In this article, we study a two-sided market model of the music industry. Artists either self-distribute their music or sell it via online retailers, which act as gatekeepers by filtering bad music. We find good/bad artists and consumers to be equally well or better off by using gatekeepers due to the quality signaling function the intermediaries provide. Further, more good than bad artists choose traditional distribution via retailers because of the bad artists' relatively higher risk of not passing the gatekeeping mechanism. Despite its higher price and lower variety, also consumers generally prefer traditionally distributed music as its quality is assured. The findings may explain why still only few artists choose to bypass gatekeepers, inspite of the ease and low cost of self-distributing digital music.
Abstrakt / Utdrag