Digital Music Consumption on the Internet: Evidence from Clickstream Data

40 Pages Posted: 16 May 2013

See all articles by Luis Aguiar

Luis Aguiar

University of Zurich - Department of Business Administration

Bertin Martens

Joint Research Centre

Date Written: March 15, 2013

Abstract

The goal of this paper is to analyze the behavior of digital music consumers on the Internet. Using clickstream data on a panel of more than 16,000 European consumers, we estimate the effects of illegal downloading and legal streaming on the legal purchases of digital music. Our results suggest that Internet users do not view illegal downloading as a substitute to legal digital music. Although positive and significant, our estimated elasticities are essentially zero: a 10% increase in clicks on illegal downloading websites leads to a 0.2% increase in clicks on legal purchases websites. Online music streaming services are found to have a somewhat larger (but still small) effect on the purchases of digital sound recordings, suggesting complementarities between these two modes of music consumption. According to our results, a 10% increase in clicks on legal streaming websites lead to up to a 0.7% increase in clicks on legal digital purchases websites. We find important cross country difference in these effects.

Keywords: Digital Music, Copyright, Downloading, Streaming, Piracy on the internet

JEL Classification: K42, L82, L86, Z1

Suggested Citation

Aguiar, Luis and Martens, Bertin, Digital Music Consumption on the Internet: Evidence from Clickstream Data (March 15, 2013). Available at SSRN: https://ssrn.com/abstract=2265299 or http://dx.doi.org/10.2139/ssrn.2265299

Luis Aguiar

University of Zurich - Department of Business Administration ( email )

Rämistrasse 71
Zurich, CH-8006
Switzerland

Bertin Martens (Contact Author)

Joint Research Centre ( email )

Edificio Expo, C
Inca Garcilaso, s/n
Sevilla, E-41092
Spain

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