Tuesday, February 12, 2008

Dear Record Companies, It's Not Rocket Science

From 60 Second Science. And here is another great music biz post that Morty and Moishe Recommend...

Blog Chatter Can Triple Future Sales of Music Albums According to New Study from NYU Stern
Thursday February 7, 9:42 am ET

NEW YORK--(BUSINESS WIRE)--In his new research paper entitled, “Does Chatter Matter,” co-authored with former student Elaine Chang, NYU Stern Professor Vasant Dhar, an expert in the strategic implications of information technology, finds that the volume of blog posts featured on the Internet before an album’s release can significantly affect future album sales, and in turn predict sales for record labels. This is the first study to quantify the economic impact of user-generated content for the music industry.

Based on a sample of 108 albums released during the first two months of 2007, Professor Dhar found:

* When legitimate blog posts exceeded a threshold of 40 before an album’s release, sales were three times the average
* If the albums blogged about were associated with a major record label, sales increased five-fold
* When blog activity reached more than 250 posts, sales were six times the average regardless of an association with a major or independent label
* The number of an artist’s MySpace friends also contributed to higher future sales, but had a weaker correlation as compared to blog chatter

Professor Dhar tracked changes in the volume of online chatter—blog posts and the number of friends an artist has on MySpace—four weeks before and after an album’s release date.

The full working paper is available at: https://archive.nyu.edu/handle/2451/23783

2 comments:

Mosihe said...

the record labels still think its the good old days, when Morty was producing soul records in and using payola to get your records played.

Morty said...

true. I used to slip Wolfman Jack 2 bills and a couple steak dinners - two months later Stevie Wonder was on the charts and hasn't looked back...