Superstars and the Long Tail: The Impact of Technology on Market Structure in Media Industries
University of Essex, Department of Economics
CEPR Discussion Paper No. DP8719
Technological change is transforming creative media industries. Digitisation lowers recording, storage, reproduction and distribution costs, while computer-based editing facilitates higher quality and special effects. With electronic distribution a vast range of content can be made available to consumers across global markets. The distribution of industry sales appears to be shifting: the late 20th century was the era of the 'hit parade' but attention has now shifted to the 'long tail'. This paper develops a model of differentiated products with endogenous quality and heterogeneous firms to examine the implications of technological change for product variety, quality, and the distribution of firms in media industries.
Number of Pages in PDF File: 28
Keywords: creative industries, digital media, long tail, superstars
JEL Classification: L11, L15, L82
Date posted: December 22, 2011
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