turn in recorded music sales since Napster. Studies of paid versus unpaid consumption of movies are not as numerous but also tend to find results consistent with a depressing effect of unpaid consumption. It remains to be seen if studies of other industries—books, newspapers, video games, and photographs—also reveal this pattern. On the other hand, some of this work takes an overly simplistic view of substitution effects, assuming that consumption of unlicensed works displaces only the consumption of licensed works and not other activities. Hence, there is a need for further research to determine the nature and magnitude of sales displacement caused by infringing distribution across the range of copyrighted works.

In any case, it is hard for academic studies to keep up with swift technological change. In the past two years, the emergence of cyberlockers has rapidly changed access to copyrighted works. Thus, the growing number of studies of peer-to-peer technology do not adequately address the economic realities currently facing content industries. Furthermore, the rapid rollout of tablet computing will undoubtedly affect the publishing market.

A variety of factors, data limitations foremost among them, complicate the analysis of revenue impacts on intermediaries and creators in the digital environment and how that changes with technology. But even if there were a more conclusive answer, it would be only one consideration in framing copyright policy. User welfare effects, especially benefits and costs to end-consumers, also deserve attention as does the distribution of rewards to artists and other creators.

Determinants of Infringing Copying

To determine the desirable scope and intensity of copyright protection it would be useful to know what factors influence the extent of infringing copying. Again, with only a few exceptions, the studies have focused on single industry—software, music, or films. In software, the practice has been found to vary inversely with level of economic development and income, the strength of the legal and judicial system, and retail prices of authorized products, although not consistently with education. Several empirical studies find that the perceived probability and severity of penalties have a strong effect on file-sharing. Moral considerations also play a role in the sense that concern for rights holders and artists reduces the propensity to engage in file-sharing, and this varies by country. Most studies conclude that students, young adults, and young males in particular are more likely to engage in infringing copying than other demographic groups.



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