Why Do Consumers Pay Voluntarily? Evidence from Online Music - T. Regner and J. Barria Why Do Consumers Pay Voluntarily? Evidence from Online Music Tobias.

Slides:



Advertisements
Similar presentations
Chapter 28 Promotion and Place Name 12 SAM.
Advertisements

With the friendly assistance of: 4FriendsOnly.com AG (4FO AG) and Fraunhofer IIS AEMT Potato System and Signed Media Format - an Alternative Approach to.
PantherSoft Financials Smart Internal Billing. Agenda  Benefits  Security and User Roles  Definitions  Workflow  Defining/Modifying Items  Creating.
Posting Journal Entries to General Ledger Accounts Making Accounting Relevant Every business completes business transactions daily. Think about the various.
Chapter 15: Stockholders’ Equity
Chapter 11 – Accounting for a Merchandising Business
Capstone Project Spring 2008
Example 12.3 Explaining Spending Amounts at HyTex Include/Exclude Decisions.
1 Digital Music Survey Prepared for Demos: 19 th October 2009.
Voroat Kong ENG393 Section 501 Date: 6 th May, 2010.
Are Consumers Willing to Pay More for Fair Trade Products? Yotam Margalit Aner Sela Stanford University Just Supply Chains Conference Stanford University,
Credit Bureaus and Collection Practices Day 3
MBE Research Module 5. Week Prepare for Kick-off Meeting Assign teams Team forming Review and execute consulting contract Interview and.
CLASH OF THE RETURN POLICIES VS.. QUESTION  What factors make having a return policy a profitable strategy?  How do varying types of return policies.
Analyzing Changes in Financial Position
Do children judge books by their covers? A survey of middle schools students in a Hong Kong international school Christopher Chan Hong Kong Baptist University.
Module: 202 Create and Manage a SHOP Account. It is recommended that Agents, assisting Employers with Setup and Plans in NMHIX, take this course.
Digital File-Sharing: What Has Been/Will Be Its Impact? Stan J. Liebowitz School of Management University of Texas at Dallas Copyright Society Meetings.
1 A New Perspective: The Consumer Electronics Buying Process February 26, 2008.
Buying VS Downloading Which factors affect a person’s tendency to buy or download music for free? An investigation conducted by Angshu Madge and Inji Fyfe.
A wholesaler sells to retailers, and a retailer sells to the final users. In addition to using the general ledger, a business keeps a subsidiary ledger.
1 Dealer Price Discrimination in New Car Purchases: Evidence from the Consumer Expenditure Survey Pinelopi Goldberg (JPE, 1996) Presented by Jake Gramlich.
Free Digital Music Mikaylla Brown. Economics of the Music Industry An average user of free, ad- supported streaming services generates revenue of around.
How to Analyze Data? Aravinda Guntupalli. SPSS windows process Data window Variable view window Output window Chart editor window.
What is E-commerce Safety Precautions Password Strengths
A wholesaler sells to retailers, and a retailer sells to the final users. In addition to using the general ledger, a business keeps a subsidiary ledger.
The Edrington Group’s Approach To Market Research.
What is Retail Banking? Retail banking refers to banking in which banks transact directly with consumers. It aims to be the one-stop shop for as many.
Chapter 4 Statistics. 4.1 – What is Statistics? Definition Data are observed values of random variables. The field of statistics is a collection.
1 1 Slide Multiple Regression n Multiple Regression Model n Least Squares Method n Multiple Coefficient of Determination n Model Assumptions n Testing.
Chapter 6- Source Documents. Source Document (p. 165)  Is a business paper that shows the nature of a transaction.
Advertising. Why Advertise? To generate funds To give others information about products and services they want and will use To improve your advertiser’s.
