Why Pay When You Can Get It For Free? A quantitative study of the competition on the web-based music market in Sweden

Abstract (Swedish)

SVENSK SAMMANFATTNING
Titel: Why Pay When You Can Get It For Free? A quantitative study of the web-based music industry

Seminariedatum: 4 juni 2014

Kurs: FEKH19 Kandidatkurs i Strategic Management, 15 Hp

Författare: Erika Fredriksson, Louise Klintner, Evelina Wennerberg

Handledare: Christine Blomquist

Nyckelord: Web-based music services, Buyer switching costs, Sampling, Willingness to pay, Versioning, Bundling, Consumer surplus, Network effects

Syfte: Syftet med denna studie är att undersöka konkurrensen på den webbaserade musikmarknaden i Sverige.

Metod: Undersökningen består av en kvantitativ studie baserad på empirisk data som vi samlat in via enkäter online. Enkäten består av maximalt 17 frågor, som är skrivna baserade på relevanta teorier. Vår data analyserades med hjälp av det statistiska programmet SPSS, med syfte att testa våra tre hypoteser.

Teoretiska perspektiv: En intressant paradox angående konsumtion av webbaserad musik är att det verkar som att konsumenter oberoende av ålder och inkomstnivå väljer att betala för webbaserad musik, trots att musiken finns tillgänglig kostnadsfritt på marknaden. Det finns många teorier i ämnet om konkurrens på en sådan marknad. Samtidigt som vissa forskare påstår att konkurrens kan förklaras genom traditionella teorier, argumenterar andra att detta är en marknad där nya affärsmodeller bör utvecklas. Några återkommande begrepp i dessa teorier är t.ex. buyer switching costs, betalningsvilja för musik samt huruvida de webbaserade musiktjänsterna associeras med nätverkseffekter. Dessa koncept ligger som teoretisk grund för detta arbete.

Empiri: Vår population består av personer mellan åldrarna 18-29 år som bor i Sverige och använder minst en webbaserad musiktjänst. Vi räknade ut vår urvalsstorlek på 271 personer med en 90 % konfidensnivå med en felmarginal på 5 %. Enkäten distribuerades via Facebook, och vi fick till slut 263 svar.

Sammanfattning: Denna studie ska ses som en pilotstudie, och vi ämnar inte generalisera på hela vår population. Vår empiriska data som testas mot våra hypoteser, kan indikera att konkurrensen på den webbaserade musikmarknaden i Sverige inte är baserad enbart på pris, utan snarare på andra faktorer som konsumentnytta trots att musik finns att tillgå i princip gratis.

Abstract

ABSTRACT IN ENGLISH

Title: Why Pay When You Can Get It For Free? A quantitative study of the web-based music industry

Seminar date: 4 of June, 2014

Topic/Course: FEKH19 Bachelors Thesis in Strategic Management, 15 University Credits Points (UPC) or ECTS-credits)

Authors: Erika Fredriksson, Louise Klintner, Evelina Wennerberg

Advisor: Christine Blomquist

Key words: Web-based music services, Buyer switching costs, Sampling, Willingness to pay, Versioning, Bundling, Consumer surplus, Network effects

Purpose: The purpose of this study is to investigate the competition on the web-based music market in Sweden.

Methodology: The research consists of a quantitative study based on empirical data collected through electronically distributed surveys. The survey consists of a maximum of 17 questions (the survey varied in length depending on what the respondent answered), which were written based on theories relevant to the purpose. The data was analyzed through the use of the statistical program SPSS with the aim of testing three hypotheses.

Theoretical perspectives: An interesting paradox when discussing web-based music consumption is that regardless of age and income levels, consumers seem to pay for web-based music despite having the ability to access it on the market virtually for free. Researchers have developed many theories on the matter of what competition could look like on such a market. Whilst some researchers claim that the competition can be explained through traditional theories, others argue that this is a market for which new business models need to be developed. A few reoccurring concepts which arise in these theories are the buyer switching costs associated with the music services, the consumers’ willingness to pay for the music and whether or not web-based music services display network effects. These concepts lay the theoretical grounds for this paper.

Empirical foundation: Our population consists of people between the ages of 18-29 years who live in Sweden and use at least one web-based music service. We calculated an adequate sample size of 271 people, with a confidence level of 90 % and a margin of error of 5 %. The survey was distributed through the use of Facebook, and ultimately 263 usable responses were collected.

Conclusions: The study is to be regarded as a pilot study, and we do not aim to generalize our results upon our entire population. The empirical data we have used to test our hypotheses points toward that competition on the Swedish web-based music market is not based on price alone, but rather on other factors, such as benefit, despite music being accessible virtually for free.

• author: Fredriksson, Erika ; Klintner, Louise and Wennerberg, Evelina
• supervisor: Christine Blomquist
• organization: Department of Business Administration
• course: FEKH19 20141
• year: 2014
• type: M2 - Bachelor Degree
• subject: Business and Economics
• keywords: Strategic Management, Web-based music services, Buyer switching costs, Sampling, Willingness to pay, Versioning, Bundling, Consumer surplus, Network effects
• language: English
• id: 4500522
• date added to LUP: 2014-07-02 15:08:41
• date last changed: 2014-07-02 15:08:41