Video streaming service and CD sales

Various studies have analyzed the effects of online video services, such as YouTube, on compact disc (CD) sales. They reported both positive and negative effects of online video services on CD sales. Their positive effect is advertisement. Their negative effect is the existence of free alternatives such as pirated copies. The results of such studies vary according to the area of study, date, method, etc. To promote new Internet services, analyzing the effect of new services on traditional businesses is important in order to obtain support from business persons. Thus, in this study, we attempt to conduct such an analysis. It should be noted that the Japanese CD market has unique characteristics. For example, the sale of CDs still has a large volume in the music market. It is important to investigate the effects of online video services on CD sales. We have analyzed such effects by analyzing the initial-week sales and, decay ratio of CD sales and online video services. We found that 1) frequent viewings of YouTube increased CD sales in later periods. Thus, it has a positive advertising effect on CD sales in the Japanese Market. 2) The initial-week sale had already decreased before a large online video service, i.e., YouTube, became available. 3) In contrast, the decay speed of the CD sales increased after the second week, which was a negative effect of online video services. In this paper, we discuss how to utilize this contradicting information in business scenarios.