What Can We Learn from Empirical Studies About Piracy?

The purpose of this article is to make an assessment of the empirical literature dedicated to the consequences of piracy on the cultural industry. The diversity of data collected and methodologies used by empirical studies make it difficult to compare the literature results. On the one hand, some studies seem to have overestimated the impact of digital piracy which may be due, for example, to the use of Internet access as a proxy for piracy. On the other hand, the problem of finding a good instrument to avoid the endogeneity between files illegally downloaded and purchased goods, has probably led to an underestimation of the impact of piracy. As a result, the major finding of empirical works about piracy could be the change in the role of industry stakeholders as well as the way cultural goods are distributed and consumed. We also discuss the different evolutions of the music and the movie industries revenues since the appearance of the first P2P network. (JEL codes: L82, L86, K42)