From Ownership to Access: The Implications of Streaming Digital Content on Consumers, Sellers, and Artists

Summary

Online streaming—a business strategy of renting rather than selling a bundle of products—has become a dominant form of distribution in multiple industries, such as music, movies, books, and software. However, academic research remains scarce. The goal of this research program is to investigate how the transition from ownership to streaming impacts demand for, and the supply of, digital content. Using data from the music industry, this proposal advances three parts formulated as interlinked projects.
Projects 1 and 2 investigate the adoption of online streaming on consumed variety and taste. Specifically, project 1 asks whether consumers that adopt a streaming service will start listening to more of the same content than other users (i.e., homogeneous tastes), or rather less of the same content (i.e., more fragmented tastes). For example, recommendation engines may push individual users to new content, but potentially to the same new content across users. In project 2, I explore the implications of adopting online streaming on consumer preference for global versus local content. For example, globally programmed playlists may make consumers more likely to prefer global content; alternatively, as the price of consuming extra variety is virtually zero on streaming services, consumers may search deeper and discover nearby (local) content.
Finally, project 3 investigates how streaming affects the supply of new music. Streaming generates revenues over extended consumption histories, instead of once at the moment of purchase. This may affect artists’ production incentives (e.g., decelerating production in some genres), and release schedules (e.g., withholding content for some consumers). The results of the studies will be insightful for consumer welfare, content providers, platforms, and public policy makers.

Details

Project number

451-17-028

Main applicant

Dr. H. Datta

Affiliated with

Tilburg University, Tilburg School of Economics and Management (TiSEM), Marketing

Team members

Dr. H. Datta

Duration

22/01/2018 to 31/08/2020