DOES INTERNET HARMS MUSIC SALES? A CONSTRUCTIVE PERSPECTIVE

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ABSTRACT: The main issue brought by this study is whether internet as medium and their users as actors behind the fall of music industry's revenue during these years - many people stand on this point of view - or could be the facilitator of music purchasing. This study used data panel from 16 countries ranging from 1999 to 2004 to prove whether internet and their users harm the revenue of music industry, and employs four dummy variables, including piracy rates, economic development, market size, and individualism/collectivism. The results indicated that internet through their users in the USA does not harm as much as industry claimed before, only 2.1 percent. Furthermore, the panel data results indicate that level of piracy rates released by IFPI in 2001 partially supported, and surprisingly, the internet positively significant influences on the music sales for country's with piracy level in the range of 25 to 50 percent. Moreover, the internet users interact with economic development and individualism/collectivism, and it has shown that internet users have positively significant impacts on the music sales.  However, market size does not support the model developed in  this  study. The managerial implications, limitations of the study and directions for further research are also presented.
Keyword:  internet, piracy, music sales,  piracy  rates,  economic  development,  market  size, individualism/collectivism
Journal Code: jpmanajemengg120004

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Jp Manajemen gg 2012