Home. Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting A wholesaler sells to retailers, and a retailer sells to the.
Banking & Retail in the Digital Age Hiba Fayad Al-Iktissad #DGTLU.
Page 1 De-Brief to Executives, July 2009 Conducted by.
Accounting for Sales and Cash Receipts Making Accounting Relevant Sales of products or services generate revenue for a business. Making Accounting Relevant.
DOES CONTENT ORDER AFFECT PERFORMANCE ON MULTIPLE CHOICE EXAMS? Introduction 2.- Theory and hypotheses 3.- Methodology 4.- Results 5.- Conclusion.
HIIT p2p Survey Preliminary results Overview of the Study What kind of attitudes relate to the P2P usage and copyright legislation? How have different.
National Consumer Agency Back to School Costs July 2011 Market Research Conducted by.
Business Statistics for Managerial Decision Farideh Dehkordi-Vakil.
Capitalism and Free Enterprise. What is capitalism? The United States’economic system in which private citizens own & use the factors of production to.
Improving Relationships with Financial Institutions: Evidence on the Effectiveness of Financial Education from a “Second Chance” Program Rebecca Haynes.
Online Auction b 資管一 JOSEPHINE 周家裕. INTRODUCTION . NOWADAYS, ONLINE AUCTION IS VERY POPULAR . THE MOST FAMOUS AND LARGEST ONLINE AUCTION COMPANY.
1 ICOM 5016 – Introduction to Database System Project # 1 Dr. Manuel Rodriguez-Martinez Department of Electrical and Computer Engineering University of.
SPSS Workshop Day 2 – Data Analysis. Outline Descriptive Statistics Types of data Graphical Summaries –For Categorical Variables –For Quantitative Variables.
LESSON 9-1 Journalizing Purchases Using a Purchases Journal
Group iTunes How To Buy Songs From iTunes Presented by: Rachel Jewell, Angela Anderson, Carly Fitzpatrick, Anthony Kelhower, and Eric Tindall.
Section 3Analyzing Cash Receipt Transactions What You’ll Learn  How to record cash receipt transactions.  The use of the Sales Discounts account, and.
Notes Unit 1 Chapters 2-5 Univariate Data. Statistics is the science of data. A set of data includes information about individuals. This information is.
Price vs. Length : How Much Are You Getting For Your Money? Goal: To compare runtime of a CD to it’s cost to see if there was a connection between how.
The Effect of Music Piracy on CDs Purchases Siwat Auampradit.
Primary Research Report By Jude Abbey. Conducting primary research Using a questionnaire i originally created, i have been able to collate information.
Measures of Center & Spread. Measures of Center.
Mr. J. Fletcher ENT 12. Putting the right product in the right place, at the right price, at the right time.
Managing Revenue Chapter 2. PAGE REF #CHAPTER 2: Managing Revenue SLIDE # 2 Objectives Set up customer records in the Customer:Job list Record Sales Receipts.
Digital Entertainment – Consumers’ Perspectives on Digital Rights Management (DRM) A Jupiter Multiclient Report Peter Sargent
Ass. Prof. Dr. Özgür KÖKALAN İstanbul Sabahattin Zaim University.
Chapter 1 – Stats start here. What is Statistics and data? Statistics: Data:
UK 2013 Mobile Phone Recycling Trend 1888 PressRelease - Behaviours, Attitudes and Concerns of UK Residents in Regard to Used Mobile Phones. The following.
DEMAND FORECASTING & MARKET SEGMENTATION. Why demand forecasting?  Planning and scheduling production  Acquiring inputs  Making provision for finances.
Online Shopping: Research Paper Eimear Greene. My Objectives Why People shop online How Online retail has changed What category of product do people shop.
Department of Applied English (International Business) Ming-Chuan University, April 10, 2010.
2018 Presenter Consortium for Jazz
Payment Instruments, Financial Privacy and Online Purchases
2019 Presenter Consortium for Jazz
Sample Radiohead: Music at Your Own Price
Introduction to Regression
Quick Guide for Online Ordering
Presentation transcript:

