The Song Remains the Same? Technological Change and Positioning in the Recorded Music Industry

Technological change in the recorded music industry has spurred changes—file sharing, unbundling singles from albums, and streaming—that have eroded firms’ abilities to generate revenues. Other technological changes have reduced the costs of production, distribution, and promotion, as well as the search for talent. These changes have influenced the strategic positioning of major and independent record labels. We examine the new music releases of major and independent labels before and after the technological change, using a differences-in-differences design and unique data on over 63,000 albums released in the United States between 1990 and 2010. We find, first, that major labels increasingly choose artists that have been previously successful, both on the same label and on other labels; second, that music releases increase for independent labels but decrease for major labels; and third, that this selective approach appears to work, as a growing share of major label releases achieve commercial success on ...