internet piracy and book sales. a field experiment

Internet piracy and book sales. A field experiment.

Wojciech Hardy

Michał Krawczyk

EALE `14

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

2

• 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.

3

Design Recruitment Book Data Literature Matching Treatment

A year passes...

• 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.

3

Design Recruitment Book Data Literature Matching Treatment

A year passes...

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 `pairs’ (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.

4

Design Recruitment Book Data Literature Matching Treatment

A year passes...

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 `pairs’ (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.

4

Design Recruitment Book Data Literature Matching Treatment

A year passes...

Contribution? New industry

New methodology New conclusions

• Around 70 Polish publishers contacted.

• 11 accepted.

• 9 went through with providing all of the data.

The specialities of the publishers varied:

• Law-focused, fantasy-focused, mixed, etc.

• Foreign versus national.

Both medium and larger publishers [some not very popular books and some bestsellers (one excluded)].

Overall: we managed to get a considerable sample.

5

Design Recruitment Book Data Literature Matching Treatment

A year passes...

In total: almost 250 books.

Other variables: E-book existence, date of publishing, price, sales forecasts, first print, etc.

6

Design Recruitment Book Data Literature Matching Treatment

A year passes...

We match them into pairs (groups)

The variables they are matched on: – Publisher

– Segment

– Publication date (current ed.)

– Edition number

– 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

7

Design Recruitment Book Data Literature Matching Treatment

A year passes...

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.

8

Design Recruitment Book Data Literature Matching

A year passes...

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.

8

Design Recruitment Book Data Literature Matching

A year passes...

Treatment

A note on file-sharing in Poland.

Alexa ranking of

„most popular websites”:

Chomikuj.pl – 17th

Pirate Bay – 66th

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.

8

Design Recruitment Book Data Literature Matching

A year passes...

Treatment

A note on file-sharing in Poland.

Alexa ranking of

„most popular websites”:

Chomikuj.pl – 17th

Pirate Bay – 66th

• Two manipulation checks: 1) Based on the data from Plagiat.pl

2) Three research assistants:

– Searched for 20 titles each.

– Found fewer protected books.

– If found – searched longer.

– If found – mostly at non-‚standard’ sources.

9

Sales Data Tests

Base

Regressions

Manipulation Check

Quantile Regressions Conclusions

• We received sales data.

• Some distribution.

• They could be negative (what we did)

• Smth by genre?

10

Sales Data Tests

Base

Regressions Manipulation

Check

Quantile Regressions Conclusions

Two comparable groups -> simple testing should suffice.

• No difference in sales!

• No difference in variance!

11

Sales Data Tests

Base

Regressions Manipulation

Check

Quantile Regressions Conclusions

• Let’s recheck our strategy and add controls.

• No results!

12

Sales Data Tests

Base Regressions

Manipulation Check

Quantile Regressions Conclusions

• Popularity? (see this and that)

• No results!

13

Sales Data Tests

Base Regressions

Manipulation Check

Quantile

Regressions Conclusions

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

14

Sales Data Tests

Base Regressions

Manipulation Check

Quantile Regressions 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. We cannot predict the future and piracy’s impact on the e-book industry.

Thank you for your attention! Author: Wojciech Hardy e-mail: whardy@wne.uw.edu.pl

More about our research on

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

Twitter: @GrapeUW