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Superstars and the long tail: The impact of technology on market structure in media industries

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  • Weeds, Helen

Abstract

Technological change has transformed creative media industries. Digitization lowers the costs of recording, storage, reproduction and distribution, while computer-based editing facilitates quality enhancement and special effects. Digital technology has altered the distribution of sales in ways that remain poorly understood: while some commentators have highlighted the growth of the “long tail”, others find digitization has raised the importance of “superstars”. This paper develops a theoretical model of differentiated goods with endogenous quality to investigate the impact of digitization on the distribution of firms. It finds that supply-side factors can generate superstars and long tail outcomes, and that coexistence of both phenomena can be explained by either a fall in fixed costs for basic products or a decline in market size.

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Bibliographic Info

Article provided by Elsevier in its journal Information Economics and Policy.

Volume (Year): 24 (2012)
Issue (Month): 1 ()
Pages: 60-68

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Handle: RePEc:eee:iepoli:v:24:y:2012:i:1:p:60-68

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Web page: http://www.elsevier.com/locate/inca/505549

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Keywords: Digital media; Creative industries; Superstars; Long tail;

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