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

63 Pages Posted: 1 Dec 2022

See all articles by Marc Ivaldi

Marc Ivaldi

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

Ambre Nicolle

ISTO, LMU Munich; affiliation not provided to SSRN

Frank Verboven

KU Leuven

Jiekai Zhang

Hanken School of Economics; Helsinki Graduate School of Economics

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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 variation in sales and prices of over 4 million products, observed weekly between 2014 and 2017 for the entire French market. A unique feature of our data is that we observe sales for both physical and digital products, as well as streaming consumption. At the track-level, we find that streaming displaces digital 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 Variety. Most of our findings are robust to whether we consider the hits or include the products that belong to the long tail. Our findings bridge two streams of literature as we show that displacement between consumption channels at the product level can coexist with complementarity at a more aggregate level.

Keywords: Digitization, Digital distribution platforms, Music industry, Music consumption

Suggested Citation

Ivaldi, Marc and Nicolle, Ambre and Verboven, Frank and Zhang, Jiekai, Displacement and Complementarity in the Recorded Music Industry: Evidence from France. Available at SSRN: https://ssrn.com/abstract=4290220 or http://dx.doi.org/10.2139/ssrn.4290220

Marc Ivaldi

Toulouse School of Economics ( email )

Manufacture des Tabacs
21 Allee de Brienne bat. F
Toulouse Cedex, F-31000
France
+33 5 61 12 8592 (Phone)
+33 5 61 12 8637 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Ambre Nicolle (Contact Author)

ISTO, LMU Munich ( email )

Kaulbachstr, 45
Munich, 80539
Germany

affiliation not provided to SSRN

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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