Increasing Returns to Information in the U.S. Popular Music Industry
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Citation: David E. Giles (2005/07) Increasing Returns to Information in the U.S. Popular Music Industry.
Download: http://web.uvic.ca/econ/research/papers/pdfs/ewp0510.pdf
Tagged: Economics (RSS) music industry (RSS), popularity (RSS), network effects (RSS)
Summary:
Examining data concerning ‘number one’ hits on the Billboard Hot 100 from 1955 to 2003, author finds evidence for increasing returns to information in the U.S. popular music industry: the longer a song has been #1, the longer it is likely to remain #1.
This finding is similar to those found in analyses of film and theatrical industries. The basic explanation is that "word of mouth recommendations can play an important role. The more people who have listened to, and purchased, a musical recording, the more information there is available to other potential agents."
Similar phenomena are referred to as "bandwagon and network effects, momentum, contagion, and informational cascades" and "success breeds success".
