Bhattacharjee, Gopal, Lertwachara, Marsden and Telang (2007)
|Bhattacharjee, Gopal, Lertwachara, Marsden and Telang (2007)|
|Title:||The effect of digital sharing technologies on music markets: A survival analysis of albums on ranking charts|
|Author(s):||Bhattacharjee, S., Gopal, R. D., Lertwachara, K., Marsden, J. R., Telang, R.|
|Citation:||Bhattacharjee, S., Gopal, R. D., Lertwachara, K., Marsden, J. R., & Telang, R. (2007). The effect of digital sharing technologies on music markets: A survival analysis of albums on ranking charts. Management Science, 53(9), 1359-1374.|
|Link(s):||Definitive , Open Access|
|Key Related Studies:|
|Linked by:||Martikainen (2011), Oberholzer-Gee and Strumpf (2010)|
|About the Data|
|Data Description:||Weekly rankings of 300+ albums on the Billboard top 100 chart and album-level sharing activity related to the same albums captured from the file sharing program WinMX.|
|Data Type:||Secondary data|
|Secondary Data Sources:|
|Data Collection Methods:|
|Data Analysis Methods:|
|Cross Country Study?:||No|
|Government or policy study?:||No|
|Time Period(s) of Collection:||
Recent technological and market forces have profoundly impacted the music industry. Emphasizing threats from peer-to-peer (P2P) technologies, the industry continues to seek sanctions against individuals who offer a significant number of songs for others to copy. Combining data on the performance of music albums on the Billboard charts with file sharing data from a popular network, we assess the impact of recent developments related to the music industry on survival of music albums on the charts and evaluate the specific impact of P2P sharing on an album’s survival on the charts. In the post-P2P era, we find significantly reduced chart survival except for those albums that debut high on the charts. In addition, superstars and female artists continue to exhibit enhanced survival. Finally, we observe a narrowing of the advantage held by major labels. The second phase of our study isolates the impact of file sharing on album survival. We find that, although sharing does not hurt the survival of top-ranked albums, it does have a negative impact on low-ranked albums. These results point to increased risk from rapid information sharing for all but the “cream of the crop.”
Main Results of the Study
- Debut rank has a highly negative impact on album survival, an impact even more pronounced for albums debuting lower on the charts. The superstar effect appears to be alive and well, with albums by such performers surviving approximately 35% longer. Albums promoted by major labels tend to survive longer than those promoted by minor labels.
- Since superstars and debut rank are important markers of success, firms that do the best job in enlisting superstars and successfully utilizing prerelease marketing to impact debut rank are well positioned to succeed in the new marketplace.
- There is evidence that minor labels are closing the gap with the major labels. The innovative approaches adopted by the minor labels might be emulated by major labels. In this vein, it has been suggested that sharing through online networks might have beneficial sampling and word-of-mouth effects. This study's results suggest otherwise, especially for albums debuting lower on the chart.
Policy Implications as Stated By Author
File sharing may take place before chart appearance, and such sharing could influence “if, when, and where” an album appears on the charts. However, music firms (labels) may be able to impact prerelease and/or prechart-appearance sharing and thus impact chart debut rank, for example by offering prerelease sampling opportunities. The impact of prerelease sharing needs to be tracked and evaluated.
Coverage of Study
|Level of aggregation:||Music albums|
|Period of material under study:||1995-2005|