IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2405.14999.html

Some searches may not work properly. We apologize for the inconvenience.

   My bibliography  Save this paper

The Impact of Social Media on Music Demand: Evidence from a Quasi-Natural Experiment

Author

Listed:
  • Daniel Winkler
  • Christian Hotz-Behofsits
  • Nils Wlomert
  • Dominik Papies
  • Jura Liaukonyte

Abstract

The digital age has significantly changed how music is consumed, promoted, and monetized. Social media platforms like TikTok are playing a pivotal role in this transformation. This shift has sparked a debate within the music industry: While some stakeholders see social media platforms like TikTok as opportunities to boost songs to viral status, others raise concerns about potential cannibalization effects, fearing that such exposure might reduce revenue from streaming services like Spotify. In this paper, we evaluate the effect of a song's presence - or absence - on social media on its demand on music streaming services using a quasi-natural experiment: Universal Music Group's (UMG) - one of "The Big 3" record labels - decision to remove its entire content library from TikTok in February 2024. We use representative samples covering close to 50% of the US and 94% of the German streaming markets, employing a difference-in-differences approach to compare the streaming consumption of songs that were removed from TikTok with those that were not. We find that UMG's removal of music from TikTok led to a 2-3% increase in streams on audio platforms for affected songs, indicating substitution effects. However, this average treatment effect masks significant heterogeneity: older songs and songs with less promotional support elsewhere saw a decrease in streaming consumption, suggesting that TikTok helps consumers discover or rediscover content that is not top of mind for consumers.

Suggested Citation

  • Daniel Winkler & Christian Hotz-Behofsits & Nils Wlomert & Dominik Papies & Jura Liaukonyte, 2024. "The Impact of Social Media on Music Demand: Evidence from a Quasi-Natural Experiment," Papers 2405.14999, arXiv.org.
    • Handle: RePEc:arx:papers:2405.14999
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2405.14999
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Brambor, Thomas & Clark, William Roberts & Golder, Matt, 2006. "Understanding Interaction Models: Improving Empirical Analyses," Political Analysis, Cambridge University Press, vol. 14(1), pages 63-82, January.
    2. Tobias Kretschmer & Christian Peukert, 2020. "Video Killed the Radio Star? Online Music Videos and Recorded Music Sales," Information Systems Research, INFORMS, vol. 31(3), pages 776-800, September.
    3. Luis Aguiar & Joel Waldfogel, 2021. "Platforms, Power, and Promotion: Evidence from Spotify Playlists," Journal of Industrial Economics, Wiley Blackwell, vol. 69(3), pages 653-691, September.
    Full references (including those not matched with items on IDEAS)

    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. Nils Wlömert & Dominik Papies & Michel Clement & Martin Spann, 2024. "Frontiers: The Interplay of User-Generated Content, Content Industry Revenues, and Platform Regulation: Quasi-Experimental Evidence from YouTube," Marketing Science, INFORMS, vol. 43(1), pages 1-12, January.
    2. Johannes Loh, 2022. "Selection, Consumption, and New Music Exploration in an Online Social Network: A Dyadic Approach," CESifo Working Paper Series 10120, CESifo.
    3. Andrew Boutton, 2019. "Of terrorism and revenue: Why foreign aid exacerbates terrorism in personalist regimes," Conflict Management and Peace Science, Peace Science Society (International), vol. 36(4), pages 359-384, July.
    4. Tiziana La Rocca & Maurizio La Rocca & Francesco Fasano & Alfio Cariola, 2023. "Does a country's environmental policy affect the value of small and medium sized enterprises liquidity in the energy sector?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(1), pages 277-290, January.
    5. Simplice Asongu & Nicholas M. Odhiambo, 2020. "Financial access, governance and insurance sector development in sub-Saharan Africa," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 47(4), pages 849-875, February.
    6. Andrea Sáenz de Viteri Vázquez & Christian Bjørnskov, 2020. "Constitutional power concentration and corruption: evidence from Latin America and the Caribbean," Constitutional Political Economy, Springer, vol. 31(4), pages 509-536, December.
    7. Simplice A. Asongu & Nicholas M. Odhiambo, 2019. "Governance, capital flight and industrialisation in Africa," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 8(1), pages 1-22, December.
    8. Daniel Ofori-Sasu & Maame Ofewah Sarpong & Vivian Tetteh & Baah Aye Kusi, 2022. "Banking disclosure and banking crises in Africa: does board gender diversity play a role?," Palgrave Communications, Palgrave Macmillan, vol. 9(1), pages 1-10, December.
    9. Ehigiamusoe, Kizito Uyi & Lean, Hooi Hooi & Smyth, Russell, 2020. "The moderating role of energy consumption in the carbon emissions-income nexus in middle-income countries," Applied Energy, Elsevier, vol. 261(C).
    10. Simplice A. Asongu & Uchenna R. Efobi & Ibukun Beecroft, 2021. "Aid in Modulating the Impact of Terrorism on FDI: No Positive Thresholds, No Policy," Forum for Social Economics, Taylor & Francis Journals, vol. 50(4), pages 432-456, October.
    11. Falavigna, Greta & Ippoliti, Roberto, 2023. "SMEs’ behavior under financial constraints: An empirical investigation on the legal environment and the substitution effect with tax arrears," The North American Journal of Economics and Finance, Elsevier, vol. 66(C).
    12. Bilin Neyapti, 2018. "Income distribution and economic crises," International Finance, Wiley Blackwell, vol. 21(3), pages 273-296, December.
    13. Asongu, Simplice A., 2017. "Assessing marginal, threshold, and net effects of financial globalisation on financial development in Africa," Journal of Multinational Financial Management, Elsevier, vol. 40(C), pages 103-114.
    14. repec:use:tkiwps:1818 is not listed on IDEAS
    15. Edoardo Bressanelli & Christel Koop & Christine Reh, 2016. "The impact of informalisation: Early agreements and voting cohesion in the European Parliament," European Union Politics, , vol. 17(1), pages 91-113, March.
    16. André de Abreu Saraiva Monteiro Alves & Fernando Manuel Pereira de Oliveira Carvalho, 2022. "How Dynamic Managerial Capabilities, Entrepreneurial Orientation, and Operational Capabilities Impact Microenterprises’ Global Performance," Sustainability, MDPI, vol. 15(1), pages 1-23, December.
    17. Rana, Arslan Tariq & Kebewar, Mazen, 2014. "The Political Economy of FDI flows into Developing Countries: Does the depth of International Trade Agreements Matter?," EconStor Preprints 91501, ZBW - Leibniz Information Centre for Economics.
    18. Simplice A. Asongu & Nicholas M. Odhiambo, 2018. "Information asymmetry, financialization, and financial access," International Finance, Wiley Blackwell, vol. 21(3), pages 297-315, December.
    19. Simplice A. Asongu & Jacinta C. Nwachukwu, 2018. "Increasing Foreign Aid for Inclusive Human Development in Africa," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 138(2), pages 443-466, July.
    20. Sirén, Charlotta & Kohtamäki, Marko, 2016. "Stretching strategic learning to the limit: The interaction between strategic planning and learning," Journal of Business Research, Elsevier, vol. 69(2), pages 653-663.
    21. Simplice Asongu & Ndemaze Asongu, 2018. "The comparative exploration of mobile money services in inclusive development," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 45(1), pages 124-139, January.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:arx:papers:2405.14999. 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: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    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.