Why would artists favor free streaming?

Ramadan Aly-Tovar (1) , Maya Bacache-Beauvallet (2, 3, 4) , Marc Bourreau (4, 3) , François Moreau (1)

1 CEPN - Centre d'Economie de l'Université Paris Nord
2 Télécom ParisTech
3 ECOGE - Economie Gestion
4 SES - Département Sciences Economiques et Sociales

While streaming services are becoming the dominant way to consume recorded music, professional musicians remain divided in their opinion toward streaming, especially toward free (ad-supported) services that generate very low royalties. This paper is one of the first attempts to analyze empirically the drivers of the artists’ opinion on free streaming. Using survey data from more than 1100 French professional musicians, we emphasize that beyond their individual preferences, four main determinants affect the opinion of artists on free streaming: (1) Free streaming stands as a discovery tool that helps consumers to explore the music catalogue beyond stars and already well-known artists; (2) free streaming generates a positive externality on the live music market; (3) the contractual situation of the artist also matters, since the biggest recording companies obtain much more favorable conditions in revenue sharing from streaming services; (4) the opinion of artists is also shaped by the consumption habits of their fans.

Domains: Economics and Finance

Ramadan Aly-Tovar, Maya Bacache-Beauvallet, Marc Bourreau, François Moreau. Why would artists favor free streaming?. Journal of Cultural Economics, 2020, 44, pp.255-280. ⟨10.1007/s10824-019-09358-z⟩. ⟨hal-02164712⟩