If you've ever wondered about the true power of bloggers, look no further than a new study that shows blog buzz is directly related to real-world album sales. The implication: User-generated content influences decision making in the music industry.
Digital Journal — The study's abstract
says it all: "The Internet has enabled the era of user-generated content, potentially breaking the hegemony of traditional content generators as the primary sources of 'legitimate' information."
According to New York University's Leonard N. Stern School of Business, the amount of Internet "chatter" about a musician's upcoming album directly relates to how well it sells.
The study's authors, Vasant Dhar and Elaine Chang, looked at user-generated content on blogs and social networks and attempted to "examine the usefulness of such content, consisting of data from blogs and social networking sites in predicting sales in the music industry." More specifically, the study was attempting to evaluate whether user-generated content on blogs and social networks provided a predictive value, if it was retrospective or just plain noise.
Tracking changes in online discussion for a sample of 108 albums for four weeks before and after release dates, the study showed a direct relationship between blog buzz and the success of an album.
The study found three main points:
(a) the volume of blog posts about an album is positively correlated with future sales; greater increases in an artist’s Myspace friends week over week have a weaker correlation to higher future sales; and (c) traditional factors are still relevant – albums released by major labels and albums with a number of reviews from mainstream sources like Rolling Stone also tended to have higher future sales.
Researchers monitored album sales ranks on Amazon along with blogs, news articles and the number of friends someone had on MySpace. Researchers admit they would have preferred to use Nielsen SoundScan data, but noted "its data are proprietary and very expensive to obtain."
According to their research, blog chatter is the most important variable in the relationship with album sales; if an album has more than 40 blog posts, it will have above-average sales figures. Furthermore, the study says extremely high blog chatter (more than 240 blog posts) allows albums to "overcome the disadvantage of being released by an independent label."
In addition to blog chatter, researchers say bands who have a higher number of MySpace friends are also likely to see stronger album sales. Researchers said about 80 per cent of artists in their sample (ranging from John Mellencamp to American Idol's Katherine McPhee) had an official Myspace page.
Their research also shows higher percentage changes in the number of friends a band has on MySpace relates to increased weekly sales in the future. The study's authors note, "This is interesting because both these variables tend to have usable information before an album is released, while the majority of reviews in all review source categories only begin to appear within the first week surrounding the album release date."
Outside of the blog world, the study mentions Rolling Stone
editorial coverage as a key driver of album sales: "Although we found that user-generated content is a good predictor of music album sales, our analysis showed that traditional factors cannot be ignored," the study says. And an obvious point: The more reviews an album gets in mainstream media, the better it will sell.
While online chatter is related to album sales, researchers say they are not able to conclude whether increased blog chatter actually causes
increased sales. "It may be the case, for example, that it is another, unobserved variable that causes both increased chatter and sales with the increased chatter occurring first," the study reports. Other factors can include the quality of an artist's work as well as album expectations.
The study concludes with a cautionary note for marketers that want to exploit blog posts to increase sales, saying, "It is conceivable, for example, that if blog posts start becoming manipulated because people think they have an impact on sales, that the predictive power might disappear because the underlying reasons for it disappear. There is a crude analogy here to efficiency in financial markets were predictive models lose their power over time as the relationships become recognized and exploited by people who seek to benefit from their existence."
The full study can be found online here
(opens in PDF).