Academic Papers 9 (Royal Salon C)
Kristél Pfeil Kemmerer,
Sequential Album Releases: Are Artists/Labels Acting Optimally?
Professor of Economics & Music Business
Professor of Economics
Tennessee State University
Professor of Music Business
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.