In the past few days two studies on the impact of music streaming on recorded music sales surfaced. The Country Music Association (CMA) presented study results that streaming services are more successful in fostering music sales than radio. It was reported that more than a quarter of the respondents purchased music after streaming it compared to eight percent of radio listeners. Since the CMA study is not available, the results cannot be seriously assessed. Therefore, we rely on a study of Stephen McBride, a researcher of the Science Team at Pandora Media. He testified before the U.S. Copyright Royalty Judges and presented evidence that show a positive impact on music sales. In a nutshell, he highlights that listening to a song on Pandora increases music sales be more than 2 percent – a moderate “Pandora effect”, as he called it. In following, I will analyse McBride’s findings in the so-called Music Sales Experiments that were conducted by Pandora’s science team. Learn more about it here:
Posts Tagged ‘sampling effect
In the past few years several studies on the impact of P2P music file sharing on recorded music sales were published. They came to very different and even conflicting results, as I highlighted in a 25 part blog series. A recently published study now shifts the focus from file sharing to music video online streaming. R. Scott Hiller of Fairfield University and Jin-Hyuk Kim of University of Colorado Boulder analysed the sales displacement effect of YouTube in a paper entitled “Online Music, Sales Displacement, and Internet Search: Evidence from YouTube“. They concluded that Warner Music Group sold significantly more units of its Billboard 200 albums, when the Warner content was removed from YouTube due to a conflict on licensing fees. In addition, they found no evidence that the blackout had a negative promotional effect for Warner artists.
You can read more about this study and my assessment of the results here:
The objective of Brigitte Andersen and Marion Frenz’s study entitled “The Impact of Music Downloads and the P2P File-Sharing on the Purchase of Music”,(2007/08), which was later published in the Journal of Evolutionary Economics under the title “Don’t blame the P2P file-sharers: The Impact of Free Music Downloads on the Purchase of Music CDs in Canada” (2010) was to determine how the downloading of music files through P2P networks influences music purchases in Canada. They used data from a representative survey of the Canadian population aged 15 and older collected by Decima Research for Industry Canada, in which 2,100 repondents were also asked how many CDs and non-physical music tracks they purchased in the last two months and how much they paid for it on average. They show in their paper “(…) that P2P file-sharing is not to blame for the decline in CD markets. Music markets are not simply undermined by free music downloading and P2P file-sharing, due to the sampling effect” (2010: 735).
In the article “Do Artists Benefit from Online Music Sharing?”, which is based on a 2003 working paper, Gopal et al. (2006) present a model of music file sharing to explain the impact of technological and economic incentives to sample, purchase, and pirate music. The results of the model indicate that lowering the cost of sampling by file sharing will motivate more music consumers to purchase music online. In contrast, the restriction or even prevention of sampling will hurt the music industry in the long run. Read more here: Continue reading ‘How Bad Is Music File Sharing? – Part 16’
Bounie et al. conducted an anonymous online survey in two French graduate schools in order to examine the factors that influence the probability to increase/decrease CD purchases after acquiring MP3 files. The results originally published in a 2005 working paper suggest “(…) that there exist two populations of music consumers: people who sample music a lot (explorers) and those who do not sample (the pirates)” (Bounie et al. 2005: 1). This result indicates that music fans among students prefer to sample music and, therefore, their purchases of CDs tend to increase, whereas students with little interest in music use MP3 files as direct substitute for CDs. More details you can find here. Continue reading ‘How Bad Is Music File Sharing? – Part 12’
Wendy Chi examined in a John Hopkins University working paper (Chi 2008) whether file sharing crowds out purchases of physical and digital music by using Forrester Research’s consumer mail surveys for the years 2004 to 2006, which are representative samples for the U.S. and Canada. In her study, Chi comes to the result that “illegal” downloads and physical and non-physical music purchases are positively correlated and that the sampling effect of file sharing dominates the substitution effect. Therefore filesharing does not necessarily hurt music sales. Why this should be the case can be read here. Continue reading ‘How Bad Is Music File Sharing? – Part 10’
Martin Peitz from the University of Mannheim and Patrick Waelbroeck from the Ecole nationale supérieure des télécommunications in Paris focus in several articles on the impact of file sharing on music record sales. In a 2004 article in the Review of Economic Research on Copyright Issues they provided empirical evidence that music downloading have caused a worldwide reduction in music sales of about 20%. In contrast, they argue on the basis of a theoretical model in a 2006 article in the International Journal of Industrial Organization – based on 2005-working paper – that due to the sampling effect the record labels do not necessarily suffer from file sharing activities. How the come to these different conclusions can be read here. Continue reading ‘How Bad Is Music File Sharing? – Part 8’