College Honors Program

Date of Creation

5-17-2024

Document Type

Thesis

First Advisor

Vivek Moorthy

Abstract

In an era marked by the transition from physical to digital music consumption, this paper explores the disruptive influence of streaming platforms, focusing particularly on the emergence of Spotify as an industry pioneer and leader. Through a difference-in-differences regression model spanning from November 2015 to March 2020, this study investigates Spotify’s impact on the stock prices of various companies within the music industry. Utilizing a subset of the Global Music Index (GMI), composed of 20 publicly traded companies across seven countries, the research analyzes how Spotify’s milestones, including its launch in 2008 and April 2018 IPO, influenced the valuation of music labels, radio corporations, live event companies, and more. The findings reveal nuanced effects on different sectors of the music industry. Based on the regression analysis, it can be concluded that neither the IPO’s announcement nor the official date had statistically significant impacts on the movement of music stock prices relative to the broader entertainment industry. By integrating quantitative analysis with qualitative insights from previous economic literature and industry perspectives, this research contributes to understanding the interaction between digital disruptors and traditional market dynamics.

Comments

Reader: Olena Staveley-O’Carroll

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