Essays on the economics of digital media and internet piracy / Brett R. Danaher.

Danaher, Brett R.
ix, 128 p. : ill. ; 29 cm.

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Penn dissertations -- Business and public policy. (search)
Business and public policy -- Penn dissertations. (search)
The rise of Internet media piracy is often cited as the primary source of falling profits in the media industries, as markets for music, movies, and television have diminished since the turn of the millennium. This had led to niche of studies in economics and business-related fields aimed at quantifying losses to the industries and providing potential solutions.
In this dissertation I present three empirical papers that use "quasi-experimental" evidence to answer some of the most heavily debated questions in the media industries. In Chapter 1 I ask whether film box office returns are displaced by online movie piracy, and I find evidence that at least billions of dollars are lost each year in the international box office due to piracy. In Chapter 2 I ask whether digital distribution of media---e.g. selling television episodes by digital download on iTunes---can mitigate piracy without cannibalizing physical sales. I find that when a television network removes its content from the iTunes store, it causes a significant jump in piracy of that content but no increase in physical sales through the, the largest online retailer of tv box sets. I also find evidence of a fixed cost to piracy, suggesting that consumers who turn to piracy be unlikely to return to purchasing legally. Finally, in Chapter 3 I turn to the music industry, asking whether the own price elasticity of legal digital music is affected by desirability of online piracy as a substitute good. I find that songs that people tend to pirate exhibit more elastic demand curves in the legal digital market, and that piracy levels for a song increase when that song is raised in price on the iTunes music store. This suggests that firms are constrained in pricing media due to piracy and that firms should use observable piracy data to differentiate pricing across products.
Adviser: Joel Waldfogel.
Thesis (Ph.D. in Business and Public Policy) -- University of Pennsylvania, 2010.
Includes biblographical references.
Waldfogel, Joel, advisor.
University of Pennsylvania.