IDEAS home Printed from https://ideas.repec.org/a/kap/jculte/v42y2018i2d10.1007_s10824-017-9304-2.html
   My bibliography  Save this article

“Let’s make lots of money”: the determinants of performance in the recorded music sector

Author

Listed:
  • Juan D. Montoro-Pons

    (Universitat de València)

  • Manuel Cuadrado-García

    (Universitat de València)

Abstract

This research analyzes the performance of 467 record labels in eight European countries over a period of 13 years (2003–2015). The main goal is to explain a relative measure of profitability in terms of observed variables, although the nature of the dataset also allows us to include non-observed firm and country effects. To this end alternative models are estimated and three main research questions are tested, namely: (1) the effect of the dual structure of the recorded music market, in which a competitive segment and an oligopoly coexist; (2) the extent and source of the volatility of profits in record labels; and (3) the nonlinear impact of size on performance.

Suggested Citation

  • Juan D. Montoro-Pons & Manuel Cuadrado-García, 2018. "“Let’s make lots of money”: the determinants of performance in the recorded music sector," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 42(2), pages 287-307, May.
    • Handle: RePEc:kap:jculte:v:42:y:2018:i:2:d:10.1007_s10824-017-9304-2
    DOI: 10.1007/s10824-017-9304-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10824-017-9304-2
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10824-017-9304-2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Anita M. McGahan & Michael E. Porter, 1999. "The Persistence of Shocks to Profitability," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 143-153, February.
    2. Marc Bourreau & Michel Gensollen & François Moreau, 2012. "The Impact of a Radical Innovation on Business Models: Incremental Adjustments or Big Bang?," Industry and Innovation, Taylor & Francis Journals, vol. 19(5), pages 415-435, July.
    3. Andrew Burke, 1996. "The dynamics of product differentiation in the British record industry," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 20(2), pages 145-164, June.
    4. Jonathan Gander & Alison Rieple, 2004. "How Relevant is Transaction Cost Economics to Inter-Firm Relationships in the Music Industry?," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 28(1), pages 57-79, February.
    5. Samuel Cameron, 2016. "Past, present and future: music economics at the crossroads," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 40(1), pages 1-12, February.
    6. Marc Bourreau & Michel Gensollen & François Moreau & Patrick Waelbroeck, 2013. "“Selling less of more?” The impact of digitization on record companies," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 37(3), pages 327-346, August.
    7. Juan Carlos Bou & Albert Satorra, 2007. "The persistence of abnormal returns at industry and firm levels: Evidence from Spain," Strategic Management Journal, Wiley Blackwell, vol. 28(7), pages 707-722, July.
    8. Dominic Power & Daniel Hallencreutz, 2002. "Profiting from Creativity? The Music Industry in Stockholm, Sweden and Kingston, Jamaica," Environment and Planning A, , vol. 34(10), pages 1833-1854, October.
    9. Goddard, John & Tavakoli, Manouche & Wilson, John O.S., 2009. "Sources of variation in firm profitability and growth," Journal of Business Research, Elsevier, vol. 62(4), pages 495-508, April.
    10. Andrea Ordanini, 2006. "Selection models in the music industry: How a prior independent experience may affect chart success," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 30(3), pages 183-200, December.
    11. Marc Bourreau & Michel Gensollen & François Moreau, 2012. "The Impact of a Radical Innovation on Business Models: Incremental Adjustments or Big Bang?," Industry and Innovation, Taylor & Francis Journals, vol. 19(5), pages 415-435, July.
    12. A J Scott, 1999. "The US Recorded Music Industry: On the Relations between Organization, Location, and Creativity in the Cultural Economy," Environment and Planning A, , vol. 31(11), pages 1965-1984, November.
    13. Ken Hendricks & Alan Sorensen, 2009. "Information and the Skewness of Music Sales," Journal of Political Economy, University of Chicago Press, vol. 117(2), pages 324-369, April.
    14. John Goddard & Manouche Tavakoli & John Wilson, 2005. "Determinants of profitability in European manufacturing and services: evidence from a dynamic panel model," Applied Financial Economics, Taylor & Francis Journals, vol. 15(18), pages 1269-1282.
    15. repec:bla:jindec:v:47:y:1999:i:4:p:373-98 is not listed on IDEAS
    16. repec:hal:journl:hal-02265309 is not listed on IDEAS
