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The Effect of Digital Sharing Technologies on Music Markets: A Survival Analysis of Albums on Ranking Charts

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Author Info

  • Sudip Bhattacharjee

    () (Department of Operations and Information Management, School of Business, University of Connecticut, Storrs, Connecticut 06269)

  • Ram D. Gopal

    () (Department of Operations and Information Management, School of Business, University of Connecticut, Storrs, Connecticut 06269)

  • Kaveepan Lertwachara

    () (Department of Management, California Polytechnic State University, San Luis Obispo, California 93407)

  • James R. Marsden

    () (Department of Operations and Information Management, School of Business, University of Connecticut, Storrs, Connecticut 06269)

  • Rahul Telang

    () (H. John Heinz III School of Public Policy and Management, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213)

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    Abstract

    Recent technological and market forces have profoundly impacted the music industry. Emphasizing threats from peer-to-peer (P2P) technologies, the industry continues to seek sanctions against individuals who offer a significant number of songs for others to copy. Combining data on the performance of music albums on the Billboard charts with file sharing data from a popular network, we assess the impact of recent developments related to the music industry on survival of music albums on the charts and evaluate the specific impact of P2P sharing on an album's survival on the charts. In the post-P2P era, we find significantly reduced chart survival except for those albums that debut high on the charts. In addition, superstars and female artists continue to exhibit enhanced survival. Finally, we observe a narrowing of the advantage held by major labels. The second phase of our study isolates the impact of file sharing on album survival. We find that, although sharing does not hurt the survival of top-ranked albums, it does have a negative impact on low-ranked albums. These results point to increased risk from rapid information sharing for all but the "cream of the crop."

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    File URL: http://dx.doi.org/10.1287/mnsc.1070.0699
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    Bibliographic Info

    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 53 (2007)
    Issue (Month): 9 (September)
    Pages: 1359-1374

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    Handle: RePEc:inm:ormnsc:v:53:y:2007:i:9:p:1359-1374

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    Related research

    Keywords: peer-to-peer; digitized music; online file sharing; survival;

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    Cited by:
    1. Ugo Pagallo & Massimo Durante, 2009. "Three Roads to P2P Systems and Their Impact on Business Practices and Ethics," Journal of Business Ethics, Springer, vol. 90(4), pages 551-564, December.
    2. Adam Rennhoff, 2010. "The Consequences of “Consideration Payments”: Lessons from Radio Payola," Review of Industrial Organization, Springer, vol. 36(2), pages 133-147, March.
    3. Sumiko Asai, 2011. "Demand analysis of hit music in Japan," Journal of Cultural Economics, Springer, vol. 35(2), pages 101-117, May.
    4. Jens Leth Hougaard & Mich Tvede, 2009. "Selling Digital Music: Business Models for Public Goods," Discussion Papers 09-19, University of Copenhagen. Department of Economics.
    5. Christopher Klein & Shea Slonaker, 2010. "Chart Turnover and Sales in the Recorded Music Industry: 1990–2005," Review of Industrial Organization, Springer, vol. 36(4), pages 351-372, June.
    6. Smith, Michael D. & Telang, Rahul, 2010. "Piracy or promotion? The impact of broadband Internet penetration on DVD sales," Information Economics and Policy, Elsevier, vol. 22(4), pages 289-298, December.
    7. Felix Oberholzer-Gee & Koleman Strumpf, 2010. "File Sharing and Copyright," NBER Chapters, in: Innovation Policy and the Economy, Volume 10, pages 19-55 National Bureau of Economic Research, Inc.

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