Don't Play it Again Sam: Radio Play, Record Sales, and Property Rights

39 Pages Posted: 11 Jan 2007  

Stan J. Liebowitz

University of Texas at Dallas - School of Management - Department of Finance & Managerial Economics

Date Written: January 5, 2007

Abstract

This paper undertakes an econometric investigation of the impact of radio play on sales of sound recordings using a sample of American cities. The results indicate that radio play does not have the positive impact on record sales normally attributed to it and instead appears to have an economically important negative impact, implying that overall radio listening is more of a substitute for the purchase of sound recordings than it is a complement. This finding indicates that creating a set of property rights to allow this market to function properly is different than has been suggested by prior research. This research also exposes a fallacy of composition in applying to an entire market a generally accepted positive relationship that holds for individual units. New technologies changing the nature of radio broadcasts are likely to make this topic increasingly important in the coming years.

Keywords: radio, albums, sound recordings, payola, broadcasting, fallacy of composition

JEL Classification: K11, L8,L5, O3

Suggested Citation

Liebowitz, Stan J., Don't Play it Again Sam: Radio Play, Record Sales, and Property Rights (January 5, 2007). Available at SSRN: https://ssrn.com/abstract=956527 or http://dx.doi.org/10.2139/ssrn.956527

Stan J. Liebowitz (Contact Author)

University of Texas at Dallas - School of Management - Department of Finance & Managerial Economics ( email )

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