Stars vs. Underdogs in Online Music Markets: The Effect of IT on Visibility, Artists’ Broadcasting, and Fans’ Activities

30 Pages Posted: 27 May 2014

See all articles by Marc Bourreau

Marc Bourreau

Telecom ParisTech

Sisley Maillard

Telecom ParisTech

François Moreau

Université Paris 13

Date Written: May 26, 2014

Abstract

In cultural markets, for books, music or movies, sales are concentrated on a small number of highly successful products. One explanation for the skewness of sales is incomplete information: consumers are poorly informed about most products, because only a small proportion of them are visible and promoted in the offline world. With digitization, as suggested by the Long Tail hypothesis, the increasing visibility of niche products could improve consumer information, and thus reduce sales concentration. In this paper, we study whether, in the music industry, online promotion improves the visibility of “underdog” artists or that of “stars”. We use an original and large dataset of indicators for visibility, both offline (i.e., press coverage) and online (e.g., Facebook, Twitter, MySpace, YouTube, or LastFm), for about 1,000 artists over a 6-month period following a new album release. First, we investigate the extent to which the Internet democratizes access to visibility, and we examine the online promotional actions taken by artists and their fans to overcome a potential lack of visibility. We find that, while the most popular and visible artists offline are also the most visible online, audiences of underdog and debut artists are more strongly engaged to support their promotion efforts. Then, we use a panel vector autoregression (PVAR) model to explore the interplay between artists’ broadcasting activities (artist-generated content), fans’ activities (user-generated content), artists’ online reputation (number of fans) and a free form of online consumption (music streaming), according to the artist’s visibility in the traditional media channels. Our main results suggest that the promotion supported by online audiences has a positive effect on music streaming only for underdog artists, whereas artists’ broadcasting activities in social media have no direct impact on music streaming.

Keywords: Social Media, Long Tail, Word-of-Mouth, Music Industry, Artists, Marketing

JEL Classification: L82, M3

Suggested Citation

Bourreau, Marc and Maillard, Sisley and Moreau, François, Stars vs. Underdogs in Online Music Markets: The Effect of IT on Visibility, Artists’ Broadcasting, and Fans’ Activities (May 26, 2014). Available at SSRN: https://ssrn.com/abstract=2441976 or http://dx.doi.org/10.2139/ssrn.2441976

Marc Bourreau (Contact Author)

Telecom ParisTech ( email )

46, rue Barrault
Paris Cedex 13, F-75634
France

Sisley Maillard

Telecom ParisTech ( email )

46 rue Barrault
F-75634 Paris, Cedex 13
France

François Moreau

Université Paris 13 ( email )

France

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