article

Consumer Search and Retailer Strategies in the Presence of Online Music Sharing

Authors:

Sudip Bhattacharjee,

Kaveepan Lertwachara,

James MarsdenAuthors Info & Claims

Journal of Management Information Systems, Volume 23, Issue 1

Pages 129 - 159

Published: 01 June 2006 Publication History

Abstract

Advances in online technologies and bandwidth availability have opened new vistas for online distribution of digital goods, but potential benefits for consumers are juxtaposed against challenges for retailers. Here, we investigate one type of digital experience good-music-whose market environment includes the very real presence of online piracy. Although arguments abound for and against online distribution of such digital goods, little research exists in this area. We develop a model of consumer search for such an experience good, and study different emerging market environments for retailers, where consumers can pirate music online. Retailer cost to publishers is modeled using a variety of licensing schemas. Survey results, together with data from online sharing networks, are utilized to validate a key assumption. Finally, computational analysis is used to develop insights that cannot be obtained analytically. Our results indicate that decreasing piracy is not necessarily equivalent to increasing profit, and online selling strategies can provide additional profits for a traditional retailer even in the presence of piracy. We show that leading strategies for business in such goods should include pricing options, provision of efficient search tools, and new licensing structures.

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cover image Journal of Management Information Systems

Journal of Management Information Systems Volume 23, Issue 1

Number 1 / Summer 2006

316 pages

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Publisher

M. E. Sharpe, Inc.

United States

Publication History

Published: 01 June 2006

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https://dl.acm.org/doi/10.4018/JGIM.2020100106
Wu DNan GLi M(2020)Optimal Piracy Control: Should a Firm Implement Digital Rights Management?Information Systems Frontiers10.1007/s10796-019-09907-z22:4(947-960)Online publication date: 1-Aug-2020
https://dl.acm.org/doi/10.1007/s10796-019-09907-z
Shemroske KSilva L(2015)Mechanisms for Understanding Participation in Online File SharingInternational Journal of Information Communication Technologies and Human Development10.5555/2756413.27564157:1(17-36)Online publication date: 1-Jan-2015
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Yang ZWang J(2015)Differential effects of social influence sources on self-reported music piracyDecision Support Systems10.1016/j.dss.2014.11.00769:C(70-81)Online publication date: 1-Jan-2015
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Jeong BKhouja M(2013)Analysis of the effectiveness of preventive and deterrent piracy control strategiesComputers in Human Behavior10.1016/j.chb.2013.07.02929:6(2744-2755)Online publication date: 1-Nov-2013
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