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Displacement and Complementary in the recorded music industry: evidence from France

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Listed:
  • Ivaldi, Marc
  • Nicolle, Ambre
  • Verboven, Frank
  • Zhang, Jiekai

Abstract

Do new digital consumption channels of music depress sales in old physical ones, or are they complementary? To answer this question, we exploit product-level variations in prices of about 30 million sales and streams of over 300 thousand products observed weekly between 2014 and 2017 for the entire French market. At the track-level, we find that streaming displaces digital sales. Similarly, at the album level, digital sales displace physical sales. At the more aggregate artist-level, digital sales displace physical sales, but streaming implies a promotional effect on physical sales. This complementarity is driven by popular genres, i.e., Pop and Urban Music. Most of our findings are robust to whether we consider the hits or include the products that belong to the long tail.

Suggested Citation

  • Ivaldi, Marc & Nicolle, Ambre & Verboven, Frank & Zhang, Jiekai, 2021. "Displacement and Complementary in the recorded music industry: evidence from France," TSE Working Papers 21-1199, Toulouse School of Economics (TSE), revised 07 Jan 2023.
    • Handle: RePEc:tse:wpaper:125467
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    More about this item

    Keywords

    Music industry; Music consumption; Digitization;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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