Why Do Consumers Pay Voluntarily? Evidence from Online Music - T. Regner and J. Barria Why Do Consumers Pay Voluntarily? Evidence from Online Music Tobias Regner and Javier A. Barria This work was partially supported by the EU-funded projects TIRAMISU (IST ) and DANAE (IST ). We are grateful to Maija Halonen-Akatwijuka and Osiris Parcero for valuable comments. Finally, John Buckman has been essential for this paper as he provided the Magnatune data.

Why Do Consumers Pay Voluntarily? Evidence from Online Music - T. Regner and J. Barria Why Do Consumers Pay Voluntarily? Evidence from Online Music Analysis of payment behaviour –Alternative online music label: Magnatune –Customers choose price for an album from a given range –How much do they pay, what makes them pay more? Do consumers pay voluntarily? –Large data set obtained from Magnatune –Field study instead of data from lab experiments –Quantitative analysis Why do consumers pay voluntarily? –Online survey of frequent Magnatune customers –Qualitative/quantitative analysis –What is the underlying motivation for paying more than necessary?

Why Do Consumers Pay Voluntarily? Evidence from Online Music - T. Regner and J. Barria Niche music label with 200 artists –Slogan: We're a record label. But we're not evil. –Revenues are evenly split between artist and Magnatune Various genres, relatively unknown artists no Digital Rights Management –Music files are unprotected –File quality and format is up to customer (MP3, WAV,..) Comprehensive pre-purchase access –Free and unlimited streaming as well as online radio service Not just 30 second snippets –Free sampling of experience goods facilitates discovery of music Variable pricing –Customers are free to pay what they want –Price range from $5 to $18 –Recommended price/default value: $8 Magnatune: Music Label and Online Store

Why Do Consumers Pay Voluntarily? Evidence from Online Music - T. Regner and J. Barria Data Set Sales numbers of the music label Magnatune 14,367 observations in total Data from September 2003 to January ,620 different customers Majority (4,986) purchased just one album Most albums bought by a customer: 49 On average customers bought 1.86 albums No reputation effects possible

Why Do Consumers Pay Voluntarily? Evidence from Online Music - T. Regner and J. Barria Customer/artist ID Payment Date and time of purchase Dummies –Gender –Download or CD – left or not –Means of payment (credit card, PayPal) –Country –Music genre Total amount of purchases of customer Number of a respective purchase of a customer Data Set (2)

Why Do Consumers Pay Voluntarily? Evidence from Online Music - T. Regner and J. Barria Descriptive Stats

Why Do Consumers Pay Voluntarily? Evidence from Online Music - T. Regner and J. Barria Payment over Countries

Why Do Consumers Pay Voluntarily? Evidence from Online Music - T. Regner and J. Barria Summary of Results Payment –Only 2,081 purchases (or 14.5%) were at the minimum of $5 –Average payment for an album is $8.20 –First payment of customers averages $8.36, 2 nd payment averages $8.21 Regression results (significant at (at least) 5%-level) –Anonymous customers tend to pay less –CD buyers tend to pay more –No difference between male and female customers –No country effects after accounting for GDP differences Types of consumers –Clustering of the observed transactions based on previous payment minimum, default, high (>$12) payment –$5 previous payment, average payment : $5.49 –$8 previous payment, average payment: $8.01 – > $12 previous payment, average payment: $12.29 –Payments type-dependent, subject-specific α

Why Do Consumers Pay Voluntarily? Evidence from Online Music - T. Regner and J. Barria Payment Patterns of 32 Customers with 15+ Transactions Default (with deviations): 20 consumers (quasi-) minimum: 4 >AVG: 5 Other patterns (decreasing payment): 3

Why Do Consumers Pay Voluntarily? Evidence from Online Music - T. Regner and J. Barria Magnatune customers with at least 10 transactions Anonymous participation 236 responses out of 520 invitations sent out Seven open-ended questions –Benefits of purchasing music at Magnatune –Own payment (less, around above recommended price) and reasons for it –Estimate of customers’ average payments at Magnatune and reasons Eleven multiple choice background questions –Gender –Age –Country –Personal income –Educational background –Actively making music –Donations to charity –Own consideration of others’ decisions/opinions –"It is important to me what others think of me." –Reciprocity (positive/negative) Online Survey

Why Do Consumers Pay Voluntarily? Evidence from Online Music - T. Regner and J. Barria Clustering of textual responses into categories –Magnatune specific - technical45.26% –Support of the artist44.83% –Magnatune specific - idea/business41.81% –Magnatune specific - music30.17% –No DRM 29.74% –“Try before buy"21.98% –Online music general9.05% –Guilt2.16% Probit regressions –Dependant variable: Own payment less/around/above recommended price –Explanatory variables Category entries Survey scores (reciprocity, “own consideration”, “importance of others opinion”,..) Gender, country, income, age, education, “actively making music”, “donations” Qualitative/quantitative analysis

Why Do Consumers Pay Voluntarily? Evidence from Online Music - T. Regner and J. Barria Own payment is less/around/above recommended price … –Less13.6% (32) –Around59,7% (141) –Above26.7% (63) Regression results (***=1%, **=5%, *=10%) –Own payment is above recommended price explained by Score of positive reciprocity ** “Try before buy“** Middle income regions*** R²=0.26 –Own payment is around recommended price explained by Own consideration of others’ decisions/opinions* R²=0.14 –Own payment is below recommended price explained by Low income regions*** Magnatune specific – technical** R²=0.32 Key Preliminary Results

Why Do Consumers Pay Voluntarily? Evidence from Online Music - T. Regner and J. Barria Consumers pay voluntarily at Magnatune –Average payment $8.20 –Only 14.5% of purchases were at the minimum of $5 –Payments appear to be type-dependant Why do they pay voluntarily? –Preliminary evidence that positive reciprocity drives behaviour Kind behaviour by Magnatune (free streaming etc.) Score of positive reciprocity significant at 5%-level “Try before buy“ category significant at 5%-level –Own consideration of others’ decisions/opinions Score affects “around”-payments at 10%-level –Income –No significant effects for gender, education, “actively making music”, “donations”, “guilt”, “fairness” Conclusions