Video Killed the Radio Star? Online Music Videos and Recorded Music Sales

Forthcoming, Information Systems Research

61 Pages Posted: 17 Apr 2014 Last revised: 9 Oct 2019

See all articles by Tobias Kretschmer

Tobias Kretschmer

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management); Centre for Economic Policy Research (CEPR)

Christian Peukert

Universidade Catolica Portuguesa; ETH Zurich - Center for Law and Economics

Multiple version iconThere are 2 versions of this paper

Date Written: October 6, 2019

Abstract

We study the heterogeneous effects of online video platforms on the sales volume and sales distribution of recorded music. Identification comes from two natural experiments in Germany. In 2009, virtually all music videos were blocked from YouTube due to a legal dispute. In 2013, the dedicated platform VEVO entered the market, making videos of a large number of artists available overnight. Our estimates suggest that restricting (enabling) access to online videos decreases (increases) recorded music sales on average by about 5-10%. We show that the effect operates independently of the nature of video content, suggesting that user-generated content is as effective as official content. Moreover, we highlight heterogeneity in this effect: Online music video disproportionally benefits sales of new artists and sales of mainstream music.

Keywords: Digital Distribution Platforms, User-Generated Content, Natural Experiment

JEL Classification: L82, M37, D83

Suggested Citation

Kretschmer, Tobias and Peukert, Christian, Video Killed the Radio Star? Online Music Videos and Recorded Music Sales (October 6, 2019). Forthcoming, Information Systems Research. Available at SSRN: https://ssrn.com/abstract=2425386 or http://dx.doi.org/10.2139/ssrn.2425386

Tobias Kretschmer

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, DE 80539
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Christian Peukert (Contact Author)

Universidade Catolica Portuguesa ( email )

Lisboa
Portugal

ETH Zurich - Center for Law and Economics ( email )

Rämistrasse 101
ZUE F7
Zürich, 8092
Switzerland

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