Discussion of “Copyright Protection, Technological Change, and the Quality of New Products: Evidence from Recorded Music since Napster” by Joel Waldfogel Ruben Enikolopov New Economic School 9th Workshop on Media Economics

Who’s afraid of Napster? Recent technological advances dramatically decreased the costs of reproducing, which reduces revenues. At the same time, the costs of producing music have also decreased dramatically. Overall effect on production of quality music is ambiguous. Need empirical assessment Measuring volume of (high-quality) music production is the main challenge.

Deterioration of music quality? “ It's about this art form that's taken a drubbing in the last decade. I'm not talking about what a wonder it is that music has been democratised. Music between 1960 and 1970: how can you even chart that progress? Music between 1970 and 1980: entire genres come and go, massive leaps. Music between 2001 and 2011: I don't think there's a massive difference, and I don't think that's a matter of opinion. There are probably a lot of reasons for it, but the internet has contributed to that effect. ” DJ Shadow

Measures of High-Quality Music Production Measure that would allow comparison across time. 1. Number of albums per year acclaimed by critics. 2. Share of songs aired on radio originally released in each prior year. 3. Sales of music originally released in each prior year. The measures are corrected to take into account “depreciation” effect, to arrive at vintage quality measure. The result show that the quality was the highest in the end of 60s-mid70s. trends down of stays approximately the same in 80s-90s Either continues downward trend (critics) or goes up (usage) in 00s Overall – no drop or change in trend in 2000

Critics-Based Quality Index Measures only the production of the very-very best music. Doesn’t necessarily reflect utility of average users Any ratings based on popular vote? Is it possible to provide more evidence on “depreciation” in critics’ tastes Some evidence on negative depreciation for the first two years Any ranking produced in 80s or 90s? Use 5-star rankings from internet web-sites (e.g. allmusic.com)

Sales data Key assumption – depreciation function is stable over time. But that might change because media becomes more durable (LPs are more vulnerable then files). Measured in numbers. But the overall demand is likely to be growing over time. The measure is lumpy, but may be smoothed out using (linear) interpolation.

Airplay Data The choice of songs is determined both by demand from listeners and pressure from record labels. The former can be changing because of the changing profile of radio listeners (e.g. the audience is getting older), e.g. because of competition from internet radio Effect of satellite radio? More information on evolution of radio industry (Does the number of stations increase? Does the number of stations grow?) The latter might change because there are less incentives to pay for promoting music Less revenues from sales But more revenues from live performances? “Depreciation” of tastes also may change. Fashions come and go faster because of faster information exchange.

Miscellaneous Analysis is looking at the averages for the right-tale of the distribution of quality. Would be interesting to see changes in distribution. Is Napster over-rated? The measure of technological change might be too crude. Internet penetration? In regressions check both jump and change in trend at the same time. Does decrease in sales revenues mean less incentives? Ads Concerts Non-pecuniary benefits