Article Preview
Top1. Introduction
The advent of MP3 files, wider bandwidths, and P2P technology have resulted in new opportunities for the distribution of music over the Internet. IFPI’s (International Federation of the Phonographic Industry) Digital Music Report 2011 states that the global digital music sales in 2010 reached $4.6 billion, up roughly 10 percent in monetary value from 2009. In addition, digital channels now account for an estimated 29 per cent of record companies’ revenues, compared with 25 per cent in 2009 (IFPI, 2011).
Music is a hedonic product, fulfilling experiential needs, feelings, or pleasure which is decided subjectively (Babin, Darden, & Griffin, 1994). To help prospects evaluate music over the Internet, many music retailers like Amazon.com and Buy.com use two tools, 1) online product sampling, i.e., releasing samples of their music products via the Internet to consumers, and 2) online customer reviews, i.e., posting consumer-generated comments on music products online. Product sampling is an important marketing strategy for experience goods like music. Only after consumers have really experienced the product, will they know its real value. Online product reviews become popular in recent years as more consumers count past users’ experience into their purchase decisions. Online product sampling for digital goods like digital music has some advantages over physical products. For example, digital product samples can be created at almost zero marginal cost and be distributed instantly around the world via the Internet. BizRate conducted a survey on consumer attitudes towards online product reviews, in which it found among 5,500 online consumers, 44% of them said they had checked online product review sites before making a purchase, and 59% of them thought that online product reviews are more valuable than expert reviews (Piller, 1999). For certain product such as electronics, online consumer product reviews have greater impact on consumer behavior than any other media. Online product reviews have some advantage over word of mouth: they can be permanently available and be distributed instantly around the world via the Internet. Through multiple exchanges, online product reviews can reach and potentially influence many reviewers (Lau & Ng, 2001).
To better utilize online digital music sampling and online customer reviews for music product sales, it is necessary to investigate music consumer behavior and understand how they evaluate online digital music. The understanding of the digital music consumer behavior and the critical factors for online digital music evaluation will help music retailers design and adopt optimal online digital music promotion strategies. This study explores this untapped area in the literature by addressing the following questions: What are the current profiles of music consumers in the presence of online digital music? How do consumers behave with online digital music sampling and online product reviews for music product evaluation? What factors determine music evaluation during digital music sampling? How to utilize online digital music sampling and online reviews in electronic commerce?
In this study, we investigate the profiles of music consumers in the presence of the Internet, and explore online product sampling along with online reviews. We find most people use free radio as their main music source, and digital music piracy is still a big problem for the music industry. We also find consumers still depend on traditional word of mouth for their music evaluation. The two online music evaluation channels, i.e., online sampling and online reviews, do not play more important roles than some of other channels to many consumers in their purchase decisions. In addition, online sampling plays a more important role than online reviews to many consumers. We also investigate post-sampling results including 1) the music evaluation, 2) willingness to pay (WTP), 3) free rider, 4) enjoyable sampling process, 5) perceived usefulness of online sampling, 6) knowing the true music value, 7) further reading online reviews, 8) using other music evaluation channels, and 9) writing product reviews after sampling. We do not find significant differences in these post-sampling results between people not knowing the artists and people knowing the artists. We do find the longer sample has a higher WTP, leads to more confidence in knowing the music true value, but more likely incurs a free rider problem. We also conduct coefficient correlation analysis for post-sampling results and offer its managerial interpretations.