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.
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Michael D. Smith is a Senior Adjunct Fellow at Technology Policy Institute. He is also a Professor of Information Systems and Marketing and the Co-Director of IDEA, the Initiative for Digital Entertainment Analytics at Carnegie Mellon University. He holds academic appointments at Carnegie Mellon University’s School of Information Systems and Management and the Tepper School of Business. Smith has received several notable awards including the National Science Foundation’s prestigious CAREER Research Award, and he was recently selected as one of the top 100 “emerging engineering leaders in the United States” by the National Academy of Engineering. Smith received a Bachelors of Science in Electrical Engineering (summa cum laude) and a Masters of Science in Telecommunications Science from the University of Maryland, and received a Ph.D. in Management Science from the Sloan School of Management at MIT.
