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Information and the Skewness of Music Sales


  • Ken Hendricks
  • Alan Sorensen


This paper studies the role of product discovery in the demand for recorded music. We show that releasing a new album causes a substantial and permanent increase in sales of the artist's old albums-especially if the new release is a hit. Patterns in these "backward spillovers" suggest that they result from consumers discovering the artist upon hearing the new release. To explore the implications of consumers' incomplete information, we estimate a simple, learning-based model of market demand. Our results imply that the distribution of sales is substantially more skewed than it would be if consumers were more fully informed. (c) 2009 by The University of Chicago. All rights reserved.

Suggested Citation

  • Ken Hendricks & Alan Sorensen, 2009. "Information and the Skewness of Music Sales," Journal of Political Economy, University of Chicago Press, vol. 117(2), pages 324-369, April.
  • Handle: RePEc:ucp:jpolec:v:117:y:2009:i:2:p:324-369

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    References listed on IDEAS

    1. Rob, Rafael & Waldfogel, Joel, 2006. "Piracy on the High C's: Music Downloading, Sales Displacement, and Social Welfare in a Sample of College Students," Journal of Law and Economics, University of Chicago Press, vol. 49(1), pages 29-62, April.
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    Cited by:

    1. Beck, Jonathan, 2008. "Diderot´s rule," Discussion Papers, Research Unit: Competition and Innovation SP II 2008-13, Social Science Research Center Berlin (WZB).
    2. Kaniel, Ron & Parham, Robert, 2017. "WSJ Category Kings – The impact of media attention on consumer and mutual fund investment decisions," Journal of Financial Economics, Elsevier, vol. 123(2), pages 337-356.
    3. Bourreau, Marc & Doğan, Pınar & Hong, Sounman, 2015. "Making money by giving it for free: Radiohead’s pre-release strategy for In Rainbows," Information Economics and Policy, Elsevier, vol. 32(C), pages 77-93.
    4. Christopher Klein & Shea Slonaker, 2010. "Chart Turnover and Sales in the Recorded Music Industry: 1990–2005," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 36(4), pages 351-372, June.
    5. Jin-Hyuk Kim & Tin Cheuk Leung, 2013. "Quantifying the Impacts of Digital Rights Management and E-Book Pricing on the E-Book Reader Market," Working Papers 13-03, NET Institute.
    6. Peukert, Christian & Kretschmer, Tobias, 2014. "Video Killed the Radio Star? Online Music Videos and Digital Music Sales," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100530, Verein für Socialpolitik / German Economic Association.
    7. Jonah Berger & Alan T. Sorensen & Scott J. Rasmussen, 2010. "Positive Effects of Negative Publicity: When Negative Reviews Increase Sales," Marketing Science, INFORMS, vol. 29(5), pages 815-827, 09-10.
    8. Claussen, Jörg & Kretschmer, Tobias & Mayrhofer, Philip, 2010. "Incentives for Quality over Time – The Case of Facebook Applications," Discussion Papers in Business Administration 12500, University of Munich, Munich School of Management.
    9. Andrew T. Ching & Tülin Erdem & Michael P. Keane, 2013. "Learning Models: An Assessment of Progress, Challenges and New Developments," Economics Papers 2013-W07, Economics Group, Nuffield College, University of Oxford.
    10. Keuschnigg, Marc, 2015. "Product Success in Cultural Markets: The Mediating Role of Familiarity, Peers, and Experts," MPRA Paper 63444, University Library of Munich, Germany.
    11. Gabriel Natividad & Olav Sorenson, 2011. "Spread Too Thin: Uncertainty Shocks and Diseconomies of Scope," Working Papers 11-04, NET Institute.
    12. Aguiar, Luis & Martens, Bertin, 2016. "Digital music consumption on the Internet: Evidence from clickstream data," Information Economics and Policy, Elsevier, vol. 34(C), pages 27-43.
    13. repec:kap:jculte:v:41:y:2017:i:4:d:10.1007_s10824-016-9272-y is not listed on IDEAS
    14. Leif Brandes & Stephan Nüesch & Egon Franck, 2016. "Death-related publicity as informational advertising: evidence from the music industry," Marketing Letters, Springer, vol. 27(1), pages 143-157, March.
    15. Craig L. Garthwaite, 2012. "You Get a Book! Demand Spillovers, Combative Advertising, and Celebrity Endorsements," NBER Working Papers 17915, National Bureau of Economic Research, Inc.
    16. repec:eee:iepoli:v:40:y:2017:i:c:p:26-40 is not listed on IDEAS
    17. Blomkvist, Katarina & Kappen, Philip & Zander, Ivo, 2014. "Superstar inventors—Towards a people-centric perspective on the geography of technological renewal in the multinational corporation," Research Policy, Elsevier, vol. 43(4), pages 669-682.
    18. Halberstam, Yosh & Montagnes, B. Pablo, 2015. "Presidential coattails versus the median voter: Senator selection in US elections," Journal of Public Economics, Elsevier, vol. 121(C), pages 40-51.
    19. Richard Friberg & Erik Grönqvist, 2012. "Do Expert Reviews Affect the Demand for Wine?," American Economic Journal: Applied Economics, American Economic Association, vol. 4(1), pages 193-211, January.
    20. Arai Koki, 2013. "Analyzing the Motivations of a Joint Venture to Provide High-Quality Music Download Service to Mobile Phones," Asian Journal of Law and Economics, De Gruyter, vol. 4(1-2), pages 1-31, December.
    21. Marc Bourreau & Michel Gensollen & François Moreau & Patrick Waelbroeck, 2013. "“Selling less of more?” The impact of digitization on record companies," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 37(3), pages 327-346, August.
    22. Brett Danaher & Samita Dhanasobhon & Michael D. Smith & Rahul Telang, 2010. "Converting Pirates Without Cannibalizing Purchasers: The Impact of Digital Distribution on Physical Sales and Internet Piracy," Marketing Science, INFORMS, vol. 29(6), pages 1138-1151, 11-12.
    23. Samuel Cameron, 2016. "Past, present and future: music economics at the crossroads," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 40(1), pages 1-12, February.
    24. Scott Hiller, R., 2016. "Sales displacement and streaming music: Evidence from YouTube," Information Economics and Policy, Elsevier, vol. 34(C), pages 16-26.

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