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Life cycle effects of technology on revenue in the music recording industry 1973–2017

Authors
  • Pitt, Ivan L.1
  • 1 Independent Senior Economist and Data Scientist, New York, NY, USA , New York (United States)
Type
Published Article
Journal
SN Business & Economics
Publisher
Springer International Publishing
Publication Date
Nov 02, 2020
Volume
1
Issue
1
Identifiers
DOI: 10.1007/s43546-020-00004-x
Source
Springer Nature
Keywords
License
Yellow

Abstract

Revenue in the recording music industry is driven by exogenous technology inputs and revisions to the Copyright Act. Each new technology and regulatory change had a financial impact that altered the life cycle patterns in the industry, that in turn led to innovative marketing applications that transformed the production, sale, and distribution of music. The premise that technological change follows exactly the theoretical S-curve in all cases may be misleading and this paper provides an alternative measure. We analyze the life cycle effects of technology on revenue in the music industry using an unbalanced panel instead of a logistic growth model when life cycle curves may be ‘irregular’ and the mathematical approximation is often difficult. When the error terms are corrected for heteroscedasticity and serial correlation, the model measures the increased marginal effects of digital technologies (physical, downloads, digital subscriptions, streaming, and synchronization) on music industry revenue for the years 1973–2017. This paper adds to the growing literature of advanced econometric modeling, machine learning, and artificial intelligence analysis in the music and creative industries.

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