More music doesn’t mean less good music

Bye, Bye, Miss American Pie? The Supply of New Recorded Music since Napster
Joel Waldfogel
The Carlson School and Department of Economics
University of Minnesota and NBER
January 3, 2011
In the decade since Napster, most observers have concluded that file-sharing undermines the protection that copyright affords recorded music.  What matters for consumers, however, is not  sellers’ revenue but whether the diminished appropriability will reduce the availability of new recorded works.  The legal monopoly created by copyright is justified by its encouragement of the creation of new works, but there is little evidence on this relationship.  The file-sharing era can be viewed as a large-scale experiment allowing us to check whether diminished appropriability stems the supply of new works.  Using a novel dataset on the supply of new recorded music derived from retrospective critical assessments of music such best-of-the-decade lists, we compare post-Napster album supply to 1) its pre-Napster level, 2) pre-Napster trends, and 3) a possible control, new song supply following the iTunes Music Store’s revitalization of the single.  We find no evidence that recent changes in appropriability have affected the quantity of new, acclaimed recorded music or new artists coming to market.  We reconcile a stable flow of new works in the face of decreased demand with evidence on reduced costs of bringing works to market and a growing role of independent labels.
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