Abstract

http://ssrn.com/abstract=2117372
 
 

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And the Bands Played on: Digital Disintermediation and the Quality of New Recorded Music


Joel Waldfogel


University of Minnesota - Twin Cities - Carlson School of Management; National Bureau of Economic Research (NBER); University of Minnesota - Twin Cities - Department of Economics

July 25, 2012


Abstract:     
Although revenue for recorded music has collapsed since the explosion of file sharing, results elsewhere suggest that the quality of new music has not suffered. One possible explanation is that digitization has allowed a wider range of firms to bring far more music to market using lower-cost methods of production, distribution, and promotion. Record labels have traditionally found it difficult to predict which albums will find commercial success, so many released albums fail while many nascent but unreleased albums might have been successful. Forces raising the number of products released may allow consumers to discover more appealing choices if they can sift through the offerings. Digitization has promoted both Internet radio and a growing cadre of online music reviewers, providing alternatives to radio airplay as means for new product discovery. To explore this, I assemble data on new works of recorded music released between 1980 and 2010, along with data on particular albums’ sales, airplay on both traditional and Internet radio, and album reviews at Metacritic since 2000. First, I document that despite a substantial drop in major-label album releases, the total quantity of new albums released annually has increased sharply since 2000, driven by independent labels and purely digital products. Second, increased product availability has been accompanied by a reduction in the concentration of sales in the top albums. Third, new information channels – Internet radio and online criticism – change the number and kinds of products about which consumers have information. Fourth, in the past dozen years, increasing numbers of albums find commercial success without substantial traditional airplay. Finally, albums from independent labels – which previously might not have made it to market – account for a growing share of commercially successful albums.

Number of Pages in PDF File: 50

Keywords: copyright, music, digitization

JEL Classification: L82, L13

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Date posted: July 25, 2012  

Suggested Citation

Waldfogel, Joel, And the Bands Played on: Digital Disintermediation and the Quality of New Recorded Music (July 25, 2012). Available at SSRN: http://ssrn.com/abstract=2117372 or http://dx.doi.org/10.2139/ssrn.2117372

Contact Information

Joel Waldfogel (Contact Author)
University of Minnesota - Twin Cities - Carlson School of Management ( email )
19th Avenue South
Minneapolis, MN 55455
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
University of Minnesota - Twin Cities - Department of Economics ( email )
271 19th Avenue South
Minneapolis, MN 55455
United States
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