The Rise of Streaming Music and Implications for Music Production

摘要

In this paper, we model the potential for streaming music, a nondurablernproduct, to upend and displace durable music sales. As the popularity ofrnstreaming music increases producers will adjust their production to focus on thernnon-durable channel. We identify conditions under which the changes in musicrndelivery will encourage musicians to release fewer songs, but at a higher quality,rnleading to market deepening and increased engagement. This change will completernthe unbundling process in music production making the traditional bundledrnalbum of little importance. This tendency toward unbundling for individual musiciansrndepends on a robust bundle from a delivery platform to provide value forrnconsumer subscriptions. Beyond a model of consumer utility and producer profit,rnwe analyze the most played songs of the large streaming music platform, Spotify,rnand compare those results to traditional album sales using Nielsen data.