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Let the music play? Free streaming and its effects on digital music consumption


Aguiar, Luis (2017). Let the music play? Free streaming and its effects on digital music consumption. Information Economics and Policy, 41:1-14.

Abstract

The tremendous growth in interactive music streaming is raising questions about its effects on the music industry. While premium subscriptions offer unconstrained access to music streaming, free services typically offer limited mobility in their usage. If streaming enhances product discovery, and if consumers value mobility, then free streaming could stimulate the use of channels that allow mobile consumption. I exploit the introduction of a listening cap by the platform Deezer to identify the effect of free and mobile-restricted streaming on the music purchasing and piracy behavior of a large set of individuals. Results show that users visited licensed and unlicensed downloading websites around 2% less than they would have had the restriction not been introduced, showing a positive effect of free streaming on these alternative sources of consumption. Results also indicate heterogeneous effects of the restriction, and back of the envelope calculations suggest that the purchasing and piracy activities of lighter streamers are stimulated by free streaming to a larger extent.

Abstract

The tremendous growth in interactive music streaming is raising questions about its effects on the music industry. While premium subscriptions offer unconstrained access to music streaming, free services typically offer limited mobility in their usage. If streaming enhances product discovery, and if consumers value mobility, then free streaming could stimulate the use of channels that allow mobile consumption. I exploit the introduction of a listening cap by the platform Deezer to identify the effect of free and mobile-restricted streaming on the music purchasing and piracy behavior of a large set of individuals. Results show that users visited licensed and unlicensed downloading websites around 2% less than they would have had the restriction not been introduced, showing a positive effect of free streaming on these alternative sources of consumption. Results also indicate heterogeneous effects of the restriction, and back of the envelope calculations suggest that the purchasing and piracy activities of lighter streamers are stimulated by free streaming to a larger extent.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Scopus Subject Areas:Social Sciences & Humanities > Economics and Econometrics
Physical Sciences > Management, Monitoring, Policy and Law
Scope:Discipline-based scholarship (basic research)
Language:English
Date:December 2017
Deposited On:07 Dec 2023 14:03
Last Modified:29 Jun 2024 01:41
Publisher:Elsevier
ISSN:0167-6245
OA Status:Hybrid
Free access at:Publisher DOI. An embargo period may apply.
Publisher DOI:https://doi.org/10.1016/j.infoecopol.2017.06.002
Other Identification Number:merlin-id:18292
  • Content: Published Version
  • Language: English
  • Licence: Creative Commons: Attribution 4.0 International (CC BY 4.0)