The Effects of Gender, Age, and Income on the Willingness to Pay for Music Downloads

This paper examines the effects of gender, age, and income on the willingness to pay (WTP) for music downloads. The examination is based on an online survey of 1 330 Finnish consumers conducted in June 2010. The analysis of the survey data follows a two-phase strategy. In the first phase, the effects of the explanatory variables on the consumers’ unwillingness to pay (UWTP) for album and track downloads are examined by using contingency tables and the Pearson’s χ2 tests of independence. In the second phase, the effects of the explanatory variables on the consumers’ actual WTP for album and track downloads are examined by using one-way analysis of variance (1-ANOVA) and post-hoc multiple comparisons. The results of the analysis suggest that there are several statistically significant differences in the WTP for albums and tracks between the examined consumer segments. These findings and their implications should be taken into consideration in the future business models of music download stores

Can filesharers be triggered by economic incentives? Results of an experiment

Illegal filesharing on the internet leads to considerable financial losses for artists and copyright owners as well as producers and sellers of music. Thus far, measures to contain this phenomenon have been rather restrictive. However, there are still a considerable number of illegal systems, and users are able to decide quite freely between legal and illegal downloads because the latter are still difficult to sanction. Recent economic approaches account for the improved bargaining position of users. They are based on the idea of revenue-splitting between professional sellers and peers. In order to test such an innovative business model, the study reported in this article carried out an experiment with 100 undergraduate students, forming five small peer-to-peer networks.The networks were confronted with different economic conditions.The results indicate that even experienced filesharers hold favourable attitudes towards revenue-splitting.They seem to be willing to adjust their behaviour to different economic conditions

Piracy on the High C's: Music Downloading, Sales Displacement, and Social Welfare in a Sample of College Students

Recording industry revenue has fallen sharply in the last three years, and some -- but not all -- observers attribute this to file sharing. We collect new data on albums obtained via purchase and downloading, as well as the consumers' valuations of these albums, among a sample of US college students in 2003. We provide new estimates of sales displacement induced by downloading using both OLS and an instrumental variables approach using access to broadband as a source of exogenous variation in downloading. Each album download reduces purchases by about 0.2 in our sample, although possibly much more. Our valuation data allow us to measure the effects of downloading on welfare as well as expenditure in a subsample of Penn undergraduates, and we find that downloading reduces their per capita expenditure (on hit albums released 1999-2003) from $126 to$100 but raises per capita consumer welfare by $70.

Household Demand for Broadband Internet Service

As part of the Federal Communications Commission (“FCC”) National Broadband Report to Congress, we have been asked to conduct a survey to help determine consumer valuations of different aspects of broadband Internet service. This report details our methodology, sample and preliminary results. We do not provide policy recommendations. This draft report uses data obtained from a nationwide survey during late December 2009 and early January 2010 to estimate household demand for broadband Internet service. The report combines household data, obtained from choices in a real market and an experimental setting, with a discrete-choice model to estimate the marginal willingness-to-pay (WTP) for improvements in eight Internet service characteristics.

Pirate or subscriber? An exploratory study on italian consumers' music habits

Purpose of the paper: This paper analyzes Italian consumers’ music habits in terms of online piracy behaviors and their interest toward subscription-based music services (SBMS), i.e. services that for a small monthly fee give users legal access to vast music libraries across multiple devices. The objective is to try and profile a piracy-prone consumer and explore if SBMS could be a viable alternative to online music piracy in Italy, where the general piracy rate is very high. Methodology: The study is based on an empirical quantitative analysis through the collection of 505 questionnaires completed by Italian consumers. Findings: The paper highlights how Italian consumers reflect the ‘attitude-behavior gap’ in music consumption, as they perceive online music piracy as ethically wrong, yet they still show low preference for the legal, reasonably priced choice (such as SBMS). Younger, male, lower education, students have the highest propensity towards online piracy. In addition, consumers’ awareness, familiarity and interest in subscriptionbased music services are still very low. Research limitations: The limitations of the paper are linked mainly to the adapted scales, to the omission of alternative determinants of attitude towards piracy, to the composition of the sample and for analyzing only two subscription-based music services (Napster and Spotify). Managerial implications: The results call for greater efforts by music industry actors and public institutions to educate Italian consumers about the consequences of their online piracy behavior and the possible solutions offered by SBMS. Originality of the paper: This paper is the first to focus on Italian consumers’ music habits, their attitude and behavior towards online piracy and their interest toward subscription-based music services as a viable alternative