    17. Peter Tschmuck, 2012. "Creativity and Innovation in the Music Industry," Springer Books, Springer, edition 2, number 978-3-642-28430-4, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Amy Whitaker, 2021. "Economies of scope in artists’ incubator projects," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 45(4), pages 613-631, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Samuel Cameron, 2016. "Past, present and future: music economics at the crossroads," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 40(1), pages 1-12, February.
    2. Carlo MIGLIARDO & Daniele SCHILIRÒ, 2016. "Mid Sized Italian Manufacturing Firms A Panel Data Analysis on Profitability," Journal of Advanced Studies in Finance, ASERS Publishing, vol. 7(2), pages 129-145.
    3. Stefan Hirsch & Jan Schiefer, 2016. "What Causes Firm Profitability Variation in the EU Food Industry? A Redux of Classical Approaches of Variance Decomposition," Agribusiness, John Wiley & Sons, Ltd., vol. 32(1), pages 79-92, January.
    4. Jan Schiefer & Stefan Hirsch & Monika Hartmann & Adelina Gschwandtner, 2013. "Industry, firm, year and country effects on profitability in EU food processing," Studies in Economics 1309, School of Economics, University of Kent.
    5. Stefan Hirsch, 2018. "Successful In The Long Run: A Meta†Regression Analysis Of Persistent Firm Profits," Journal of Economic Surveys, Wiley Blackwell, vol. 32(1), pages 23-49, February.
    6. Vicente López-López & Susana Iglesias-Antelo & Esteban Fernández, 2020. "Is Sustainable Performance Explained by Firm Effect in Small Business?," Sustainability, MDPI, vol. 12(23), pages 1-13, December.
    7. Stefan Hirsch & Adelina Gschwandtner, 2013. "Profit persistence in the food industry: evidence from five European countries," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 40(5), pages 741-759, December.
    8. Saara Tamminen, 2017. "Regional effects or none? Firms' profitability during the Great Recession in Finland," Papers in Regional Science, Wiley Blackwell, vol. 96(1), pages 33-59, March.
    9. Marc Bourreau & Michel Gensollen & François Moreau & Patrick Waelbroeck, 2013. "“Selling less of more?” The impact of digitization on record companies," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 37(3), pages 327-346, August.
    10. Ancillai, Chiara & Sabatini, Andrea & Gatti, Marco & Perna, Andrea, 2023. "Digital technology and business model innovation: A systematic literature review and future research agenda," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    11. Michaela Sprenger & Tobias Mettler & Robert Winter, 0. "A viability theory for digital businesses: Exploring the evolutionary changes of revenue mechanisms to support managerial decisions," Information Systems Frontiers, Springer, vol. 0, pages 1-24.
    12. Peter Maskell & Mark Lorenzen, 2004. "The Cluster as Market Organisation," Urban Studies, Urban Studies Journal Limited, vol. 41(5-6), pages 991-1009, May.
    13. Fabio R. Chaddad & Mario P. Mondelli, 2013. "Sources of Firm Performance Differences in the US Food Economy," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(2), pages 382-404, June.
    14. Cheng-Yi Lin, 2014. "The Evolution of Taipei’s Music Industry: Cluster and Network Dynamics in the Innovation Practices of the Music Industry," Urban Studies, Urban Studies Journal Limited, vol. 51(2), pages 335-354, February.
    15. Gamble, Jordan Robert & Brennan, Michael & McAdam, Rodney, 2017. "A rewarding experience? Exploring how crowdfunding is affecting music industry business models," Journal of Business Research, Elsevier, vol. 70(C), pages 25-36.
    16. Matthias Fabian Gregersen Trischler & Jason Li-Ying, 2023. "Digital business model innovation: toward construct clarity and future research directions," Review of Managerial Science, Springer, vol. 17(1), pages 3-32, January.
    17. François Rycx & Yves Saks & Ilan Tojerow, 2015. "Does Education Raise Productivity and Wages Equally? The Moderating Roles of Age, Gender and Industry," Working Paper Research 281, National Bank of Belgium.
    18. Ruyun (Ivy) Feng & Michael D. Kimbrough & Sijing Wei, 2022. "The role of information transparency in the product market: an examination of the sustainability of profitability differences," Review of Accounting Studies, Springer, vol. 27(2), pages 668-705, June.
    19. Andrew Weinbach & Phillip Kamau Njoroge & Robert Salvino & Arch Woodside, 2024. "Strategic behavior, artistic integrity, and tradeoffs in popular music," Contemporary Economic Policy, Western Economic Association International, vol. 42(3), pages 483-497, July.
    20. Hsu, Bo-Xiang & Chen, Yi-Min & Yan, Ting-Yu, 2021. "Industrial targeting and firm performance: An integrated approach to industry selection," Technological Forecasting and Social Change, Elsevier, vol. 162(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jculte:v:42:y:2018:i:2:d:10.1007_s10824-017-9304-2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.