Competition for Attention in the Digital Age: The Case of Single Releases in the Recorded Music Industry

42 Pages Posted: 4 Jun 2014 Last revised: 25 May 2017

See all articles by Christian Essling

Christian Essling

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Johannes Koenen

ARC Econ GmbH

Christian Peukert

University of Lausanne (HEC)

Date Written: May 22, 2017

Abstract

In markets with long tails and thousands of products, like recorded music, consumers cannot possibly be aware of every product. We analyze how record labels use single releases as a strategic instrument to attract consumer attention in a competitive environment. In particular, we study how the advent of digitization has changed firm strategy. In accordance with predictions from a simple theoretical model, we show that record labels release more singles with shorter intervals in between when facing greater competitive pressure. We show that this effect is stronger in the digital age. With individual songs becoming readily available (forced unbundling), the attention generation motive becomes predominant and single releases more closely resemble a form of advertising.

Keywords: Consumer Attention, Information, Digitization, Recorded Music

JEL Classification: L82, M37, D83

Suggested Citation

Essling, Christian and Koenen, Johannes and Peukert, Christian, Competition for Attention in the Digital Age: The Case of Single Releases in the Recorded Music Industry (May 22, 2017). Information Economics and Policy, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2444708 or http://dx.doi.org/10.2139/ssrn.2444708

Christian Essling (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

Johannes Koenen

ARC Econ GmbH ( email )

Berliner Platz 13
Limburgerhof, 67117
Germany

HOME PAGE: http://arc-econ.de

Christian Peukert

University of Lausanne (HEC) ( email )

Unil Dorigny, Batiment Internef
Lausanne, 1015
Switzerland

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