The Web's Promotional Effect and Artists' Strategies
AbstractThe paper explores one of the new business models of the music market proposed by Varian (2005): the importance of the promotional effect of web-based diffusion. An indirect form of such investment consists in non-opposition by artists against the circulation of their music files online, or, likewise, their choice of permitting free downloads of their music albums. The profits lost from legal sales - online or on traditional supports - may be off-set by promotional advantages deriving from greater diffusion, with an increase in the artist's market share. The model assumes the existence of a strong network effect and an exchange of information, opinions and contents among web users. The model's results are determined by the initial conditions, i.e. by an artist's market share at an initial instant of time: or in other words, by his/her popularity. It is shown that emerging artists should make maximum investment in promotion, so that the diffusion of their work can be driven by the network effect and they can emerge from anonymity. Instead, for well-established artists, whose market shares are already large, the optimal strategy is to make the least promotional effort, given that the spontaneous diffusion of their work is already high.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali in its series Working Papers with number 345.
Date of creation: Jul 2010
Date of revision:
Artists' strategies; network effect; peer to peer; promotion;
Find related papers by JEL classification:
- L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-02 (All new papers)
- NEP-CUL-2010-10-02 (Cultural Economics)
- NEP-ICT-2010-10-02 (Information & Communication Technologies)
- NEP-NET-2010-10-02 (Network Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michele Boldrin & David K Levine, 2002.
"The Case Against Intellectual Property,"
Levine's Working Paper Archive
618897000000000003, David K. Levine.
- BELLEFLAMME, Paul & PICARD, Pierre M., .
"Piracy and competition,"
CORE Discussion Papers RP
-1919, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Paul Belleflamme & Pierre M. Picard, 2004. "Piracy and Competition," CESifo Working Paper Series 1350, CESifo Group Munich.
- Paul, BELLEFLAMME & Pierre, PICARD, 2005. "Piracy and competition," Discussion Papers (ECON - DÃ©partement des Sciences Economiques) 2005057, Université catholique de Louvain, Département des Sciences Economiques.
- BELLEFLAMME, Paul & PICARD, Pierre, 2005. "Piracy and competition," CORE Discussion Papers 2005083, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Josh Lerner & Jean Tirole, 2004.
"The Economics of Technology Sharing: Open Source and Beyond,"
NBER Working Papers
10956, National Bureau of Economic Research, Inc.
- Josh Lerner & Jean Tirole, 2005. "The Economics of Technology Sharing: Open Source and Beyond," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 99-120, Spring.
- Rick Harbaugh & Rahul Khemka, . "Does Copyright Enforcement Encourage Piracy?," Claremont Colleges Working Papers 2000-14, Claremont Colleges.
- Fabio FIORILLO & Agnese SACCHI, 2010. "I Want to Free-ride. An Opportunistic View on Decentralization Versus Centralization Problem," Working Papers 346, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
- Alberto RUSSO, 2012.
"A Stochastic Model of Wealth Accumulation with Class Division,"
373, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
- Alberto Russo, 2014. "A Stochastic Model of Wealth Accumulation with Class Division," Metroeconomica, Wiley Blackwell, vol. 65(1), pages 1-35, 02.
- Simone LENZU & Gabriele TEDESCHI, 2012.
"Systemic risk on different interbank network topologies,"
375, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
- Lenzu, Simone & Tedeschi, Gabriele, 2012. "Systemic risk on different interbank network topologies," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 391(18), pages 4331-4341.
- Luca RICCETTI, 2011. "A Copula-GARCH Model for Macro Asset Allocation of a Portfolio with Commodities: an Out-of-Sample Analysis," Working Papers 355, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
- Elena AMBROSETTI & Eralba CELA & Tineke FOKKEMA, 2011. "The Remittances Behaviour of the Second Generation in Europe: Altruism or Self-Interest?," Working Papers 368, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
- Ruggero GRILLI & Gabriele TEDESCHI & Mauro GALLEGATI, 2012. "Markets connectivity and financial contagion," Working Papers 382, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maurizio Mariotti).
If references are entirely missing, you can add them using this form.