Internet piracy and book sales

Internet piracy and book sales. A field experiment.

Wojciech Hardy

Michał Krawczyk

EEA 2015

Joanna Tyrowicz

Group for Research in APplied Economics

Summary of the results

Book industry representatives’ concern about

internet piracy might be exaggerated.

(At least) for now.

• sssssssss

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• Many studies for film and music industries.

• Mixed results depending on: – The methodology.

– The analyzed good.

– The analyzed period.

• A few studies on book industry. But: – Small-scale (almost case studies).

– Specific genres of books.

– Not really on piracy.

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Design Recruitment Literature Matching Treatment

Main problems:

Seasonal effects

Causality

Omitted variable

Perfect tool? Experiments!

In general • The sample should be:

– Large (for statistical inference).

– Varied (for representativeness).

– Long (to control for seasonal effects).

• The experimental methodology would deal with: – Reverse causality (a reference group).

– Omitted variables (randomized treatment application).

In detail • Acquire book data.

• Match them in groups (two or more books as similar as possible!).

• Protect one randomly chosen book in each pair.

• Do it for a year.

• Compare the two outcomes.

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Design Recruitment Literature Matching Treatment

Contribution? New industry

New methodology New conclusions

• Around 70 Polish publishers contacted.

• 11 accepted.

• 9 went through with providing all of the data

• Data on 249 titles for over a year

• Different genres: legal, business, linguistic, fiction, fantasy, etc.

• Both medium and larger publishers,

• Both popular and niche titles

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Design Recruitment Literature Matching Treatment

We split them into matched pairs (groups)

The variables they are matched on: – Publication date & edition

– Page count

– Versions available (type of cover, digital)

– Sales forecasts (monthly)

– Number of unauthorized copies found prior to the experiment

Matching results: – Groups of two: 94

– Groups of three: 13

– Groups of five: 1

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Design Recruitment Literature Matching Treatment

Within each group we have randomly picked protected and control titles.

Thus both groups were comparable.

We did nothing to the Control Treatment (CT) group.

Agency Plagiat.pl removed unauthorized copies from the Enforcement Treatment (ET) group.

We observed both groups between 11.2012 and 9.2013.

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Design Recruitment Literature Matching Treatment

A note on file-sharing in Poland.

Alexa ranking of

„most popular websites”:

Chomikuj.pl – 17th

Pirate Bay – 66th

1) Data from Plagiat.pl

2) Counterfactual excercise: searched for 20 titles each (RA’s).

– Found fewer protected books.

– If found – searched longer.

– If found – mostly non-standard sources.

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Manipulation check

• We received sales data.

• Some distribution.

• They could be negative (what we did)

• Smth by genre?

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Sales data

Experimental data, no need for regressions

• No difference in sales, or variance

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Tests

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Tests

• Let’s recheck our strategy and add controls.

• No results!

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Regressions – if heterogeneity

• Popularity? (see this and that)

• No results!

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Regressions – if distributional effects

• Good thing about piracy that you don’t need a result

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Conclusions

We have performed a large field experiment on piracy’s impact on book sales. We applied a robust methodology and checked for more complex relationships. Internet piracy does not seem to pose a threat to the book industry. Of course, the situation is likely to evolve quickly.

Thank you for your attention! Author: Joanna Tyrowicz e-mail: [email protected]

More about our research on

http://grape.uw.edu.pl/ipiracy

Twitter: @GrapeUW