Skip to main content

Live and prerecorded popular music consumption

Abstract

Changing consumption habits have rearranged the popular music market in the last decade, and a pattern in which live music attendance gets an increasing share of the market has emerged. This work analyzes the demand for the popular music sector considering its double dimension as supplier of live concerts and prerecorded music. We use the 2006/2007 wave of Spain’s Survey on Habits and Cultural Practices, and estimate a bivariate probit model for attendance to live concerts and the purchase of prerecorded music. Results allow us to describe the profile of the average and frequent consumer in both markets, which shows some similarities—gender effects and the role of cultural capital—but also striking differences—time restrictions and relation to economic activity, and the use of technology. Finally, we find evidence of demand complementarities, with a direct causal link from prerecorded music to live attendance that helps explain recent institutional changes.

This is a preview of subscription content, access via your institution.

Notes

  1. Data by the trade organization of the recording industry (IFPI) shows that between 2000 and 2005 sales of prerecorded music CDs in OECD countries experienced an average annual growth rate of −3.57%, see http://www.ifpi.org/content/section_statistics. While figures for live music revenue are more fragmented, using Black et al. (2007) data for the US we find that between 1997 and 2005 total revenue in the live sector has experienced an average annual growth of 11.5%. Finally, the most recent IFPI figures reveal that global performance rights revenues have shown a steady growth since 2003.

  2. A trend that was advanced by independent labels such as Subterfuge.com that in the early 2000s started offering management services to their acts.

  3. Such as Summercase, a twin festival taking place in Barcelona and Madrid, entering the market in 2006 with an aggressive strategy (scheduled to coincide with the biggest summer festival) and that after its third edition is indefinitely “on hold”; or Sonar which usually takes place at Barcelona but in the 2010 edition took place also at Santiago de Compostela.

  4. Data for live concerts from the main Spanish collecting society (SGAE, see its yearbook in http://www.artenetsgae.com/), and data for prerecorded music sales from the International Federation of the Phonographic Industry. Note that data on live revenue are available up to 2005.

  5. Elaborated by Ministerio de Cultura. Timing, sampling methodology and main results are available at http://www.mcu.es/estadisticas/MC/EHC/2006/Presentacion.html.

  6. Earl (2001) identifies eight components in the total cost of attending a concert. Quoting the author, these are: “transport-related costs; child-related costs; poor sound quality and excessive volume; difficulties in seeing the performers; disadvantages of social consumption; undesired supporting artists; limited editing opportunities [i.e., inability of editing out less attractive parts of the show]; monopolistic suppliers of food and drink.”

  7. After an interview in the New York Times in which, among other things, the artist reflects about the Internet and the changes it has brought to the music industry. At one point, he states “[...]You’d better be prepared for doing a lot of touring because that’s really the only unique situation that’s going to be left.” See Pareles (2002).

  8. As noted in a referee report, it is debatable whether actual choices are based on a maximization process. Nevertheless, rational choice is not a necessary condition and alternative decision rules may fit this setup. For instance, we can model consumer choice based on satisfying choices by defining u 0 i as a minimum utility level to enter one of the markets.

  9. The survey uses a two-stage sampling method with stratified primary sampling units. We use sample weights in the empirical work.

  10. From a quantitative standpoint, the survey design and data collection procedure offers the researcher a view of cultural consumption for the population over 15 in Spain. However, the good quality and breadth of the data comes at a cost. As one referee noted, designing the survey questionnaire would have allowed us for more specific questions about music consumption. Nevertheless to obtain a representative sample of the Spanish cultural consumer in this case would have been prohibitive.

  11. It would not have been accurate to estimate an expression for infrequent consumers. Note that in our setup, infrequent consumption is the opposite of both frequent and no consumption at all. Hence, the meaning of the zeroes in expressions (3)–(4) would not be univocal, leading to inconsistent estimates.

  12. At least one can say that popular music consumers are younger in age, as the raw comparison of the mean age for the average participant and non-participant in both markets shows: roughly 34 years compared to 51 in the live market, and 35–52 in the prerecorded one. Interestingly, the 2002 wave of the survey shows that the mean age was 30 compared to 47.4 for live attendance, and 33 compared to 48.6 for prerecorded purchases. As one referee notes, one ought to recognize that the success of nostalgia-based tours by established acts responds to the aging of the consumer of popular music.

  13. As one referee noted the rise of YouTube may affect the demand for music, both prerecorded and live, in the same way as file sharing does. The potential emergence of substitution and exposition effects leads to an ambiguous net effect on music demand.

  14. At this point, it is important to note that prerecorded music includes both physical media and digital downloads to computers or mobile phones.

  15. Results are not included for the sake of economy. However they are available on demand.

  16. Available data published by the Spanish Phonographic Association show that over the last decade sale cuts by value exceed those by amount.

References

  • Ateca-Amestoy, V. (2008). Determining heterogeneous behavior for theater attendance. Journal of Cultural Economics, 32(2), 127–151.

    Article  Google Scholar 

  • Black, G., Fox, M., & Kochanowski, P. (2007). Concert tour success in North America: An examination of the top 100 tours from 1997 to 2005. Popular Music and Society, 30(2), 149–172.

