Difference between revisions of "Thomes (2013)"
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|Full Citation=Thomes, Tim Paul. An economic analysis of online streaming music services. Information Economics and Policy 25.2 (2013): 81-91. | |Full Citation=Thomes, Tim Paul. An economic analysis of online streaming music services. Information Economics and Policy 25.2 (2013): 81-91. | ||
|Abstract=Streaming music services represent the music industry’s greatest prospective source of revenue and are well established among consumers. This paper presents a theory of a streaming music business model consisting of two types of services provided by a monopolist. The first service, which offers access free of charge, is of low quality and financed by advertising. The second service charges its users and is of high quality. The analysis demonstrates that if users are highly tolerant of commercials, the monopolist benefits from advertising funding and hence charges a high price to users of the fee-based service to boost demand for the advertising supported service. The analysis addresses the welfare consequences of such a business model and shows it is an effective policy for combating digital piracy. | |Abstract=Streaming music services represent the music industry’s greatest prospective source of revenue and are well established among consumers. This paper presents a theory of a streaming music business model consisting of two types of services provided by a monopolist. The first service, which offers access free of charge, is of low quality and financed by advertising. The second service charges its users and is of high quality. The analysis demonstrates that if users are highly tolerant of commercials, the monopolist benefits from advertising funding and hence charges a high price to users of the fee-based service to boost demand for the advertising supported service. The analysis addresses the welfare consequences of such a business model and shows it is an effective policy for combating digital piracy. | ||
+ | |Authentic Link=http://www.sciencedirect.com/science/article/pii/S0167624513000103 | ||
+ | |Plain Text Proposition=• This paper examines a monopolistic streaming music business model with two vertically differentiated types of services. | ||
+ | • The low-quality service offers free access and is advertising based, while the high-quality service is fee based. | ||
+ | • High tolerance of advertising benefits the monopolist and harms users. | ||
+ | • Launching both types of services never leads to a socially desirable outcome. | ||
+ | • Such a streaming music business model may be an effective means to combat digital piracy | ||
+ | |FundamentalIssue=1. Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare, 4. Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption), 2. Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)?, | ||
|Discipline=D4: Market Structure and Pricing, D42: Monopoly, L1: Market Structure; Firm Strategy; and Market Performance, L12: Monopoly • Monopolization Strategies, L8: Industry Studies: Services, L82: Entertainment • Media | |Discipline=D4: Market Structure and Pricing, D42: Monopoly, L1: Market Structure; Firm Strategy; and Market Performance, L12: Monopoly • Monopolization Strategies, L8: Industry Studies: Services, L82: Entertainment • Media | ||
|Cross-country=No | |Cross-country=No |
Revision as of 15:02, 9 April 2016
Contents
Source Details
Thomes (2013) | |
Title: | An economic analysis of online streaming music services |
Author(s): | Tim Paul Thomes |
Year: | 2011 |
Citation: | Thomes, Tim Paul. An economic analysis of online streaming music services. Information Economics and Policy 25.2 (2013): 81-91. |
Link(s): | Definitive , |
Key Related Studies: | |
Discipline: | |
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About the Data | |
Data Description: | |
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Data Analysis Methods: | |
Industry(ies): | |
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Cross Country Study?: | No |
Comparative Study?: | No |
Literature review?: | No |
Government or policy study?: | No |
Time Period(s) of Collection: | |
Funder(s): |
Abstract
Streaming music services represent the music industry’s greatest prospective source of revenue and are well established among consumers. This paper presents a theory of a streaming music business model consisting of two types of services provided by a monopolist. The first service, which offers access free of charge, is of low quality and financed by advertising. The second service charges its users and is of high quality. The analysis demonstrates that if users are highly tolerant of commercials, the monopolist benefits from advertising funding and hence charges a high price to users of the fee-based service to boost demand for the advertising supported service. The analysis addresses the welfare consequences of such a business model and shows it is an effective policy for combating digital piracy.
Main Results of the Study
• This paper examines a monopolistic streaming music business model with two vertically differentiated types of services. • The low-quality service offers free access and is advertising based, while the high-quality service is fee based. • High tolerance of advertising benefits the monopolist and harms users. • Launching both types of services never leads to a socially desirable outcome. • Such a streaming music business model may be an effective means to combat digital piracy
Policy Implications as Stated By Author