The Effect of Music Piracy on CDs Purchases
Abstract
This study attempts to measure the effect of music piracy on CDs purchases in Thailand by employing simultaneous tobit model. The econometric result shows that the pirated music individual consumed substitutes the original CDs individual purchased. However, this variable is insignificant. We can state that pirated music does not affect the quantity purchased in the original music CDs. The most influential variable is the level of music interest determining music
purchases positively. The qualitative questions are asked to explain the decline in music purchases. It can be concluded that the decline in music sales occurs because (1) there are no albums releasing from consumers’ favorite artists, (2) consumers prefer to listen to only songs matched with their preferences and ignore the rest of the album, (3) songs are not melodious as the expectation, (4) law enforcement and quality difference between original and pirated music seem meaningless to consumers, and (5) the price of the original album is too high.
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