The Effect of Graduated Response Anti-Piracy Laws on Music Sales: Evidence from an Event Study in France
Despite the problem that filesharing poses to creative industries, there is little research on the effectiveness of governmental anti-piracy policies. This study analyzes how the HADOPI graduated response law in France affected music sales on the iTunes store. We obtained a panel of iTunes sales data from the four major labels across a broad set of countries. We applied a difference-in-difference approach, comparing sales trends in France to a control group of European countries. Our results suggest that increased consumer awareness of HADOPI caused iTunes music sales to increase by 22-25% relative to changes in the control group. These sales changes are similar for each of the four major labels, suggesting that our results are not peculiar to any particular label. The observed sales increase is much larger in high piracy genres than low piracy ones, strengthening the causal interpretation of our results.