Benifits of anciallry products

Digital piracy, although negatively altering the recorded music market, has a positive impact on other segments of the music market as a whole such as live music, ancillary goods including ringtones, etc., since it generates a positive externality benefting to those downstream activities. Through a two players strategic game between a record company and an artist, we show that a renegotiation of music contracts could allow to internalize this positive externality, while being welfare improving for both record companies and artists. We also show however that pervasive piracy is not systematically desirable for an artist.

There is a negative effect of piracy on music sales with two potential positive effects: a network effect, that increases legal demand for a widely pirated product and, above all, a sampling effect, that prompts some consumers to purchase a legal copy of a product they already get for free in a low quality pirated version. The positive effects of piracy and more widely of the digitization of music are either partial, when favouring emerging artists at the detrimental of "stars.

• Above is a source I found on the internet, I choose to use it on the Blog because I found it interesting as it explains the positive and negative effects of Digital piracy for artists and music companies. 

- website were I got my source from 

http://www.tn.refer.org/CEAFE/Oral_presentations/Moreau.pdf