High-status affiliations and the success of entrants: new bands and the market for live music performances, 2000-2012

Network affiliations have been extensively investigated as a way for new entrants to establish a foothold in markets. A commonly invoked mechanism is that of signaling, whereby affiliations provide exposure and improve a newcomer’s odds of success. Our paper highlights a second mechanism that we argue is especially relevant in cultural markets: how a new entrant’s perceived distinctiveness varies based on its affiliations. Leveraging data on music concerts, interviews of musicians, and biographical and genre information from archival sources, we investigate the effects of early affiliations for 1,385 bands formed between 2000 and 2005. In particular, we consider whether a new band benefits from appearing with a high-status act. If the main value is signaling, then a newcomer would be better off opening for high status bands, because doing so maximizes both legitimacy and exposure. However, in such conditions entrants run the risk of not being allocated enough attention, and thus not being seen as sufficiently distinctive. While the literature typically emphasizes the positive role of signaling, we find that our results more strongly support the notion of distinctiveness: new bands that frequently appeared with high-status artists made less money and were more likely to subsequently dissolve. This suggests that social network approaches to cultural markets need to better incorporate how network position affects a newcomer’s opportunity to be recognized as distinctive.