The Evolution of the Music Industry in the Post-Internet Era

• Main Author: El Gamal, Ashraf
• Format: Others
• Published: Scholarship @ Claremont 2012
• Subjects: music industry; file sharing; concert industry; live music; internet; Econometrics; Industrial Organization; Other Economics
• Online Access: http://scholarship.claremont.edu/cmc_theses/532; http://scholarship.claremont.edu/cgi/viewcontent.cgi?article=1501&context=cmc_theses

The rise in the prevalence of the Internet has had a wide range of implications in nearly every industry. Within the music business, the turn of the millennium came with a unique, and difficult, set of challenges. While the majority of academic literature in the area focuses specifically on the aspect of file sharing within the Internet as it negatively impacts sales within the recording sector, this study aims to assess the Internet’s wider impacts on the broader music industry. In the same time that record sales have plummeted, the live music sector has thrived, potentially presenting alternative business models and opportunities. This paper will discuss a variety of recent Internet-related developments including the rise of legal digital distribution, key economic implications, general welfare effects, changes in consumer preference and social phenomena as they relate to both the recording and live entertainment sectors. I employ a time series multiple regression model to evaluate the statistical significance of the relationship between the Internet’s rise and the value of record sales. For the concert industry, I will examine recent trends and descriptive data as they relate to the Internet’s prevalence.