Abstract
From a representative survey of 2,000 individuals, we study whether consumption of music through streaming services, like Spotify or YouTube, is a substitute or a complement to physical music consumption modes, such as CDs and live music. Controlling for the taste for music, various socio-demographic characteristics and the usual determinants of music consumption either offline (radio, TV, friends/relatives) or online (online recommendations, social networks), our results show that free music streaming (where the consumer does not possess the music but only has access to it) has no significant effect on CD sales and affects positively live music attendance, but only for national or international artists who are more likely to be available on streaming services.
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Notes
http://www.musicweek.com/news/read/sweden-record-sales-rise-again-in-2012/053223 [accessed April 5, 2013].
For an empirical approach, see Tu and Lu (2006).
Studies by Oberholzer-Gee and Strumpf (2007), Andersen and Frenz (2010) and Hammond (2012) are the only ones to conclude that piracy has no impact on music sales. However, their conclusions have been called into question by Liebowitz (2010), Barker and Maloney (2012) and Smith and Telang (2012), respectively.
Note that most of these studies relate to a period before the rise of the online market. Waldfogel (2010) is an exception. From a survey of university students, he shows that in the iTunes era—at the time of the survey, digital sales accounted for about a third of US music sales—each additional song illegally obtained reduces paid consumption by between a third and a sixth of a song. This result is close to the results obtained by the previous studies. He also found that consumers value the songs they have illegally obtained less than the songs they have purchased. Waldfogel concludes that “much of the music people consume without paying would otherwise not have been purchased”.
Montoro-Pons and Cuadrado-Garcia (2011) empirically confirm the existence of a positive externality from recorded music consumption to concert attendance.
Quotas have been determined based on the age, the socio-professional category, the gender and the size of the urbain area.
The six sources used are national newspapers, local newspapers, Google news or Yahoo news, Websites of TV channels, blogs and pure players of news on the Internet. For each source, five answers are considered: every day, at least once a week, at least once a month, rarely, never.
The use of an alternative instrument would have improved the robustness of our results; unfortunately, no additional variable in the survey supports both the inclusion and the exclusion conditions.
The GHK algorithm is a simulated likelihood method.
To ensure that the composition of our sample (1,008 Internet users representative of France and 999 representative of Brittany) has no impact on the results of the empirical analysis, we re-estimate the models in Table 4 while only considering the 1,008 Internet users representative of the French population. No qualitative change occurs in this case. Data are available from the authors upon request.
Results of a representative survey of the whole French population on the online consumption of cultural goods (Hadopi 2011).
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Acknowledgments
We thank two anonymous reviewers as well as the participants at the 2012 ACEI Conference and the 10th ZEW Conference on the Economics of Information and Communication Technologies for their comments and suggestions.
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Nguyen, G.D., Dejean, S. & Moreau, F. On the complementarity between online and offline music consumption: the case of free streaming. J Cult Econ 38, 315–330 (2014). https://doi.org/10.1007/s10824-013-9208-8
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DOI: https://doi.org/10.1007/s10824-013-9208-8