Kretschmer and Peuckert (2017)

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1. Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare 2. Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)? 3. Harmony of interest assumption between authors and publishers (creators and producers/investors) 4. Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption) 5. Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)

A. Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right) B. Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction) C. Mass digitisation/orphan works (non-use; extended collective licensing) D. Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability) E. Fair remuneration (levies; copyright contracts) F. Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

Source Details

Kretschmer and Peuckert (2017)
Title: Video Killed the Radio Star? Online Music Videos and Recorded Music Sales
Author(s): Tobias Kretschmer, Christian Peukert
Year: 2017
Citation: Kretschmer, T. And Peukert, C. (2017) Video Killed the Radio Star? Online Music Videos and Recorded Music Sales. CEP Discussion Paper No 1265.
Link(s): Open Access
Key Related Studies:
Discipline:
Linked by:
About the Data
Data Description: The study consists of two natural experiments: firstly in April 2009 to estimate the effect of removing access to music videos on YouTube, and; secondly in October 2013 to estimate the effect of making official music videos available on VEVO. Sales data were obtained from GfK Entertainment, which tracks the weekly number of units sold on physical and digital mediums for the 1,000 highest-grossing songs in Germany. For each song, the researchers determined whether a music video was also available on YouTube or VEVO. Thereafter, the researchers estimated a difference-in-differences model to compare sales of songs with videos to those without videos.
Data Type: Secondary data
Secondary Data Sources:
Data Collection Methods:
Data Analysis Methods:
Industry(ies):
Country(ies):
Cross Country Study?: No
Comparative Study?: No
Literature review?: No
Government or policy study?: No
Time Period(s) of Collection:
  • April 2009
  • October 2013
Funder(s):

Abstract

“We study how YouTube, as a global digital distribution platform for music content, affects sales volume and sales distribution of recorded music. Within songs, YouTube may displace record sales, or it may enhance them. Across songs, YouTube may increase competition for consumer awareness. Identification comes from two quasi-experiments in Germany. In 2009, virtually all official music videos were blocked from YouTube due to a legal dispute. The situation remained largely unchanged until the dedicated platform VEVO entered the market in 2013, making videos of a large number of artists available over night. We find that both restricting and enabling access to online videos has consistent complementary effects on recorded music sales. We show that the effect operates independent of the nature of video content, suggesting that user-generated content is as effective in affecting revenues of firms as self-produced official content. Moreover, YouTube is much more effective in triggering sales of songs by new artists compared to established artists, and disproportionally benefits sales of mainstream music. We find that this pattern - new artists and mainstream artists benefiting disproportionately from video availability on YouTube - is consistent with the type of recommender systems that YouTube had in place. Finally, we discuss implications that go beyond the application to the music industry. “

Main Results of the Study

The study finds that online sharing platforms play a complementary role to music sales by providing users with a means of music discovery. For example, where music videos are available on YouTube, sales of the primary music track (physical and digital) increase by approximately 20% weekly; similarly, if music videos are removed from YouTube this reduces sales by approx. 20%, tantamount to 58,000 EUR.

Benefits of music video availability are not impacted by the presence of user-generated content, and the same increase in weekly sales and streams is evident on VEVO, a closed platform with only authorised, official music videos. However, some platforms (in this case YouTube) disproportionately favour sales of content by new artists and mass-market artists (less so local artists) through recommender systems and links to the most-viewed, top-favourited tracks etc (increasing sales by 34-70%).

The study concludes that due to the differentiated product offered by online sharing platforms (e.g. offering a music video rather than music) this means that any substitution effect is unlikely.

Policy Implications as Stated By Author

Whilst the study does not offer any explicit policy recommendations, the findings suggest that online platforms have less of a displacement effect (e.g. value gap), and more of a music discovery/complementary role, effectively increasing sales rather than substituting them.



Coverage of Study

Coverage of Fundamental Issues
Issue Included within Study
Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare
Green-tick.png
Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)?
Harmony of interest assumption between authors and publishers (creators and producers/investors)
Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption)
Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)
Coverage of Evidence Based Policies
Issue Included within Study
Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right)
Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction)
Mass digitisation/orphan works (non-use; extended collective licensing)
Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability)
Fair remuneration (levies; copyright contracts)
Green-tick.png
Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

Datasets