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Another loudness war: how record labels compete for consumer attention


Essling, Christian; Koenen, Johannes; Peukert, Christian (2015). Another loudness war: how record labels compete for consumer attention. SSRN 2444708, University of Zurich.

Abstract

In markets with thousands of products, firms cannot take it for granted that consumers are even aware of their articles’ existence. Advertising and actions to attract consumer attention are therefore integral components of a firm’s competitive toolbox. We study firms’ behavior in a perfect example for such a market: The music industry, in which consumers can choose from a plethora of albums and songs. We study a specific strategic instrument of firms, single releases, applying unique micro-level data. Arguing that the digitization of the industry via MP3, filesharing, and iTunes amounts to forced unbundling, the role of singles has changed from individual revenue generators (pre-digital era) to pure attention gatherers. In accordance with this driving hypothesis, we observe an inverse U-shaped relationship between competition intensity and the number of singles released in the digital era, while previously competition had a purely negative effect.

Abstract

In markets with thousands of products, firms cannot take it for granted that consumers are even aware of their articles’ existence. Advertising and actions to attract consumer attention are therefore integral components of a firm’s competitive toolbox. We study firms’ behavior in a perfect example for such a market: The music industry, in which consumers can choose from a plethora of albums and songs. We study a specific strategic instrument of firms, single releases, applying unique micro-level data. Arguing that the digitization of the industry via MP3, filesharing, and iTunes amounts to forced unbundling, the role of singles has changed from individual revenue generators (pre-digital era) to pure attention gatherers. In accordance with this driving hypothesis, we observe an inverse U-shaped relationship between competition intensity and the number of singles released in the digital era, while previously competition had a purely negative effect.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Language:English
Date:2015
Deposited On:23 Aug 2019 09:16
Last Modified:26 Jan 2022 22:17
Series Name:SSRN
Number of Pages:39
OA Status:Green
Free access at:Official URL. An embargo period may apply.
Publisher DOI:https://doi.org/10.2139/ssrn.2444708
Official URL:http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2444708
Other Identification Number:merlin-id:11513

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