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Copyright and Economic Viability: Evidence from the Music Industry
Author(s) -
García Kristelia,
Hicks James,
McCrary Justin
Publication year - 2020
Publication title -
journal of empirical legal studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.529
H-Index - 24
eISSN - 1740-1461
pISSN - 1740-1453
DOI - 10.1111/jels.12267
Subject(s) - incentive , revenue , music industry , order (exchange) , term (time) , economics , cultural economics , business , microeconomics , finance , political science , law , sociology , the arts , pedagogy , physics , quantum mechanics , music education
Copyright provides a long term of legal excludability, ostensibly to encourage the production of new creative works. How long this term should last, and the extent to which current law aligns with the economic incentives of copyright owners, has been the subject of vigorous theoretical debate. We investigate the economic viability of content in a major content industry—commercial music—using a novel longitudinal dataset of weekly sales and streaming counts. We find that the typical sound recording has an extremely short commercial half‐life—on the order of months, rather than years or decades—but also see evidence that subscription streaming services are extending this period of economic viability. Strikingly, though, we find that decay rates are sharp even for blockbuster songs, and that the patterns persist when we approximate weekly revenue. Although our results do not provide an estimate of the causal effect of copyright on incentives, they do put bounds on the problem, suggesting a misalignment between the economic realities of the music industry and the current life‐plus‐70 copyright term.