MUSIC INDUSTRY ECONOMICS: A Global Demand Model for Pre-Recorded Music

This focus and main contribution of this study is to develop an econometric model which, through empirical analysis, determines those factors that affect the demand for prerecorded audio software. Through the creation and use of a hedonic demand model, the study finds that changes in technology that result in perceived quality improvements, increases in real national income, and a youthful population are all determinants in the demand for prerecorded music. It examines pertinent issues regarding the supply side of pre-recorded music within the structure of the industry, recent literature in the entertainment industry, and areas for research. Uses time-series, cross-sectional analysis, pooled regression, along with descriptive statistics to analyze explanatory factors upon which independent researchers, economists, sociologists, and trade organizations generally agree. These outcomes assist in predicting the demand for prerecorded music. The study then pools the regression according to United Nations’ income designations and a world aggregate.