TY  - JOUR
AU  - Hendricks,Ken
AU  - Sorensen,Alan
TI  - Information Spillovers in the Market for Recorded Music
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12263
PY  - 2006
Y2  - May 2006
UR  - http://www.nber.org/papers/w12263
L1  - http://www.nber.org/papers/w12263.pdf
N1  - Author contact info:
Ken Hendricks
The University of Texas at Austin
Department of Economics
Bernard and Audre Rapoport Bld.
BRB 1.116
Austin, TX 78712
E-Mail: hendrick@eco.utexas.edu

Alan T. Sorensen
Department of Economics
University of Wisconsin, Madison
6454 W.H. Sewell Social Science Bldg
1180 Observatory Drive
Madison, WI 53706
Tel: 608/263-3867
E-Mail: sorensen@ssc.wisc.edu
M2  - featured in NBER digest on 2006-05-29
AB  - This paper studies the role of consumer learning in the demand for recorded music by examining the impact of an artist%u2019s new album on sales of past and future albums. Using detailed album sales data for a sample of 355 artists, we show that the release of a new album increases sales of old albums, and the increase is substantial and permanent%u2014especially if the new release is a hit. Various patterns in the data suggest the source of the spillover is information: a new release causes some uninformed consumers to learn about their preferences for the artist%u2019s past albums. These information spillovers suggest that the high concentration of success across artists may partly result from a lack of information, and they have significant implications for investment and the structure of contracts between artists and record labels.
ER  -