Posts Tagged ‘record sales


The Recorded Music Market in Germany, 2003-2013

The German Federal Association of Music Industry (Bundesverband Musikindustrie – BVMI) reported a slight growth of recorded music sales by 1.2 percent for 2013. The main reason for the first increase of music sales in the past 15 years were growing digital music sales by 11.7 percent from 2012 to 2013. At the same time, the physical music sales moderately declined by 1.5 percent to EUR 1.12bn. Whereas CD sales fell by 1.3 percent to EUR 1.0bn, the sales of vinyl records grew heavily by 47.2 percent to EUR 29.0m in 2013. Since the CD has still a market share of 69.8 percent, one should be cautious to speak about a turnaround of the German recorded music market. A stabilization of the physical music sales is unrealistic and the increase of digital music sales has to over-compensate the loss in the physical market segment. Although the revenue from ad-supported and subscription music services increased by 91.2 percent to EUR 68.0m, the single-track download sales fell for the first time by 4.4 percent to EUR 104.0m in 2013, which makes a turnaround scenario highly questionable.

In the following, the future development of the German recorded music market will be analysed based on the BVMI report as well as on historic empirical data.

Continue reading ‘The Recorded Music Market in Germany, 2003-2013’


How Bad Is Music File Sharing? – part 21

A widely discussed study on music file sharing is Felix Oberholzer-Gee’s and Koleman Strumpf’s paper ”The Effect of File Sharing on Record Sales: An Empirical Analysis”, which was originally made accessable online to the public as a Harvard Business School working paper in 2004 and was eventually published, after revisions, in the Journal of Political Economy 2007.

Continue reading ‘How Bad Is Music File Sharing? – part 21’


How Bad Is Music File Sharing? – Part 11

Holland Mortimer’s and Sorensen’s working paper does not directly address the relationship between file sharing and record sales, but the authors indirectly show that file sharing affected the trade-off between sales of recorded music and concert revenues. They come to the conclusion that the advent of file sharing in 1999 appears “(…) to have eroded the profitability of selling record albums.” However, these changes “(…) may have similtaneously boosted demand for live performances. (…) For artists, the decline in revenues from recorded music after 1998 is striking, but appears to have been more than offset by a concomitant increase in concert revenue. Total industry revenues, on the other hand, have not fully recovered, despite the increasing contribution of concert revenue to the total” (Holland Mortimer and Sorensen 2005: 32).

More can be read here. Continue reading ‘How Bad Is Music File Sharing? – Part 11’


How Bad Is Music File Sharing? – Part 5

Liebowitz tried to provide theoretical evidence in several papers (2002, 2003, 2005) that there is negative impact of P2P file sharing on record sales. The most elabatored paper is his article in the Journal of Law and Economics, which fused earlier research on this topic (Liebowitz 2006). Liebowitz’s arguments are based on microeconomic theory and he identifies four effects of file sharing that might have an impact on record sales: substitution, sampling/exposure/penetration, network effects and indirect appropriability. Liebowitz analyses all four effects and concludedthat the substitution effect is dominant over the sampling effect, which can be also negative under specific circumstances. All other effects that are positively correlated with record sales are negligible. Further, he investigated other factors that might affect record sales, but none of them are able to explain the decrease of record sales in the past 10 years. Continue reading ‘How Bad Is Music File Sharing? – Part 5’

June 2023



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