Within-Group Concentration, Between-Group Concentration, and the Winners and Losers of Digital Music Distribution

20 Pages Posted: 9 May 2014

See all articles by Jesse Shore

Jesse Shore

Boston University - Questrom School of Business

Date Written: May 6, 2014

Abstract

By lowering search costs, making more products available, and providing access to free content, information technology (IT) has changed patterns of market concentration in media industries such as recorded music. In this paper, I argue that to understand how IT has changed media markets we need to go beyond considering market concentration in terms of the distribution of sales by product, and also consider the distribution of sales by group of products: between-group concentration. With cross-country panel data, I show that IT had different effects on sales that depended strongly on the between-group concentration in each country at the time of the internet shock. I develop and test the hypothesis that the formal industry fared relatively better in markets with more between-group concentration than in markets with less. I conclude with a discussion of lessons and further questions implied by the results.

Keywords: Information Technology, Music Industry, Market Concentration, Digital Disruption

JEL Classification: D49, L86, O33

Suggested Citation

Shore, Jesse, Within-Group Concentration, Between-Group Concentration, and the Winners and Losers of Digital Music Distribution (May 6, 2014). Boston U. School of Management Research Paper No. 2433779, Available at SSRN: https://ssrn.com/abstract=2433779 or http://dx.doi.org/10.2139/ssrn.2433779

Jesse Shore (Contact Author)

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States

HOME PAGE: http://jesseshore.com

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