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The economics of social media stars: An empirical investigation of stardom, popularity, and success on YouTube

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  • Budzinski, Oliver
  • Gaenssle, Sophia

Abstract

The economic literature on the superstar phenomenon provides empirical evidence on different types of stars, above all athletes and musicians. A new and, to our best knowledge, unexplored area of this star theory arouse with the development of social media markets. In this paper, we analyse a unique sample of 200 YouTube stars out of four different video categories to address the research gap. By employing econometric methods from panel data analysis, we contribute to answering the following research questions: (i) Are the classic theoretical concepts of popularity and superstardom by Rosen, MacDonald and Adler applicable? (ii) Can social media stars actively influence their popularity by employing special upload strategies? We find empirical evidence that former success positively and significantly influences the current success of social media stars, as theoretically presumed by MacDonald. Furthermore, the results support Adler's assumptions that the most popular stars snowball into superstardom due to higher growth rates. Finally, our investigation shows that social media stars can actively influence their popularity with distinctive upload strategies and market behaviour.

Suggested Citation

  • Budzinski, Oliver & Gaenssle, Sophia, 2018. "The economics of social media stars: An empirical investigation of stardom, popularity, and success on YouTube," Ilmenau Economics Discussion Papers 112, Ilmenau University of Technology, Institute of Economics.
    • Handle: RePEc:zbw:tuiedp:112
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    1. Bernard J. Jansen & Mimi Zhang & Kate Sobel & Abdur Chowdury, 2009. "Twitter power: Tweets as electronic word of mouth," Journal of the American Society for Information Science and Technology, Association for Information Science & Technology, vol. 60(11), pages 2169-2188, November.
    2. Adler, Moshe, 1985. "Stardom and Talent," American Economic Review, American Economic Association, vol. 75(1), pages 208-212, March.
    3. Budzinski, Oliver & Pannicke, Julia, 2017. "Does popularity matter in a TV song competition? Evidence from a national music contest," Ilmenau Economics Discussion Papers 106, Ilmenau University of Technology, Institute of Economics.
    4. Brinja Meiseberg, 2014. "Trust the artist versus trust the tale: performance implications of talent and self-marketing in folk music," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 38(1), pages 9-42, February.
    5. Egon Franck & Stephan Nüesch, 2007. "Avoiding ‘Star Wars’– Celebrity Creation as Media Strategy," Kyklos, Wiley Blackwell, vol. 60(2), pages 211-230, May.
    6. Josef Falkinger, 2008. "Limited Attention as a Scarce Resource in Information-Rich Economies," Economic Journal, Royal Economic Society, vol. 118(532), pages 1596-1620, October.
    7. H. Leibenstein, 1950. "Bandwagon, Snob, and Veblen Effects in the Theory of Consumers' Demand," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 64(2), pages 183-207.
    8. MacDonald, Glenn M, 1988. "The Economics of Rising Stars," American Economic Review, American Economic Association, vol. 78(1), pages 155-166, March.
    9. Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-858, December.
    10. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
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    Cited by:

    1. Gaenssle Sophia & Budzinski Oliver & Astakhova Daria, 2018. "Conquering the Box Office: Factors Influencing Success of International Movies in Russia," Review of Network Economics, De Gruyter, vol. 17(4), pages 245-266, December.
    2. Budzinski, Oliver & Lindstädt-Dreusicke, Nadine, 2018. "The new media economics of video-on-demand markets: Lessons for competition policy," Ilmenau Economics Discussion Papers 116, Ilmenau University of Technology, Institute of Economics.
    3. Budzinski, Oliver & Kohlschreiber, Marie & Kuchinke, Björn & Pannicke, Julia, 2019. "Does music quality matter for audience voters in a music contest?," Ilmenau Economics Discussion Papers 122, Ilmenau University of Technology, Institute of Economics.
    4. Budzinski, Oliver & Lindstädt-Dreusicke, Nadine, 2019. "The new media economics of video-on-demand markets: Lessons for competition policy (updated version)," Ilmenau Economics Discussion Papers 125, Ilmenau University of Technology, Institute of Economics.
    5. Oliver Budzinski & Sophia Gaenssle & Nadine Lindstädt-Dreusicke, 2021. "The battle of YouTube, TV and Netflix: an empirical analysis of competition in audiovisual media markets," SN Business & Economics, Springer, vol. 1(9), pages 1-26, September.
    6. Budzinski, Oliver & Kuchinke, Björn, 2018. "Modern industrial organization theory of media markets and competition policy implications," Ilmenau Economics Discussion Papers 115, Ilmenau University of Technology, Institute of Economics.
    7. Gaenssle, Sophia & Budzinski, Oliver, 2019. "Stars in social media: New light through old windows?," Ilmenau Economics Discussion Papers 123, Ilmenau University of Technology, Institute of Economics.
    8. Mourelatos, Evangelos & Mourelatos, Haris, 2022. "Online video sharing and revenues during the Pandemic. Evidence from musical stream data," GLO Discussion Paper Series 1050 [pre.], Global Labor Organization (GLO).
    9. Mourelatos, Evangelos & Mourelatos, Haris, 2022. "Online video sharing and revenues during the Pandemic. Evidence from musical stream data," GLO Discussion Paper Series 1050, Global Labor Organization (GLO).

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    More about this item

    Keywords

    social media; digital media; popularity; superstar theory; cultural economics; media economics;
    All these keywords.

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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