Concentration and Diversity Revisited: Production Logics and the U.S. Mainstream Recording Market, 1940-1990

What shapes the diversity of media markets? A literature on the U.S. recording industry offers competing accounts. The cyclical account stresses the negative effect of market concentration, where high concentration dampens diversity. The open system account stresses a mitigated effect, where the logic of decentralized production reduces concentration's negative effect. However, both accounts contain notable gaps. This article fills these gaps and consequently advances this literature. Most notably, it adjudicates these accounts by analyzing time series data on two carriers of diversity: performing acts and recording firms. When decentralized production is low, as in the 1940s, high concentration reduces the number of new performers and new firms. When decentralized production grows more pronounced, as in the 1980s, concentration's negative effect is reduced and eventually eliminated.