The Impact of Music Streaming on the Similarity of Listening Behavior across Consumers

Category: Marketing Seminar
When: 30 January 2018
, 12:15
 - 13:30
Where: Campus Westend, RuW 1.201
Speaker: Dr. Hannes Datta (University of Tilburg)

The Impact of Music Streaming on the Similarity of Listening Behavior across Consumers

George Knox, Tilburg University

Hannes Datta, Tilburg University

Bart J. Bronnenberg, Stanford University

Streaming platforms offer consumers massive variety, e.g., Spotify’s library contains over 30 million songs. Users are unlikely to know about all available titles and need to search for music that matches their tastes. A natural question is to what extent the platform lowers these consumer search frictions in a way that caters to individual, idiosyncratic tastes. Conversely, the streaming platform may have incentives to promote the same music to everyone, effectively concentrating listening on a handful of artists; for example, the most popular playlist on Spotify, “Today’s Top Hits”, has 18 million followers. Given the rapid growth of these platforms, and concerns about their increasing economic power over producers and consumers, the extent to which platforms encourage uniqueness or promote homogeneity in consumption is an important question. This paper addresses this question by investigating changes in listening similarity for pairs of consumers, around the time of their adoption of streaming technology. We find strong evidence that Spotify broadly decreases similarity in listening histories across consumers. This result remains robust to alternative dimensions over which similarity is measured (e.g., artists, genre, etc.), and persists for at least 5 months after adoption.

Keywords: streaming platforms, music consumption, heterogeneous treatment effects


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