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

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  • Tobias Kretschmer

    (Ludwig-Maximilians-University of Munich, 80539 Munich, Germany; Centre for Economic Policy Research, London EC1V 0DX, United Kingdom)

  • Christian Peukert

    (Católica Lisbon School of Business and Economics, Universidade Católica Portuguesa, 1649-023 Lisbon, Portugal; Center for Law and Economics, ETH Zurich, 8092 Zurich, Switzerland)

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 as a result of 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 videos disproportionally benefit sales of new artists and sales of mainstream music.

Suggested Citation

  • Tobias Kretschmer & Christian Peukert, 2020. "Video Killed the Radio Star? Online Music Videos and Recorded Music Sales," Information Systems Research, INFORMS, vol. 31(3), pages 776-800, September.
    • Handle: RePEc:inm:orisre:v:31:y:2020:i:3:p:776-800
    DOI: 10.1287/isre.2019.0915
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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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