Displacement and Complementarity in the Recorded Music Industry: Evidence from France

42 Pages Posted: 24 May 2021

See all articles by Marc Ivaldi

Marc Ivaldi

Toulouse School of Economics; Centre for Economic Policy Research (CEPR)

Ambre Nicolle

ISTO, LMU Munich; CREST-ENSAI - Campus de Ker-Lann

Frank Verboven

KU Leuven

Jiekai Zhang

Hanken School of Economics; Helsinki Graduate School of Economics

Date Written: April 1, 2021

Abstract

Do new digital consumption channels of music depress sales in old physical ones, or are they complementary? To answer this question, we exploit product-level variations in prices of about 30 million sales and streams of over 300 thousand products observed weekly between 2014 and 2017 for the entire French market. At the track-level, we find that streaming displaces digital sales. Similarly, at the album level, digital sales displace physical sales. At the more aggregate artist level, digital sales displace physical sales, but streaming implies a promotional effect on physical sales. This complementarity is driven by popular genres, i.e., Pop and Urban Music. Most of our findings are robust to whether we consider the hits or include the products that belong to the long tail.

JEL Classification: D12, L82, O33

Suggested Citation

Ivaldi, Marc and Nicolle, Ambre and Nicolle, Ambre and Verboven, Frank and Zhang, Jiekai, Displacement and Complementarity in the Recorded Music Industry: Evidence from France (April 1, 2021). CEPR Discussion Paper No. DP16006, Available at SSRN: https://ssrn.com/abstract=3846091

Marc Ivaldi (Contact Author)

Toulouse School of Economics ( email )

Manufacture des Tabacs
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Toulouse Cedex, F-31000
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Centre for Economic Policy Research (CEPR)

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United Kingdom

Ambre Nicolle

ISTO, LMU Munich ( email )

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Munich, 80539
Germany

CREST-ENSAI - Campus de Ker-Lann ( email )

Rue Blaise Pascal - BP 37203
35712 BRUZ
Rennes
France

Frank Verboven

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

Jiekai Zhang

Hanken School of Economics ( email )

PB 287
Helsinki, Vaasa 65101
Finland

Helsinki Graduate School of Economics ( email )

P.O. Box 17 (Arkadiankatu 7)
Helsinki, FI00014
Finland

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