Free Music Streaming Boosts Megastar Concerts Without Stealing CD Sales

In their article, "On the complementarity between online and offline music consumption: the case of free streaming," Godefroy Dang Nguyen and Sylvain Dejean of Telecom Bretagne, and François Moreau, a professor at the Université de Paris, investigate free music streaming services' effect on music consumption overall. Through a survey of 2,000 French Internet users – roughly half from Brittany – they determine that streaming services such as Spotify or YouTube boost attendance at concerts without negatively affecting physical CD sales.

Specifically, those who stream music online are more likely to attend concerts by the national and international artists who tend to be featured on these streaming services. In this way, the authors write that streaming services seem less like a substitute for music ownership and more like a tool for discovering music.

Because they allow record labels to serve as curators, actively promoting and managing their artists, streaming services influence the discovery process in ways that are impossible with unregulated, illegal file-sharing. Labels promote the most "bankable" artists via streaming sites – potentially leading to the neglect of more niche artists, especially classical music and local artists.

Surprisingly, the survey found those music consumers who live in less densely populated areas are more likely to buy physical CDs. The authors suggest that might be because access to live music is more prevalent in urban areas, music access in rural areas is dependent on the consumption of physical music.

The survey didn't take into account paid streaming services or pay-per-download services, such as iTunes, which were relatively small compared to free streaming and physical CD sales at the time of the survey but have since grown in their impact. Even so, this paper suggests that streaming functions as a promotional tool, and "reinforces rather than harms" the music industry.

Nguyen, Godefroy Dang, Sylvain Dejean, and François Moreau. 2013. "On the complementarity between online and offline music consumption: the case of free streaming." Journal of Cultural Economics. doi: 10.1007/s10824-013-9208-8

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