Displacement and Complementary in the recorded music industry: evidence from France

Abstract

Do new digital consumption channels of music depress sales in old physical ones, or are they complementary? To answer this question, we exploit product-level variation in sales and prices of over 4 million products, observed weekly between 2014 and 2017 for the entire French market. A unique feature of our data is that we observe sales for both physical and digital products, as well as streaming consumption. At the track-level, we find that streaming displaces digital sales. At the more aggregate artist-level, digital sales displace physical sales, but streaming implies a promotional effect on physical sales. This complementarity is driven by popular genres, i.e., Pop and Variety. Most of our findings are robust to whether we consider the hits or include the products that belong to the long tail. Our findings bridge two streams of literature as we show that displacement between consumption channels at the product level can coexist with complementarity at a more aggregate level.

Keywords

Replaces

Marc Ivaldi, Ambre Nicolle, Frank Verboven, and Jiekai Zhang, “Displacement and Complementary in the recorded music industry: evidence from France”, TSE Working Paper, n. 21-1199, March 2021, revised January 7, 2023.

Reference

Marc Ivaldi, Ambre Nicolle, Frank Verboven, and Jiekai Zhang, “Displacement and Complementary in the recorded music industry: evidence from France”, Journal of Cultural Economics, January 2023.