Working Paper No. 854

Piracy, Music and Movies: A Natural Experiment

Published: October 28, 2010Pages: 23Keywords: Copyright protection; Piracy; File sharing; Music; Movies; IPRED; Natural experimentJEL-codes: D04; D12; K11; K42; M48

Piracy, Music and Movies: A Natural Experiment Adrian Adermon and Che-Yuan Liang


This paper investigates the effects of illegal file sharing (piracy) on music and movie sales. The Swedish implementation of the European Union directive IPRED on April 1, 2009 suddenly increased the risk of being caught and prosecuted for file sharing. We investigate the subsequent drop in piracy as approximated by the drop in Swedish Internet traffic and the effects on music and movie sales in Sweden. We find that the reform decreased Internet traffic by 18 percent during the subsequent six months. It also increased sales of physical music by 27 percent and digital music by 48 percent. Furthermore, it had no significant effects on the sales of theater tickets or DVD movies. The results indicate that pirated music is a strong substitute for legal music whereas the substitutability is less for movies.

Interdisciplinary European Studies

The European Union in a Changing World Order

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This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

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