    Article  Google Scholar 

  • Bruni, L., & Stanca L. (2008). Watching alone: Relational goods, television and happiness. Journal of Economic Behavior and Organization, 65(3–4), 506–528.

    Article  Google Scholar 

  • DiMaggio, P. (1990). “A highbrow/lowbrow”: The emergence of cultural hierarchy in America. The Sociological Review, 38(3), 608–612.

    Google Scholar 

  • DiMaggio, P., & Ostrower, F. (1990). Participation in the arts by black and white americans. Social Forces, 68(3), 753–778.

    Article  Google Scholar 

  • Earl, P. E. (2001). Simon’s travel theorem and the demand for live music. Journal of Economic Psychology, 22(3), 335–358.

    Article  Google Scholar 

  • Favaro, D., & Frateschi, C. (2007). A discrete choice model of consumption of cultural goods: The case of music. Journal of Cultural Economics, 31(3), 205–234.

    Article  Google Scholar 

  • Fisher, T. C. G., & Preece, S. B. (2003). Evolution, extinction, or status quo? Canadian performing arts audiences in the 1990s. Poetics, 31,69–86.

    Google Scholar 

  • Greene, W. H. (2007). Econometric analysis. New Jersey: Prentice-Hall International.

    Google Scholar 

  • Krueger, A. B. (2005). The economics of real superstars: The market for rock concerts in the material world. Journal of Labor Economics, 23(1), 1–30.

    Article  Google Scholar 

  • Levy-Garboua, L., & Montmarquette, C. (1996). A microeconomic study of theatre demand. Journal of Cultural Economics, 20(1), 25–50.

    Article  Google Scholar 

  • Maddala, G. S. (1983). Limited-dependent and qualitative variables in econometrics. Cambridge: Cambridge University Press.

    Google Scholar 

  • Minor, M., Wagner, T., Brewerton, F., & Hausman, A. (2004). Rock on! an elementary model of customer satisfaction with musical performances. Journal of Services Marketing, 18(1), 7–18.

    Article  Google Scholar 

  • Montoro-Pons, J. D., & Cuadrado, M. (2008). Legal origin and intellectual property rights: An empirical study in the prerecorded music sector. European Journal of Law and Economics, 26(2), 153–173.

    Article  Google Scholar 

  • Oberholzer, F., & Strumpf, K. (2007). The effect of file sharing on record sales: An empirical analysis. Journal of Political Economy, 115(1), 1–42.

    Article  Google Scholar 

  • O’Hagan, J. W. (1996). Access to and participation in the arts: The case of those with low incomes/educational attainment. Journal of Cultural Economics, 20(4), 269–282.

    Google Scholar 

  • Pareles, J. (2002). David Bowie, 21st-century entrepreneur. New York Times.

  • Peterson, R. A. (1997). The rise and fall of highbrow snobbery as a status marker. Poetics, 25(2–3), 75–92.

    Article  Google Scholar 

  • Peterson, R. A. (2005). Problems in comparative research: The example of omnivorousness. Poetics, 33, 257–282.

    Article  Google Scholar 

  • Peterson, R. A., & Kern R. M. (1996). Changing highbrow taste: From snob to omnivore. American Sociological Review, 61(5), 900–907.

    Article  Google Scholar 

  • Prieto-Rodriguez, J., & Fernandez-Blanco, V. (2000). Are popular and classical music listeners the same people? Journal of Cultural Economics, 24(2), 147–164.

    Article  Google Scholar 

  • Seaman, B. A. (2006). Empirical studies for demand in the performing arts. North Holland: Handbook of the Economics of Art and Culture.

    Google Scholar 

  • The Economist. (2007, July 5). A change of tune. Print edition.

  • The Economist. (2010, January 8). A union of pariahs. The ticketmaster-live nation merger. Print edition.

  • Towse, R. (1992). The earnings of singers: An economic analysis. Cultural Economics. Springer: Heidelberg

    Google Scholar 

  • Throsby, D. (1994). The production and consumption of the arts: A view of cultural economics. Journal of Economic Literature, 32(1), 1–29.

    Google Scholar 

  • van Eijck, K. (2001). Social differentiation in musical taste patterns. Social Forces, 79(3), 1163–1185.

    Article  Google Scholar 

  • Zentner, A. (2006). Measuring the effect of file sharing on music purchases. Journal of Law and Economics, 49(1), 63–90.

    Article  Google Scholar 

Download references

Acknowledgments

The authors would like to thank two anonymous referees for their helpful comments. We also would like to thank Victor Fernández, Ana María Bedate and other participants at the I Workshop in Cultural Economics and Management held 25 November 2009 at Universidad de Sevilla.

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Juan D. Montoro-Pons.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Montoro-Pons, J.D., Cuadrado-García, M. Live and prerecorded popular music consumption. J Cult Econ 35, 19–48 (2011). https://doi.org/10.1007/s10824-010-9130-2

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10824-010-9130-2

Keywords

  • Live and prerecorded popular music
  • Participation
  • Audiences
  • Cultural demand
  • Cultural capital
  • Bivariate probit model

JEL Classification

  • D12
  • C25
  • Z10
  • Z11