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Saturday 11:30-12:30
Academic Papers 9 (Royal Salon C)
Kristél Pfeil Kemmerer, Moderator

Patterns in Sequential Album Releases: Are Artists/Labels Acting Optimally?

Jennifer Fowler
Assistant Professor of Economics & Music Business
Belmont University

Stuart J. Fowler
Associate Professor of Economics
Middle Tennessee State University

Rush Hicks
Assistant Professor of Music Business
Belmont University

    Using SoundScan data for the periods 1992-2003, we create a panel data set comprised of “Heatseeker” artists for the purpose of studying empirical patterns of subsequent album releases. For our panel of artists, we document the following empirical facts. First, the time between album releases is a function of past album sales; all else equal, the larger the hit the less time it takes for the next album to be released. Second, backward spillover effects - new album releases affect past album sales - are more likely to occur when subsequent albums have delayed releases. Given these empirical facts, we develop a simple theory of artist behavior. In our model, artists optimally weigh the costs and benefits of release. The benefits include sales on the release and spillovers on past albums. Delaying a release foregoes these benefits for the opportunity of a better future release. The model predicts artists with mild hits delay release for the opportunity of sales and spillovers. Big hit artists release quickly and have smaller spillover effects.

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