DP16006 Displacement and complementarity in the recorded music industry: evidence from France
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 variations in prices of
about 30 million sales and streams of over 300 thousand products observed weekly between
2014 and 2017 for the entire French market. At the track-level, we find that streaming
displaces digital sales. Similarly, at the album level, digital sales displace physical 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 Urban Music. Most of our findings are robust to whether we consider the hits or
include the products that belong to the long tail.
