File-Sharing: Creative Destruction or Just Plain Destruction?

Intellectual Property and Copyright and Trademark

Article Snapshot


Stan Liebowitz


Journal of Law and Economics, Vol. 49, Issue 1, pp. 1-28, 2006


This study looks at whether online P2P file sharing hurts or helps music producers.

Policy Relevance

Empirical evidence from several studies supports the view that online peer-to-peer (P2P) file sharing is responsible for recent declines in CD sales.

Main Points

  • Content producers warned of great harm that would result from earlier copying technologies like the photocopy machine and the VCR. Most of these predictions turned out to be overstated.

  • Measuring exactly what the impact of the early technologies was was rarely attempted. It was very difficult to measure how much copying was happening.

  • Online file-sharing is the latest copying technology, and measurement of copying is now easier than in the past. Actual studies of file-sharing shows that data is still hard to find and interpret.

  • Even with the limited data available, there is strong evidence that file-sharing is responsible for the large decline in CD sales.

  • Studies that reach other conclusions tend to use very questionable methods.

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