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Superstars and the Long Tail: The impact of technology on market structure in media industries

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Helen Weeds ()
Abstract

Technological change is transforming media industries. Digitization lowers the cost of recording, storage, reproduction and distribution, while computer-based editing facilitates higher quality and special effects. With electronic distribution, a vast range of content can be made available to consumers at little cost. Meanwhile, the distribution of industry production and sales appears to be shifting: the late 20th century was the era of the “hit parade”, but in the 21st attention has shifted to the “long tail”. This paper develops a free entry model of differentiated products with endogenous quality and heterogeneous types to examine the implications of technological change for market structure, quality, and the distribution of firms in media industries. This framework can be used to assess current and future trends in media industries.

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Paper provided by University of Essex, Department of Economics in its series Economics Discussion Papers with number 669.

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Date of creation: 29 Jun 2009
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Handle: RePEc:esx:essedp:669

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  5. Brito, Duarte, 2003. "Preemptive mergers under spatial competition," International Journal of Industrial Organization, Elsevier, vol. 21(10), pages 1601-1622, December. [Downloadable!] (restricted)
  6. Armstrong, Mark & Wright, Julian, 2008. "Mobile Call Termination," MPRA Paper 2344, University Library of Munich, Germany. [Downloadable!]
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  7. Simon P. Anderson, 2005. "Market Provision of Broadcasting: A Welfare Analysis," Review of Economic Studies, Blackwell Publishing, vol. 72(4), pages 947-972, October. [Downloadable!] (restricted)
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  8. V. Bhaskar & Ted To, 2004. "Is Perfect Price Discrimination Really Efficient? An Analysis of Free Entry," RAND Journal of Economics, The RAND Corporation, vol. 35(4), pages 762-776, Winter.
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  9. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June. [Downloadable!] (restricted)
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