Music for free? How free ad-funded downloads affect consumer choice

Abstract

The market for digital content (e.g., music or movies) has been affected by large numbers of Internet users downloading content for free from illegitimate sources. The music industry has been exposed most severely to these developments and has reacted with several different online business models but with only limited success thus far. These business models include attempts to attract consumers by offering free downloads while relying on advertising as a revenue source. Using a latent-class choice-based conjoint analysis, we analyze the attractiveness of these business models from the consumer's perspective. Our findings indicate that advertising-based models have the potential to attract consumers who would otherwise refrain from commercial downloading, that they cannot threaten the dominance of download models like iTunes, and that current market prices for subscription services are unattractive to most consumers.

The Relationship between Access Practices and Economic Systems

“…This is in contrast to ownership, which represents a long-term and intimate relationship and where consumers desire uniqueness and to extend the self (Chen 2009). Papier et al (2011) find similar results in a study of music consumption comparing ownership (e.g., buying digital music files via iTunes) and access modes of consumption (e.g., Spotify music streaming). build on this comparison by conceptualizing access-based consumption as transactions that do not lead to transfer of ownership but provide temporary access to consumption resources.…”

“…This emerging field of research has so far been focused on unpacking the nature of consumption during marketmediated access (e.g., Hennig-Thurau et al 2007;Papier et al 2011;Lamberton and Rose 2012), or intra-family/friend sharing and borrowing (Belk 2010;Belk and Llamas 2011;Jenkins et al 2014). Prior research has also predominantly studied Western consumer culture contexts, especially in North America, and we know very little about resource distribution practices and related consumption consequences in other sociocultural contexts.…”

Understanding today’s music acquisition mix: a latent class analysis of consumers’ combined use of music platforms

“…But recent research has stressed the need to take a consumer rather than a platform perspective, because today's technological context facilitates combined use of different platforms. Papies et al (2011) and Weijters et al (2014) have studied consumer utility of different music platforms by applying conjoint analysis: they presented respondents with fictitious music platforms defined by experimentally manipulated attributes (such as cost, delivery mode, etc.). To complement these studies, the current study questions consumers about their actual use of existing music platforms.…”

Consumer-based strategy: using multiple methods to generate consumer insights that inform strategy

“…What they all have in common is that they can be used to generate data at the consumer level. Observational data (such as publicly available online data; Hennig-Thurau et al 2015; Thompson et al 2015), experiments (Heidenreich et al 2015;Xie et al 2015), surveys (Brocato et al 2015;Gallan et al 2013), customer purchase data (Carter and Curry 2013;Papies et al 2011), and qualitative data (Leigh et al 2006;Lemke et al 2011) can be used to generate consumer insights. An easy Blitmus test^is whether each row in one's dataset represents a consumer (as opposed to a firm or a market).…”