Trade-offs impacting consumer decision quality in the context of digital music platforms

Abstract

The growth of music piracy is threatening the sustainability of the music industry in general. The major theme of the research is exploring how price versus fit and other relevant trade-offs impact online consumer decision-making. The aim is to improve understanding in how to attract consumers to legal digital music platforms to create revenue sustainably at prices consumers are willing to pay. Music as an information good has high sunk and low marginal costs. Moreover there are a plethora of consumer access options, from streaming to downloading content in both free and paid for platforms. The focus was to create and test a model built on Punj s recent but untested online decision-making model within the context of music as digital information good. It attempted to improve understanding around trade-offs impacting consumer s decision quality for acquisition of digital music. Thus the end result should improve monetisation of legal digital music distribution. Through a qualitative, explorative research design of face to face interviews with ten digital music consumers and nine music industry experts in South Africa various perspectives and opinions were scrutinised. By comparing trade-offs and factors such as economic price, search costs, product knowledge and perceived risks across downloading and streaming consumers as well as experts new insights emerged. Findings reflected that Punj s model does not hold with regards to price versus benefit and search versus price trade-offs in the context of digital music. Various trade-offs during consumer decision making in this environment are presented. A potential disconnect between consumer perspectives and expert opinions emerged, which imply a substantial lack in consumer centricity. Suggestions on attracting consumers to support legal platforms based on what consumers truly value, concluded the research.