From Knowledge@Wharton
Special to CNET News.com
Advance publicity is key to a record albums' success, according to Wharton marketing professor Peter Fader, and by trying to stamp out peer-to-peer music trading, record companies are shooting themselves in the foot.
In a new report, Fader proposes a statistical model for using advance orders to predict future sales of albums. His results lead to a clear conclusion: "The more buzz you generate, the more you sell," he says.
Fader’s thinking is controversial. Many people, including the record companies, disagree with the idea that peer-to-peer music networks such as Kazaa, Gnutella and the now-departed Napster have done more to boost record sales through creating buzz than have done to depress them by replacing buying with downloading. Fader says music downloading is a "form of advertising"--and that music companies should shift from making an album just a "collection of songs" into making it a gateway to a complex, multilayered entertainment experience.
http://news.com.com/2009-12-963196.html