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Video Killed the Radio Star? Online Music Videos and Recorded Music Sales

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  • Kretschmer, Tobias
  • Peukert, Christian

Abstract

We study the heterogeneous effects of online video platforms on the sales volume and sales distribution of recorded music. Identification comes from two natural experiments in Germany. In 2009, virtually all music videos were blocked from YouTube due to a legal dispute. In 2013, the dedicated platform VEVO entered the market, making videos of a large number of artists available overnight. Our estimates suggest that restricting (enabling) access to online videos decreases (increases) recorded music sales on average by about 5-10%. We show that the effect operates independently of the nature of video content, suggesting that user-generated content is as effective as official content. Moreover, we highlight heterogeneity in this effect: Online music video disproportionally benefits sales of new artists and sales of mainstream music.

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  • Kretschmer, Tobias & Peukert, Christian, 2019. "Video Killed the Radio Star? Online Music Videos and Recorded Music Sales," CEPR Discussion Papers 14038, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:14038
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    3. Marc Ivaldi & Ambre Nicolle & Frank Verboven & Jiekai Zhang, 2024. "Displacement and complementarity in the recorded music industry: evidence from France," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 48(1), pages 43-94, March.
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    6. Erdem Dogukan Yilmaz & Tim Meyer & Milan Miric, 2023. "Preventing Others from Commercializing Your Innovation: Evidence from Creative Commons Licenses," Papers 2309.00536, arXiv.org.
    7. Johannes Loh, 2022. "Selection, Consumption, and New Music Exploration in an Online Social Network: A Dyadic Approach," CESifo Working Paper Series 10120, CESifo.
    8. Kevin J. Boudreau & Lars Bo Jeppesen & Milan Miric, 2022. "Competing on freemium: Digital competition with network effects," Strategic Management Journal, Wiley Blackwell, vol. 43(7), pages 1374-1401, July.
    9. Nils Wlömert & Dominik Papies & Michel Clement & Martin Spann, 2024. "Frontiers: The Interplay of User-Generated Content, Content Industry Revenues, and Platform Regulation: Quasi-Experimental Evidence from YouTube," Marketing Science, INFORMS, vol. 43(1), pages 1-12, January.
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    More about this item

    Keywords

    Digital distribution platforms; User-generated content; Natural experiment;
    All these keywords.

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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