The Effect of the COVID-19 outbreak on Increasing Returns to Information: Evidence from the Korean Popular Music Market

서지정보

· 발행기관 : 한국마케팅학회
· 수록지 정보 : 마케팅연구 / 35권 / 4호 / 145 ~ 160페이지
· 저자명 : 김종대, 이유석

초록

In this paper, we explore the effect of the COVID-19 (Coronavirus Disease-19) outbreak on consumer behaviors in the Korean popular music market by adopting the model of increasing returns to information. As music is an experience good, we expect that increasing returns to information do exist in the Korean music market. We also posit that the COVID-19 outbreak affects consumers’ music choice and consumption behaviors so that the overconcentration in the music market is diminished. We suggest two conceptual backgrounds for such a reduction in overconcentration. First, at the market level, the music consumption by low-involved consumers may be decreased and the proportion of the contribution from high-involved consumers may be increased after the outbreak. Second, at the individual consumer level, consumers may have a lower deliberation cost and a lower search cost due to the COVID-19 outbreak. We argue that the magnitude of increasing returns to information is reduced through these forces resulting from the COVID-19 outbreak. Using data from the Gaon chart, the official music chart operated by the Korea Music Content Association, we find empirical evidence of the existence of increasing returns to information in the Korean popular music market. More importantly, we find that the COVID-19 outbreak has reduced the magnitude of increasing returns to information. This study is among the first empirical studies that investigate the effect of the COVID-19 outbreak on consumer behaviors in Korea. It contributes to the literature by providing a modeling approach to investigate the impact of an exogenous shock on increasing returns to information. This study also contributes to the field of marketing by advancing substantial knowledge on increasing returns to information in the music market which has not been explored much in the field. We also suggest practical implications for digital music platforms, producers, and artists in the era of the COVID-19.

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