Dynamic Product Positioning in Differentiated Product Markets: The Effect of Fees for Musical Performance Rights on the Commercial Radio Industry
通过动态模型预测，若要求音乐电台支付表演权费用，将导致音乐电台数量显著且快速下降，例如费用占收入10%时，短期内减少4.6%，长期减少9.4%。
This article predicts how radio station formats would change if, as was recently proposed, music stations were made to pay fees for musical performance rights. It does so by estimating and solving, using parametric approximations to firms' value functions, a dynamic model that captures important features of the industry such as vertical and horizontal product differentiation, demographic variation in programming tastes, and multi-station ownership. The estimated model predicts that high fees would cause the number of music stations to fall significantly and quite quickly. For example, a fee equal to 10% of revenues would cause a 4.6% drop in the number of music stations within 2 1/2 years, and a 9.4% drop in the long run. The size of the change is limited, however, by the fact that many listeners, particularly in demographics that are valued by advertisers, have strong preferences for music programming. [PUBLICATION ABSTRACT]