Discussion Paper Details

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Title: Video Killed the Radio Star? Online Music Videos and Recorded Music Sales

Author(s): Tobias Kretschmer and Christian Peukert

Publication Date: October 2019

Keyword(s): Digital Distribution Platforms, Natural Experiment and User-generated content

Programme Area(s): Industrial Organization

Abstract: We study the heterogeneous effects of online video platforms on the sales volume and sales distribution of recorded music. Identification comes from two natural experiments in Germany. In 2009, virtually all music videos were blocked from YouTube due to a legal dispute. In 2013, the dedicated platform VEVO entered the market, making videos of a large number of artists available overnight. Our estimates suggest that restricting (enabling) access to online videos decreases (increases) recorded music sales on average by about 5-10%. We show that the effect operates independently of the nature of video content, suggesting that user-generated content is as effective as official content. Moreover, we highlight heterogeneity in this effect: Online music video disproportionally benefits sales of new artists and sales of mainstream music.

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Bibliographic Reference

Kretschmer, T and Peukert, C. 2019. 'Video Killed the Radio Star? Online Music Videos and Recorded Music Sales'. London, Centre for Economic Policy Research.