Graduation Year

2017

Date of Submission

4-2017

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Darren Filson

Reader 2

Murat Binay

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Terms of Use for work posted in Scholarship@Claremont.

Rights Information

© 2017 Jie Victoria Tang

Abstract

The recorded music industry experienced declining revenue from 1998 to 2014, but it saw a return to growth in 2015. This thesis uses a sample of 17 countries to explore the determinants behind this revenue expansion, and to assess whether this sales growth can be sustained. I examine the impact of eight factors on the overall, physical, digital, and streaming music revenue and revenue per capita, as well as the digital and streaming revenue share. The eight independent variables include the GNI per capita, the total population, the percentage of the young people, the percentage of the young females, the gross enrollment rate in secondary education, the percentage of Internet users, the percentage of mobile cellular subscriptions, and the percentage of fixed broadband subscriptions. Based on my study, the fixed broadband subscription rate has an impact that is both statistically significant and economically important on the streaming revenue share, which makes it the most important indicator for the industry’s potential sustainable development. The percentage of the young population also shows statistical significance and economic importance for explaining the overall and physical revenue per capita, but it has no effect on the digital and streaming revenue share. Also, although the Internet penetration rate and the mobile cellular subscription rate are statistically insignificant for the digital or streaming revenue share, point estimates suggest that these factors have important economic impacts.

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