
responses relevant to demand (and decades is significant at the 5 percent
therefore economic welfare)? level in a one-sided test (p-val =0.04).
20Concordance of Long Term Indices. All 53Also true among top sellers.
correlations exceed 0.7, except with 54Changed Rewards for Artists. More
Zagat. readily available music stimulates demand
21The Most Listed Albums of the 2000s, for live performance Shapiro and Varian
or How Cool Are You? Lots of concordance. (1999), Connolly and Krueger (2006),
Significant sales; not economically Mortimer, Nosko, and Sorenson (2010)
irrelevant. rank. artist. album. number of Potentially why artists dont go back to
lists. year. RIAA cert. 1. Radiohead. Kid law school.
A. 32. 2000. P. 2. Arcade Fire. Funeral. 55Conclusions. New data for documenting
31. 2004. 3. Strokes, The. Is This It. 29. effects on supply following Napster based
2001. G. 4. OutKast. Stankonia. 29. 2000. on behavior vs critics No reduction and
3xP. 5. Wilco. Yankee Hotel Foxtrot. 28. possibly an increase - in consequential
2002. G. 6. Jay-Z. The Blueprint. 25. new products despite reduction in demand
2001. 2xP. 7. Flaming Lips, The. Yoshimi Reduced costs, changed industrial
Battles the Pink Robots. 21. 2002. G. 8. organization (majors vs indies).
LCD Soundsystem. Sound of Silver. 20. 56Conclusions, contd. Far from clear we
2007. 9. West, Kanye. The College Dropout. need stronger IP protection here Caveats:
20. 2004. 2xP. 10. Stevens, Sufjan. Not clear what relevance results have for
Illinois. 20. 2005. 11. TV on the Radio. other kinds of works (e.g. movies are
Return to Cookie Mountain. 19. 2006. 12. still pretty expensive to make) Dont know
Modest Mouse. The Moon & Antarctica. the counter-factual Next step: look under
19. 2000. G. 13. White Stripes, The. the hood of recording industry.
Elephant. 19. 2003. P. 14. Daft Punk. 57Backup slides.
Discovery. 19. 2001. G. 15. Interpol. Turn 58Controlling for Depreciation. Compare
On the Bright Lights. 18. 2002. 16. different vintages market shares in years
Eminem. The Marshall Mathers LP. 18. 2000. that occur equally long after the
9xP. 17. Radiohead. In Rainbows. 18. 2007. respective releases Define
G. 18. Beck. Sea Change. 17. 2002. G. 19. s(k,v)=st,v|t-v=k = share of vintage v
Bon Iver. For Emma, Forever Ago. 17. 2007. music among airplay or sales k years later
20. Broken Social Scene. You Forgot It in (t=v+k).
People. 16. 2002. 21. Spoon. Kill the 59With airplay data, t=2004,,2008;
Moonlight. 15. 2002. 22. Knife, The. v=1960,..t, So s(0,v) can be calculated
Silent Shout. 15. 2006. 23. White Stripes, for v=2004,,2008. showing evolution of
The. White Blood Cells. 15. 2001. G. 24. vintage quality, 04-08 Music thats one
Animal Collective. Merriweather Post year old in 2004 was released in 2003, so
Pavillon. 15. 2009. 25. Madvillain. s(1,v) can be calculated for v=2003,,2007
Madvillainy. 15. 2004. showing evolution of vintage quality 03-07
22The lists are highly correlated: 250 s(k,v) can be calculated for
albums account for two thirds of the 2390 2004-k,,2008-k.
best of list entries. 60Series show vintages shares
23Splice Indices. Plot ?s. 2004-2008, when they are k-years old.
24And voila: Index of vintage quality. Current music share falls 2004-2008.
25And voila: Index of vintage quality. 1-yr-old musics share rises 2003-4, falls
Index is falling prior to Napster. to 08. 2-year-old musics share rises
Post-Napster constancy is, if anything, a 2002-4, then falls. 3-year-old musics
relative increase. share rises 2001-4, then falls. For any
26Approaches #2 and #3. Measure of vintage, we have 4 estimates of % change
vintage quality based on service in vintage quality.
flow/consumer decision Sales and airplay 61Concordance back to 1960.
Idea: if one vintages music is better 62Vintage quality index. For each
than anothers, its superior quality vintage between 1960 and 2004, there are
should generate higher sales or greater five separate series s(k,v) covering the
airplay through time, after accounting for vintage 4 percent changes Calculate the
depreciation. average percent change for each vintage,
27Data: Airplay. (Describing data first accumulate them.
makes empirical approach easier to 63Resulting Airplay Index.
exposit) For 2004-2008, observe the annual 64Any guesses?
share of aired songs originally released 65Next steps: understanding the increase
in each prior year. From Mediaguide 2000, in quality. Perhaps cheaper
over 1 million spins/year Lots of data: experimentation allows us to find better
smooth, precise. Direct evidence of music (Tervio, 2009) Have been collecting
depreciation. data on volume of new releases from
28Data: Sales. Coarse sales data: RIAA independent and major labels Indie share
certifications See when sales pass among successful Average career age among
thresholds, know when released Gold=0.5 indie and major releases Aggressive
million, Platinum=1 million, experimentation by indies vs majors.
multi-platinum=X million. 17,935 album
Copyright Protection, Technological Change, and the Quality of New Products: Evidence from Recorded Music since Napster.pptx
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Copyright Protection, Technological Change, and the Quality of New Products: Evidence from Recorded Music since Napster

Copyright Protection, Technological Change, and the Quality of New Products: Evidence from Recorded Music since Napster

The green movement - The countries in which there are offices Greenpeace. One of the largest victories in the given campaign can name refusal of flooding of an oil platform brent spar as it contained many toxic substances. The main objective to achieve the decision of global environmental problems, including by attraction to them of attention of the public and the authorities.

The animals - BEAR. WHALE. TIGER. The animals which live in the OCEAN. GIRAFFE. DOLPHIN. The animals which live in the desert. GRIFFIN. STARFISH. FISH. REINDEER. The animals which live in the rainforest and tropics. BOBCAT. CAMEL. GORILLA. KOALA. LION. PENGUIN. KANGAROO. The ANIMALS of our planet. ELEPHANT. WOMBAT.

The english-speaking countries - USA. Great Britain. Scotland. The English-speaking countries. Australia. Disneyland.

New York - Cost Per Inmate (2001) $36,835 versus $24,052. INTRODUCTION: New York. Approximately $90 million in state funding supports these functions. Transitional Services Programs. Double Cell: 2007 Parolees. INSTITUTIONAL CORRECTIONS. Recognize the value of each person. According to a 2004 estimate, 20.4% of the population is foreign-born.

the woman - Der mann- . = . Chickens mind- . As great a pity to see a woman cry as a goose go barefoot. , . ; The wife is the key to the house. 9 , :

World music - What is special about your composer? Tchaikovskys masterpieces. Pyotr Tchaikovsky is a well-known Russian composer. What countries are internationally known as musical countries? Sergei Vasilievich Rachmaninoff. Tchaikovsky is famous for his ballets Nutcracker and Swan Lake. Listen to your group mates and fill in the table.

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