NYU Stern Professor Vasant Dhar, along with student Elaine Chang, has released a new research paper titled “Does Chatter Matter”. Dhar, an expert in the strategic implications of information technology has found that the volume of blog posts featured on a site before an album’s release can significantly affect future album sales and in turn, predict sales for record labels.
This study is one of the first to quantify the economic impact of viral marketing on the music industry.
Based on a sample of 108 albums released during the first two months of 2007, Dhar found that when legitimate blog posts exceeded a threshold of 40 before an album’s release, sales were three times the average. If albums blogged about were associated with a major record label, sales went up five-fold. When blog activity reached more than 250 posts, sales were six times the average regardless of an association with a major or independent label. The number of an artist’s MySpace friends also contributed to higher future sales, but had a weaker correlation as compared to blog chatter.