TY - JOUR
T1 - Accepting or Fighting Unlicensed Usage
T2 - Can Firms Reduce Unlicensed Usage by Optimizing Their Timing and Pricing Strategies?
AU - Burmester, Alexa B.
AU - Eggers, Felix
AU - Clement, Michel
AU - Prostka, Tim
PY - 2016/6
Y1 - 2016/6
N2 - The rise of the Internet and new online services have led to the wide-scale illegal distribution of digital entertainment products, such as music, movies, games, and books. We analyze whether firms in the entertainment industry should fight unlicensed usage by providing specific offers that maximize the utility for segments relying on unlicensed usage, i.e., by optimizing timing and pricing strategies, or whether they should simply accept a certain level of unlicensed usage. We combine Becker's (1968) economic approach to analyzing social issues with random utility theory to develop a choice model for media products in which we account for unlicensed usage. We then apply the model in two large-scale empirical studies on movies and books. The results show that consumers who prefer unlicensed usage are sensitive to the marketing mix to some extent in both markets. However, optimizing timing and pricing only has limited impact on additional revenue generation. Thus, from a managerial perspective, it is very difficult to reduce the relative loss due to unlicensed usage by providing targeted offers. (C) 2015 Elsevier B.V. All rights reserved.
AB - The rise of the Internet and new online services have led to the wide-scale illegal distribution of digital entertainment products, such as music, movies, games, and books. We analyze whether firms in the entertainment industry should fight unlicensed usage by providing specific offers that maximize the utility for segments relying on unlicensed usage, i.e., by optimizing timing and pricing strategies, or whether they should simply accept a certain level of unlicensed usage. We combine Becker's (1968) economic approach to analyzing social issues with random utility theory to develop a choice model for media products in which we account for unlicensed usage. We then apply the model in two large-scale empirical studies on movies and books. The results show that consumers who prefer unlicensed usage are sensitive to the marketing mix to some extent in both markets. However, optimizing timing and pricing only has limited impact on additional revenue generation. Thus, from a managerial perspective, it is very difficult to reduce the relative loss due to unlicensed usage by providing targeted offers. (C) 2015 Elsevier B.V. All rights reserved.
KW - Digital media
KW - Sequential distribution
KW - Piracy
KW - Unlicensed usage
KW - Optimization
KW - Digital media
KW - Sequential distribution
KW - Piracy
KW - Unlicensed usage
KW - Optimization
U2 - 10.1016/j.ijresmar.2015.06.005
DO - 10.1016/j.ijresmar.2015.06.005
M3 - Journal article
SN - 0167-8116
VL - 33
SP - 343
EP - 356
JO - International Journal of Research in Marketing
JF - International Journal of Research in Marketing
IS - 2
ER -