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Ups and Down - Author is Ed Translation - Final

Ups and Down - Author is Ed Translation - Final

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Published by: TorrentFreak_ on Dec 24, 2011
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Brassersplein 2Postbus 50502600 GB Delftwww.tno.nlT +31 15 285 70 00F +31 15 285 70 57info-ict@tno.nl
TNO-rapport
34782
Ups and downs
 Economic and cultural effects of file sharing onmusic, film and games
Datum 18 February 2009AuthorsTNO: Annelies Huygen (project leader)Paul Rutten (and Leiden University)Sanne HuveneersSander LimonardSEO: Joost PoortJorna Leenheer Kieja JanssenIViR: Nico van Eijk  Natali Helberger Commissioned by
Ministries of Education, Culture and Science, Economic Affairs andJustice
Translation
We'd like to thank the team of translators - WillemienKneppelhout, Anita Graafland and Peter Kell - who haveworked so hard to ensure that this English language version isnot only accurate but also, we hope, a pleasure to read.
 Number of pages 136
 
 
Brassersplein 2Postbus 50502600 GB Delftwww.tno.nlT +31 15 285 70 00F +31 15 285 70 57info-ict@tno.nl
Advisory Committee
 Ministry of Economic Affairs
Maurits KreijveldPaula WesthovenMargreet Groenenboom
 Ministry of Justice
Anja van ZandvoortEsther Jägers
 Ministry of Education, Culture and Science
Bart HofstedeChantal Olffers (chairman)
 
 
TNO-rapport | Ups and downs
3 / 127
Management Summary
 The main aim of this study is to identify the short- and long-term economic and culturaleffects of file sharing on music, films and games. File sharing is the catch-all term for uploading and downloading. The short-term implications examined include the directcosts and benefits to society at large. In order to determine the long-term impact, weanalyse changes in the industry’s business models as well as in cultural diversity andthe accessibility of content.The study draws on existing sources of information to describe the structure andoperation of the film, games and music industries and discusses the most importantchanges in their business models. Digitisation has played a central role in this process.The trends and developments are subsequently analysed from a legal perspective, with a primary focus on copyright aspects. The empirical reality of file sharing is describedusing data collected during interviews with heavy file sharers as well as data from arepresentative survey of 1,500 internet users in the Netherlands. Other sources includeinterviews with people working in one of the three entertainment industries and, wherenone were available, with industry representatives. Note that this part of the study is byno means a consultation of all parties concerned. The research findings are subsequently placed in a broader perspective using comparable scientific studies carried out in other  parts of the world. This has enabled us to fill in the missing pieces and to take a closer look at the impact of file sharing on the paid consumption of music, films and games.The research shows that the economic implications of file sharing for welfare in the Netherlands are strongly positive in the short and long terms. File sharing providesconsumers with access to a broad range of cultural products, which typically raiseswelfare. Conversely, the practice is believed to result in a decline in sales of CDs,DVDs and games.Determining the impact of unlicensed downloading on the purchase of paid content is atricky exercise. In the music industry, one track downloaded does not imply one lesstrack sold. Many music sharers would not buy as many CDs at today’s prices if downloading were no longer possible, either because they cannot afford it or becausethey have other budgetary priorities: they lack purchasing power. At the same time, wesee that many people download tracks to get to know new music (
sampling
) andeventually buy the CD if they like it. To the extent that file sharing
does
result in adecline in sales (
substitution
), it usually entails a transfer of welfare from producers toconsumers. With estimated welfare gains accruing to consumers totalling around €200million a year in the Netherlands, music producers and publishers suffer turnover lossesof at most €100 million a year. These calculations are necessarily based on severalassumptions and contain uncertainties as many of the underlying data are not preciselyknown. Whereas comparable figures cannot be provided for the film and gamesindustries, they follow a similar logic.Estimates of the volume of global unauthorised download traffic vary strongly, but allsigns are that this involves many billions of files per year, constituting a substantialshare of international internet traffic. The number of file sharers in the Netherlands isrelatively high, which can be explained by the early introduction of broadband in thecountry and its high penetration. Music is by far the most frequently downloaded product. Based on a compilation of different sources, the number of music downloads inthe Netherlands can be estimated at between 1.5 and 2 billion per year, which wouldamount to 7.5 downloads for each track sold. That said, not all downloaded tracks are

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