Record labels, competition, and diversity in Spotify Charts

Over the past few years, the Latin American music industry has experienced significant growth in the generation of royalties from digital music. Nonetheless, it remains underexplored academically, especially regarding the influence of major record labels such as Universal, Sony, and Warner on market concentration, product standardization, and diversity. By integrating three databases, two from Spotify and one we constructed, covering ten Latin American countries, this study aimed to address two key issues: the evolution of concentration and inequality in Spotify’s music consumption, and the contribution of different record labels to diversity in popularity charts. Through descriptive and inferential statistics, including fixed-effects panel data regressions, we obtained exciting findings that shed light on the dynamics of the region. Firstly, we found evidence of overall decreasing concentration levels over time on a label-level, although this result was overshadowed by the upper portion of the distribution retaining a massive proportion of streams. Secondly, we highlighted the varied contribution to diversity by record labels, controlling for other macroeconomic and technological variables, with Universal Music Group being the only entity with a positive correlation. As a plausible explanation, we hypothesise on the relevance of contract types between artists and record labels ––production versus distribution––, which our study didn’t capture. We conclude with a discussion on the case of Brazil, the spurious long-tail phenomena, and offer further insights on the adoption of monetisation caps on the side of the streaming platforms, and future avenues of research in this thriving field, mainly focusing on more sophisticated modelling that incorporate possible non- linearities when relating success to the songs’ musicological characteristics.