Strategies for Digital Music Markets: Pricing and the Effectiveness of Measures against Pirate Copies - Results of an Empirical Study

The recording industry is still facing a global decline in revenues and record sales. Paid music services have failed to deliver on their promise of a full-catalog shopping experience so far, and filesharing platforms are still widely used for obtaining online music. In this context we conducted an empirical study via the Internet with 2.260 participants. The main results are: Neither the installation of copy protection measures nor legal actions against users of file-sharing platforms seem to be appropriate means to increase sales of CDs and online music. Potential consumers’ willingness to pay is distinctly lower than the prices currently set by the available paid music services. Our study's results suggest that a price cut for music downloads would lead to increased sales, thus creating benefits for both suppliers and consumers.