Piracy or promotion? The impact of broadband Internet penetration on DVD sales

Unlike Liebowitz, who finds a strong negative impact of broadband penetration on music sales, our results show that increased broadband penetration leads to a significant increase in DVD sales. Using the most conservative results, 9.3% of the $14.1 billion increase in DVD sales during our study period can be attributed to increased broadband penetration. One interpretation of these results is that the difference arises from differences in the ability to pirate these two types of content: while Internet music piracy was easy and rampant from 2000 to 2003, Internet movie piracy was difficult and of generally low quality in this time period. If this interpretation is true it would suggest that, in the absence of piracy, the Internet has an overall strong positive impact on media sales.