On-demand music streaming and its effects on music piracy

In the late 1990’s, music industry revenues began to decline, mostly due to the proliferation of the Internet which enabled consumers to easily pirate music. Record companies and artists began fighting legal battles and investing in educational campaigns in an attempt to teach young people the value of intellectual property. However, the times are now starting to change. In 2016, US retail revenues from recorded music grew 11,4%, the biggest increment since 1998. Streaming revenues have now surpassed income from the sale of traditional formats. Nevertheless, there is still a big player in the market worth paying attention to: music piracy. This thesis seeks to investigate the impact on-demand streaming services have been having on illegal downloading and uncover young music consumers’ habits and preferences. Through an online survey, the study used a conjoint analysis to uncover consumers’ preference structure. It also included direct questions to assess music consumers’ characteristics and habits. The results show that ethics and perceived risk negatively influence the decision to pirate music. On the other hand, higher ethics and involvement are associated with the propensity to pay for streaming services. Also, as age increases the propensity to pay for streaming rises and the tendency to pirate decreases. Even though consumers are price sensitive, price is not always the main decision factor. Finally, we observe that streaming did in fact help to reduce the incidence of music piracy among young music consumers.No final dos anos 90, as receitas da indústria da música começaram a diminuir, principalmente devido à proliferação da Internet, que permitia aos consumidores piratear música facilmente. Discográficas e artistas começaram a travar disputas jurídicas e a investir em campanhas educacionais na tentativa de ensinar aos jovens o valor da propriedade intelectual. No entanto, os tempos estão a mudar. Em 2016, a receita associada à música cresceu 11,4%, o maior incremento desde 1998. As receitas de streaming já ultrapassaram as receitas dos formatos tradicionais. No entanto, ainda há um grande player no mercado ao qual vale a pena prestar atenção: a pirataria. A presente tese procura investigar o impacto que os serviços de streaming têm tido na pirataria de música, e compreender os hábitos e preferências dos jovens consumidores de música. Num questionário on-line, o estudo recorreu a uma análise conjoint para desvendar a estrutura de preferências dos consumidores. Também incluiu perguntas que permitiram avaliar as características e hábitos dos consumidores. Os resultados demonstram que a ética e o risco influenciam negativamente a decisão de piratear música. Por outro lado, maior ética e envolvimento estão associados a uma maior propensão a pagar por streaming. Além disso, à medida que a idade aumenta, a propensão a pagar por streaming aumenta, e a tendência para piratear diminui. Apesar dos consumidores serem sensíveis ao preço, este nem sempre é o principal fator de decisão. Finalmente, observamos que o streming ajudou a reduzir a incidência da pirataria entre os jovens consumidores de música

Pirates of the web: the curse of illegal downloading

Music piracy is the major factor leading to the downturn in paid-for music consumption. This study aims to distinguish between the determinants of a music pirate and a genuine consumer of music (age, gender, income, music preference, music experience). It also investigates attendance at live performances, which previous research suggests, will tend to inhibit the decline of paid-for recorded music. This research is innovative in that it investigates a range of antecedents of music piracy. The method utilises a structured questionnaire survey (n=214) and regression analysis to elicit which factors play the most important role affecting our respondents' choices in buying music, illegal downloading music and attending live concerts. Managerial and theoretical implications are presented

Drivers and deterrents of music streaming services purchase intention

Generalised access to online content, with no transfer of ownership, revolutionised consumer behaviour. The music industry is a paradigmatic example: physical product sales decreased and even online music stores are increasingly threatened by the rise of on-demand music streaming services (MSS). However, MSS find it difficult to persuade users to opt for the premium version. Therefore, the purpose of this study is to assess what drives (deters) users' intention to purchase MSS, as well as to examine the role of gender and age. Based on data collected from 318 MSS users, the study shows that both perceived value and perceived fee are significant predictors of MSS purchase intention, with the negative impact of the latter surpassing the positive one of the former, while the moderating effect of age and gender was supported. Our study contributes to a deeper understanding of MSS purchase intention, and offers important insights to MSS providers. (c) 2019 Inderscience Enterprises Ltd

Green Business and Online Price Premiums: Will Consumers Pay More to Purchase from Environmentally Friendly Technology Companies?

This study explores the “green” business model for the digital economy. Specifically, it asks whether online consumers will pay more to purchase from a company that they perceive to be socially responsible when it comes to the environment. We conduct an experiment where consumers are presented with different facts regarding the environmental practices of a fictional online retailer of digital music, movies and MP3 players, and are then asked to indicate the maximum price they would be willing to pay for these products. Each consumer first reacts to an environmentally neutral company, followed by an environmentally friendly company and an environmentally unfriendly company presented in a random order. Results show a significant difference between the maximum prices consumers are willing to pay for products with each group, with the environmentally friendly company receiving a modest premium over the neutral group and with the environmentally unfriendly company experiencing a steep price drop for their products compared to the neutral group where many consumers indicate that they would not purchase at any price from the environmentally unfriendly company. Our findings have practical implications for the digital economy as companies look for ways to differentiate themselves from competitors

The Determinants of Music Piracy in a Sample of College Students

Why do some individuals pirate digital music while others pay for it? Using data on a sample of undergraduate students, we study the determinants of music piracy by looking at whether a respondent’s last song was obtained illegally or not. In doing so, we incorporate (i) the individual-specific transactions costs that constitute the effective price of illegal music; and (ii) individual willingness to pay (WTP) for digital music, which we elicit using a simple field experiment and which we use to control for the unobserved heterogeneity of preferences between respondents. Our empirical results indicate that a respondent’s subjective probability of facing a lawsuit and her degree of morality both have a negative impact on the likelihood that her last song was obtained illegally. These results are robust whether WTP is estimated parametrically or nonparametrically. We conclude by discussing the practical implications of our findings.Music Piracy, Transactions Costs, Subjective Expectations