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

64 Pages Posted: 7 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

University of Lausanne (HEC)

Multiple version iconThere are 2 versions of this paper

Date Written: October 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, Natural Experiment, User-generated content

JEL Classification: L15, L82

Suggested Citation

Kretschmer, Tobias and Peukert, Christian, Video Killed the Radio Star? Online Music Videos and Recorded Music Sales (October 2019). CEPR Discussion Paper No. DP14038, Available at SSRN: https://ssrn.com/abstract=3465750

Tobias Kretschmer (Contact Author)

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

University of Lausanne (HEC) ( email )

Unil Dorigny, Batiment Internef
Lausanne, 1015
Switzerland

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