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The Superstar Effect

NMC/Radio and Records eChart main column as published in the 5/3/02 issue of R&R Independent artists are getting more exposure, and superstars are getting less money, all because of file piracy, according to a new study from researchers at the University of Buffalo and the University of Connecticut. They also come to some rather familiar conclusions - and make some interesting recommendations.

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The study, conducted by Professor Larry Sanders at UB and Professor Ram Gopal and Professor Sudip Bhattacharjee at UConn looked at chart data for the last 10 years and compared the number of new acts on the charts year to year. They then superimposed that data on the data delineating the rise in Napster usage, and found that the number of new artists increased after dropping steadily through the early 90s, and with the rise of Internet usage, the numbers match step by step.

Their study also looked at how long it took artists to get to the top of the charts, and how long they stayed there. "We looked at the movement when they hit the charts and then how far they rose," said Gopal. "We then tallied the number of positions and weeks on the charts and termed that the 'sustaining power' of the release. A typical act had much lower sustaining power, meaning they stayed on the chart for far fewer weeks once the Napster phenomenon took hold, perhaps suggesting that people were experiencing more music and not sticking with traditional superstars."

The team's suggestion is that superstars will end up losing money over the next few years due to file piracy. But instead of trying fight piracy with technology, the researchers suggest that the record labels create a two-tier system that allows people to purchase files online (or sample them). The newer artists would cost you less to listen to, and the superstars, whose music is most likely to be pirated, will cost more to sample.

The end result is that our study from 2000 remains intact: that the Nickelbacks, the J. Los and the POD's of the world are more valuable to Internet users and will suffer higher losses from piracy; independent bands will generate more mind share and lose less, which is to their advantage.

One conclusion that the team reaches is that there is a new feeling that the record industry is ripping them off. Gopal says, "There is now price sensitivity in the music space, all because there is a Napster-created option of 'free.' There is a new reality of music fans who have never seen or used 12" albums, and have no point of reference to view the value of MP3 files." There was no cry of vinyl albums being too expensive, nor CDs being too expensive, until it became necessary to explain away theft.

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