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The Rise of Streaming Music and Implications for Music Production

Author

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  • Hiller R. Scott

    (Department of Economics, Fairfield University, 1073 N. Benson Rd., Fairfield, CT 06824 USA)

  • Walter Jason M.

    (Social Science Department, University of Wisconsin-Stout, 441B Harvey Hall, Menomonie, WI, USA)

Abstract

In this paper, we model the potential for streaming music, a non-durable product, to upend and displace durable music sales. As the popularity of streaming music increases producers will adjust their production to focus on the non-durable channel. We identify conditions under which the changes in music delivery will encourage musicians to release fewer songs, but at a higher quality, leading to market deepening and increased engagement. This change will complete the unbundling process in music production making the traditional bundled album of little importance. This tendency toward unbundling for individual musicians depends on a robust bundle from a delivery platform to provide value for consumer subscriptions. Beyond a model of consumer utility and producer profit, we analyze the most played songs of the large streaming music platform, Spotify, and compare those results to traditional album sales using Nielsen data.

Suggested Citation

  • Hiller R. Scott & Walter Jason M., 2017. "The Rise of Streaming Music and Implications for Music Production," Review of Network Economics, De Gruyter, vol. 16(4), pages 351-385, December.
    • Handle: RePEc:bpj:rneart:v:16:y:2017:i:4:p:351-385:n:2
    DOI: 10.1515/rne-2017-0064
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    References listed on IDEAS

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    Cited by:

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    3. Christian Peukert & Margaritha Windisch, 2023. "The Economics of Copyright in the Digital Age," CESifo Working Paper Series 10687, CESifo.
    4. Daniel Kaimann & Ilka Tanneberg & Joe Cox, 2021. "“I will survive”: Online streaming and the chart survival of music tracks," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(1), pages 3-20, January.

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