Working Paper: CEPR ID: DP16006
Authors: Marc Ivaldi; Ambre Nicolle; Frank Verboven; Jiekai Zhang
Abstract: Do new digital consumption channels of music depress sales in old physical ones, or arethey complementary? To answer this question, we exploit product-level variations in prices ofabout 30 million sales and streams of over 300 thousand products observed weekly between2014 and 2017 for the entire French market. At the track-level, we find that streamingdisplaces digital sales. Similarly, at the album level, digital sales displace physical sales. Atthe more aggregate artist-level, digital sales displace physical sales, but streaming implies apromotional effect on physical sales. This complementarity is driven by popular genres, i.e.,Pop and Urban Music. Most of our findings are robust to whether we consider the hits orinclude the products that belong to the long tail.
Keywords: music industry; music consumption; digitization
JEL Codes: D12; L82; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| digital sales (L81) | streaming (L82) |
| streaming (L82) | digital sales (L81) |
| digital sales (L81) | physical sales (L81) |
| streaming (L82) | physical sales (L81) |