The Effect of Unexpected Chart Positions on the Firm Value of Music Labels. An Event Study of Album Success

Nima Mehrafshan, Björn Goerke and Michel Clement

EconStor Preprints from ZBW - Leibniz Information Centre for Economics

Abstract: We conduct an event study to (1) analyze whether investors revise their expectations about a music album’s success when new chart information is published and (2) estimate how these revised expectations affect the value of a music label. We find that expectations about the success of an album are formed with respect to the performance of the promotional singles and that failure to meet these expectations leads to negative stock returns. However, unexpectedly high chart positions do not lead to significantly higher valuations of labels. The initial album success is anticipated at a very early stage when single charts are released one week prior to the release of the initial album charts.

Keywords: Event Study Methodology; Product Samples; Music industry; expectation model (search for similar items in EconPapers)
JEL-codes: M31 O3 (search for similar items in EconPapers)
Date: 2016
Note: Eine vorherige Version wurde im Rahmen einer anderen kumulativen Dissertation bereits wie folgt veröffentlicht: Mehrafshan, N. (2013). Essays on Value Creation in Marketing Management. Unveröffentlichte Dissertation. Universität Hamburg.
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Citations: View citations in EconPapers (1)

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