Working Paper: CEPR ID: DP14038
Authors: Christian Peukert; Tobias Kretschmer
Abstract: We study the heterogeneous effects of online video platforms on the sales volume and sales distribution of recorded music. Identification comes from two natural experiments in Germany. In 2009, virtually all music videos were blocked from YouTube due to a legal dispute. In 2013, the dedicated platform VEVO entered the market, making videos of a large number of artists available overnight. Our estimatessuggest that restricting (enabling) access to online videos decreases (increases) recorded music sales on average by about 5-10%. We show that the effect operates independently of the nature of video content, suggesting that user-generated content is as effective as official content. Moreover, we highlight heterogeneity in this effect: Online music video disproportionally benefits sales of new artists and salesof mainstream music.
Keywords: digital distribution; platforms; user-generated content; natural experiment
JEL Codes: L15; L82
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Restricting access to online music videos (L82) | Decrease in recorded music sales (O39) |
| Blocking of music videos on YouTube in 2009 (L82) | Decrease in total weekly sales (L81) |
| Entry of Vevo in 2013 (L82) | Increase in total recorded music sales (Y10) |
| Availability of music videos on YouTube (L82) | Total weekly sales (L81) |
| User-generated content (D16) | Recorded music sales (Y10) |
| Heterogeneity in effects based on artist status (C21) | Recorded music sales (Y10) |