Intellectual Property Strategy and the Long Tail:
Evidence from the Recorded Music Industry [PDF], a new working paper from University of Toronto Strategic Management PhD candidate Laurina Zhang documents the rise in sales experienced by the music industry following the abandonment of DRM in digital music offerings.
The paper compares sales of 5,864 albums from 634 artists from before and after the music industry eliminated DRM, and finds an average rise of 10 percent in overall sales (though back-catalog experienced more of a lift compared to front-list titles). As TorrentFreak reports, "This effect holds up after controlling for factors such as album release dates, music genre and regular sales variations over time."
“Relaxing sharing restrictions does not impact all albums equally; it increases the sales of lower-selling albums (the “long tail”) significantly by 30% but does not benefit top-selling albums. My results are consistent with theory that shows lowering search costs can facilitate the discovery of niche products.”
According to Zhang, the 30% sales increase for lower-selling albums can be explained by the fact that DRM-free music makes it easier for consumers to share files and discover new music. The finding that removing DRM from top-selling albums has no effect on sales makes sense in this regard, since the discovery element is less important for well promoted musicians.
While DRM is still prevalent in the book industry and elsewhere, most of the major labels are now in agreement that it’s not a good fit for music.
What Piracy? Removing DRM Boosts Music Sales by 10 Percent
Here’s the 32 minute video of my presentation at last month’s O’Reilly Security Conference in New York, “Security and feudalism: Own or be pwned.”
Michael Geist writes, “The global music industry has spent two decades lobbying for restrictive DMCA-style restrictions on digital locks. These so-called “anti-circumvention rules” have been actively opposed by many groups, but the copyright lobby claims that they are needed to comply with the World Intellectual Property Organization’s Internet treaties. Now the head of the RIAA […]
The Auralnauts’ wildly successful Star Wars remixes have gone from strength to strength, combining bad lip reading, South Park-ish raunchy humor, and massive dance-parties accompanied by some seriously rockin’ tunes.
Loot Crate is a totally different kind of subscription service that mails subscribers monthly boxes filled with curated geek, pop culture, and gamer paraphernalia. Its cult following awaits a box every month filled with everything from bobble heads to T-shirts to special edition collectibles. But nothing gets Loot Crate fans as excited as the limited […]
The ARMOR-X Mini Flexible Phone Tripod is a smartphone tripod that is designed with flexible legs to rest on virtually any type of surface. Other tripods have proved useless unless I conveniently have a flat surface in front of me, which is why this particular tripod was appealing enough to try out. The ARMOR-X is compact and easy […]
You don’t need to get an advanced degree and take out massive loans to become a coder. This bundle of 10 courses was designed to teach anyone to code at home for less than it costs to go out for dinner. I was particularly impressed with this new 2017 bundle because it includes courses on […]