Badri Munir Sukoco

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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.

Keywords: internet, piracy, music sales, piracy rates, economic development, market size,

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Jurnal Ekonomi dan Bisnis Airlangga (JEBA) (p-ISSN: 2338-2686; e-ISSN: 2597-4564) is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License