The Effect of Music Streaming Services on Music Piracy

For today’s post I thought I would review a paper I came across in the Journal of Computers in Human Behavior titled ‘The effect of music streaming services on music piracy among college students’. This paper looks to examine the likelihood of college students to engage in music piracy activities depending on wehther or not they pay for online streaming services.

The paper is interesting to me for two reasons. Firstly, it deals with an important topic. It is difficult to quantify the exact harm which music piracy does to the economy, but some evidence indicates that the U.S. economy loses around $12.5 billion in total output annually as a result of U.S. based piracy of sound recordings.

Secondly, the findings have interesting implications for human decision making. If someone is likely to pay for a streaming service surly they are the type of person that understands that goods and services need to be paid for. Although maybe it is the case that once individuals have paid for their music they feel they have obsolved themselves of any crime they commit when pirating other music later.

The results shown in the table above is taken from the paper in question and the marginal effect coefficient for H5-MS (Hypothesis 5 – Music Streaming) is 23.5%. Indicating that streaming music increases the probability that a student will illegally download music by 23.5%. Another interesting findings from the paper is that peer seem to normalise this criminal behavior i.e. ‘If my friends do it, why shouldnt I? It can’t really be that bad’.

The authors of this paper offer concluding remarks stating that their findings indicate that the ‘individuals who intensively use music streaming are also digital technology savvies who feel comfortablewith music sharing and music piracy’. They go on to explain that they ‘do not expect to see a reduction in music piracy rates as a consequence of the rising popularity of music streaming services’.

This poses an interesting dilemma for policy makers concerned with music piracy. Streaming services were suppose to act as a way to provide an easy to use and legitemate digital music service for consumers and musicians. Immediately it was thought this would help combat music piracy and file sharing, but it seems that paying for streaming services doesn’t deterr an individuals propensity to pirate music.

If you are interested in keeping up with more analysis of the Irish music industry, please give Music Economics a like on Facebook.

By Daragh O’Leary

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