Legal, Economic and Cultural Aspects of File Sharing

This contribution seeks to identify the short and long-term economic and cultural effects of file sharing on music, films and games, while taking into account the legal context and policy developments. The short-term implications examined concern direct costs and benefits to society, whereas the long-term impact concerns changes in the industry's business models as well as in cultural diversity and the accessibility of content. It observes that the proliferation of digital distribution networks combined with the availability of digital technology among consumers has broken the entertainment industries' control over the access to their products. Only part of the decline in music sales can be attributed to file sharing. Despite the losses for the music industry, the increased accessibility of culture renders the overall welfare effects of file sharing robustly positive. As a consequence the entertainment industries, particularly the music industry, have to explore new models to sustain their business.