Staff at Department of Food and Resource Economics – University of Copenhagen

English > Staff

Selling digital music: business models for public goods

Research output: Working paper

Documents

  • DP 09-19

    Final published version, 210 KB, PDF-document

Jens Leth Hougaard, Mich Tvede

This paper considers the market for digital music. We claim that the combination of the MP3 format and peer-to-peer networks has made music non-excludable and this feature is essential for the understanding of the economics of the music market. We study optimal business models for selling non-excludable goods and show that despite promising theoretical results, adding just a slight uncertainty about the number of customers has significant negative implications for profitability. Indeed, as the average number of customers tends to infinity the average payment per customer converges to zero. Therefore, the music industry should concentrate on alternative ways of creating profit such as selling access to listeners, concerts, merchandise, ringtones etc.
Original languageEnglish
PublisherDepartment of Economics, University of Copenhagen
Number of pages23
StatePublished - 2009

Number of downloads are based on statistics from Google Scholar and www.ku.dk


No data available

ID: 14490979