IT-Enabled Broadcasting in Social Media: An Empirical Study of Artists’ Activities and Music Sales

Abstract:     
With the emergence of social media and Web 2.0, broadcasting in the online environment has evolved into a new form of marketing due to the much broader reach enabled by information technology. This paper quantifies the effect of artists’ different broadcasting activities on a leading social media site for music, MySpace, on music sales. We employ a panel vector auto-regression (PVAR) model to investigate the inter-relationship between broadcasting promotions in social media and music sales, while controlling for influential factors such as album prices, advertising in traditional media channels, artist popularity, and the impact of user-generated content. We characterize two types of broadcast messages under the MySpace context, personal and automated. We find that broadcasting in social media has a significant effect on sales even after controlling for the aforementioned factors, and more importantly the effect mainly comes from personal messages rather than automated messages. Our findings also point to the importance of conducting captivating conversations with customers in the organizational use of social media.

Number of Pages in PDF File: 41

Keywords: broadcasting, social media, internet marketing, music sales, panel VAR model

working papers series