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Promotional Effects of Recorded Music and Superstars on Concert Financial Outcomes

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  • Eric Hogue

Abstract

Using a comprehensive data set of hand-collected observations of top touring performing artists, I examine the complementary relationship between recorded music and concert financial outcomes. I find that music streaming derives substantive financial benefit to the top 100 touring artists as a means to promote their live performances. Using empirical estimates from a panel model with artist fixed effects, an artist can derive an incremental $46K to $49K per show when achieving a 20% increase in music streaming. Additionally, using a 2SLS model with artist fixed effects to account for potential endogenous promotional effects, I identify top performers (or ‘superstars’) who derive significant additional concert revenue because of their back catalogue of hit songs. These top performers earn an incremental $15K per show for every week they have a song from their catalogue in the Billboard Top 20. These findings indicate that artists can use their legacy to build lifelong earnings from their music and performances. JEL Classifications: D12, D22, L82, Z10

Suggested Citation

  • Eric Hogue, 2024. "Promotional Effects of Recorded Music and Superstars on Concert Financial Outcomes," Journal of Interdisciplinary Economics, , vol. 36(2), pages 166-203, July.
    • Handle: RePEc:sae:jinter:v:36:y:2024:i:2:p:166-203
    DOI: 10.1177/02601079231168750
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    References listed on IDEAS

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    1. Giles, David E., 2006. "Superstardom in the US popular music industry revisited," Economics Letters, Elsevier, vol. 92(1), pages 68-74, July.
    2. Chung, Kee H & Cox, Raymond A K, 1994. "A Stochastic Model of Superstardom: An Application of the Yule Distribution," The Review of Economics and Statistics, MIT Press, vol. 76(4), pages 771-775, November.
    3. Aguiar, Luis & Waldfogel, Joel, 2018. "As streaming reaches flood stage, does it stimulate or depress music sales?," International Journal of Industrial Organization, Elsevier, vol. 57(C), pages 278-307.
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    5. Hamlen, William A, Jr, 1991. "Superstardom in Popular Music: Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 729-733, November.
    6. MacDonald, Glenn M, 1988. "The Economics of Rising Stars," American Economic Review, American Economic Association, vol. 78(1), pages 155-166, March.
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    More about this item

    Keywords

    Music industry; music streaming; industry disruption; public performance;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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