NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Luis Aguiar

Digital Economy Unit
European Commission – Joint Research Center
Edificio EXPO - Calle Inca Garcilaso 3
41092 Sevilla (Spain)

E-Mail: luis.aguiar@ec.europa.eu

NBER Working Papers and Publications

September 2016Quality Predictability and the Welfare Benefits from New Products: Evidence from the Digitization of Recorded Music
with Joel Waldfogel: w22675
We explore the consequence of quality unpredictability for the welfare benefit of new products, using recent developments in recorded music as our context. Digitization has expanded consumption opportunities by giving consumers access to the “long tail” of existing products, rather than simply the popular products that a retailer might stock with limited shelf space. While this is clearly beneficial to consumers, the benefits are somewhat limited: given the substitutability among differentiated products, the incremental benefit of obscure products - even lots of them - can be small. But digitization has also reduced the cost of bringing new products to market, giving rise to a different sort of long tail, in production. If the appeal of new products is unpredictable at the time of investme...
October 2015Streaming Reaches Flood Stage: Does Spotify Stimulate or Depress Music Sales?
with Joel Waldfogel: w21653
Streaming music services have exploded in popularity in the past few years, variously raising optimism and concern about their impacts on recorded music revenue. On the one hand, streaming services allow sellers to engage in bundling with the promise of increasing revenues, profits, and consumer surplus. Successful bundling would indeed translate some of the interest in music not generating revenue through individual track sales - unpaid consumption and deadweight loss - into willingness to pay for the bundled offering. On the other hand, streaming may displace traditional individual track sales. Even if they displace sales, streams may however still raise overall revenue if the streaming payment is large enough in relation to the extent of sales displacement. We make use of the growth in ...

Published: Luis Aguiar & Joel Waldfogel, 2017. "As streaming reaches flood stage, does it stimulate or depress music sales?," International Journal of Industrial Organization, .

 
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