Thursday, August 31, 2017
Joel Waldfogel (Minnesota) explains How Digitization Has Created a Golden Age of Music, Movies, Books, and Television .
ABSTRACT: Digitization is disrupting a number of copyright-protected media industries, including books, music, radio, television, and movies. Once information is transformed into digital form, it can be copied and distributed at near-zero marginal costs. This change has facilitated piracy in some industries, which in turn has made it difficult for commercial sellers to continue generating the same levels of revenue for bringing products to market in the traditional ways. Yet despite the sharp revenue reductions for recorded music, as well as threats to revenue in some other traditional media industries, other aspects of digitization have had the offsetting effects of reducing the costs of bringing new products to market in music, movies, books, and television. On balance, digitization has increased the number of new products that are created and made available to consumers. Moreover, given the unpredictable nature of product quality, growth in new products has given rise to su! bstantial increases in the quality of the best products. Although there were concerns that consumer welfare from media products would fall, the opposite scenario has emerged—a golden age for consumers who wish to consume media products.