Difference between revisions of "Thomes (2013)"
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|Source={{Source | |Source={{Source | ||
|Name of Study=Thomes (2013) | |Name of Study=Thomes (2013) | ||
| − | |Author= | + | |Author=Thomes, T. P. |
|Title=An economic analysis of online streaming music services | |Title=An economic analysis of online streaming music services | ||
|Year=2011 | |Year=2011 | ||
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|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 | |Authentic Link=http://www.sciencedirect.com/science/article/pii/S0167624513000103 | ||
| + | |Link=http://www.sciencedirect.com/science/article/pii/S0167624513000103 | ||
|Reference=Liebowitz (2006a); Peitz and Waelbroeck (2004); Resinger (2012); | |Reference=Liebowitz (2006a); Peitz and Waelbroeck (2004); Resinger (2012); | ||
| − | |Plain Text Proposition= | + | |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)?, | |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)?, | ||
|EvidenceBasedPolicy=D. Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability), | |EvidenceBasedPolicy=D. Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability), | ||
| − | |Discipline= | + | |Discipline=D42: Monopoly, L12: Monopoly • Monopolization Strategies, L82: Entertainment • Media |
| − | |Intervention-Response=* Streaming music services such as the 'two-tier fremium' model can act as effective mitigation of digital piracy | + | |Intervention-Response=* Streaming music services such as the 'two-tier fremium' model can act as effective mitigation of digital piracy. |
| − | * A successful streaming service is likely to have a monopoly or near-monopoly but the provision of different services to different consumer markets by vertically bisecting the service (into free and advertising supported and high quality advertising free subscription models) means that there is still a choice for the consumer | + | * A successful streaming service is likely to have a monopoly or near-monopoly but the provision of different services to different consumer markets by vertically bisecting the service (into free and advertising supported and high quality advertising free subscription models) means that there is still a choice for the consumer. |
| − | |Description of Data= | + | |Description of Data=This study analyses the usage of two types of streaming music service: a free-to-use model with advertising and a premium subscription model. The study uses sales data from 2009 to 2011 from the International Federation of Phonographic Industries to assess the effects of the music streaming service models on music piracy. |
| − | |Data Year=2009 | + | |Data Year=2009-2011 |
|Data Type=Secondary data | |Data Type=Secondary data | ||
|Data Source=IFPI (2011); | |Data Source=IFPI (2011); | ||
|Method of Collection=Quantitative Collection Methods, Quantitative data/text mining, Qualitative Collection Methods, Case Study | |Method of Collection=Quantitative Collection Methods, Quantitative data/text mining, Qualitative Collection Methods, Case Study | ||
|Method of Analysis=Quantitative Analysis Methods, Quantitative content analysis (e.g. text or data mining) | |Method of Analysis=Quantitative Analysis Methods, Quantitative content analysis (e.g. text or data mining) | ||
| − | |Industry=Sound recording and music publishing | + | |Industry=Sound recording and music publishing; |
| − | |Country=European Union; | + | |Country=European Union; United States; |
| − | |Cross-country= | + | |Cross-country=Yes |
|Comparative=Yes | |Comparative=Yes | ||
|Government or policy=No | |Government or policy=No | ||
| − | |Literature review= | + | |Literature review=No |
}} | }} | ||
|Dataset={{Dataset | |Dataset={{Dataset | ||
| − | |||
| − | |||
| − | |||
| − | |||
|Sample Size=2 | |Sample Size=2 | ||
|Level of Aggregation=Music streaming services, | |Level of Aggregation=Music streaming services, | ||
| − | |Data Material Year=2009 | + | |Data Material Year=2009-2011 |
}} | }} | ||
}} | }} | ||
Latest revision as of 17:42, 12 January 2017
Contents
Source Details
| Thomes (2013) | |
| Title: | An economic analysis of online streaming music services |
| Author(s): | Thomes, T. P. |
| 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 , Open Access |
| Key Related Studies: | |
| Discipline: | |
| Linked by: | |
| About the Data | |
| Data Description: | This study analyses the usage of two types of streaming music service: a free-to-use model with advertising and a premium subscription model. The study uses sales data from 2009 to 2011 from the International Federation of Phonographic Industries to assess the effects of the music streaming service models on music piracy. |
| Data Type: | Secondary data |
| Secondary Data Sources: | |
| Data Collection Methods: | |
| Data Analysis Methods: | |
| Industry(ies): | |
| Country(ies): | |
| Cross Country Study?: | Yes |
| Comparative Study?: | Yes |
| 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
- Streaming music services such as the 'two-tier fremium' model can act as effective mitigation of digital piracy.
- A successful streaming service is likely to have a monopoly or near-monopoly but the provision of different services to different consumer markets by vertically bisecting the service (into free and advertising supported and high quality advertising free subscription models) means that there is still a choice for the consumer.
Coverage of Study
Datasets
| Sample size: | 2 |
| Level of aggregation: | Music streaming services |
| Period of material under study: | 2009-2011 |
