Music Consumption Decisions with Non-Durable Streaming Options

60 Pages Posted: 22 Feb 2024

See all articles by Jason M. Walter

Jason M. Walter

University of Tulsa

R. Scott Hiller

Fairfield University - Department of Economics

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Abstract

Consumers are increasingly substituting non-durable information goods consumed through a streaming bundle that does not convey ownership for durable forms of the good. In this paper, we explore how individual preferences drive a consumer’s decision regarding music format. By employing a unique theoretical model and empirical analysis, we explore how a consumer’s demand for specific songs affects their benefits from streaming and retail formats. With empirical evidence of depreciation as a guide, we employ a simulation to identify a consumer’s ideal consumption format based on her individual listening preferences. Our study provides valuable insights for academics and industry practitioners interested in understanding the digital transformation of the music industry and has broader implications for the digitization of other information goods.

Keywords: streaming bundle, music consumption, subscription platform services, digital sales

Suggested Citation

Walter, Jason M. and Hiller, R. Scott, Music Consumption Decisions with Non-Durable Streaming Options. Available at SSRN: https://ssrn.com/abstract=4735600 or http://dx.doi.org/10.2139/ssrn.4735600

Jason M. Walter (Contact Author)

University of Tulsa ( email )

Tulsa, OK 74104
United States

R. Scott Hiller

Fairfield University - Department of Economics ( email )

Fairfield, CT 06824
United States

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