Music CDs Research Articles

Thick markets, market competition and pricing dynamics: evidence from retailers

AbstractBy using store‐level transaction price data for books in Ann Arbor, Michigan, and music CDs in Natick, Massachusetts, the implications of thick markets and the intensity of market competition on price markups and the synchronization in price adjustments are empirically tested. The data indicate that for books, actual price markups are 6% lower than the suggested price markups, while for music CDs, they are 3.6% lower. Popular items are more heavily discounted than less popular ones. The data show that a 10% increase in national sales of a given book title results in a 0.06% drop in price markups. Also, market competition has a non‐linear depressing effect on price markups that becomes stronger for widely known popular items. Finally, a 10% increase in the number of sellers in the market lead to a 5.8% increase in the likelihood of a price adjustment and a 2.2% increase in the share of sellers that synchronize their price adjustments. Copyright © 2007 John Wiley & Sons, Ltd.

Commodity specific rates of temporal discounting: Does metabolic function underlie differences in rates of discounting?

Discounting rates vary as a function of commodity type. Previous studies suggest five potential characteristics of the commodity that could explain these differences: type of reinforcer (primary or secondary), if the commodity is perishable, if the commodity is satiable, if the commodity can be directly consumed, and immediacy of consumption. This paper suggests that these characteristics may best be viewed as related to a more fundamental characteristic: metabolic processing. In order to explore the possibility that metabolic processing underlies changes in discount rates, the difference in discounting between food, money, music CDs, DVDs, and books are compared. Music CDs, DVDs, and books share many characteristics in common with food, including gaining value through a physiological process, but are not directly metabolized. Results are consistent with previous findings of commodity specific discount rates and show that metabolic function plays a role in determining discount rates with those commodities that are metabolized being discounted at a higher rate. These results are interpreted as evidence that the discount rate for different commodities lies along a continuum with those that serve an exchange function rather than a direct function (money) anchoring the low end and those that serve a direct metabolic function capping the high end (food, alcohol, drugs).

Telling Themselves Who They Are: What One Out-of-School Time Study Revealed about Underachieving Readers

The purpose of this study was to explore whether or not adolescents who are deemed underachievers and who struggle to read school-assigned textbooks will engage with popular culture texts of their own choosing (e.g., magazines, comics, TV, video games, music CDs, graffiti, e-mail, and other Internet-mediated texts). The 60 student participants, who were enrolled in grades 7–9 in a small city school district in the southeastern U.S., self-identified mostly as not being interested in reading. Thirty attended weekly meetings of an out-of-school time media club and kept a daily out-of-school time activity log for 14 weeks (the intervention group); the other 30 were assigned to a comparison group and did not attend the weekly media club meetings but did keep a daily out-of-school time activity log for the same 14-week period. Independent t-tests applied to data from the daily activity logs revealed several interesting contrasts between the two groups. One unexpected finding was the relatively large amount of time that participants in both groups reported they spent reading outside of school.

The effect of familiar music on the perception of other individuals.

When individuals hear recognizable music, they are likely to perceive another person in the environment as more familiar-through a process of assimilation. This familiarity might promote trust and thus inhibit a systematic scrutiny of this person. To assess the effect of recognizable music on the perception and evaluation of other individuals, 87 participants received two hypothetical resumes that were submitted by job applicants. They evaluated the personality of these applicants and designated the candidate they believed was preferable. During this procedure, background music was presented, and this music was familiar to only a subset of participants. Participants who regarded the music as familiar were more likely to perceive the candidates as extraverted. These participants were also more likely to prefer the candidate who demonstrated superior expertise but submitted a less attractive resume, which suggests that familiar music promoted a systematic rather than superficial analysis. (ProQuest-CSA LLC: ... denotes obscured text omitted.) Music can dramatically influence the decisions, judgments, and behavior of individuals (e.g., Campbell. 1996; Hallam, Price, & Katsarou, 2002; Husain, Thompson, & Schellenberg, 2002; Pates, Karageorghis, Fryer, & Maynard, 2003; Sollberger, Reber, & Eckstein, 2003). For example, soothing music can promote compliance to the requests of salespersons (Chebat, Vaillant, & GelinasChebat, 2000). Indeed, in addition to mood, many features of music can impinge upon the cognition and behavior of individuals, including tempo, timbre, and style (see Bruner, 1990). Thus music is ubiquitous in electronic advertisements as well as other customer interfaces, such as retail stores and even websites. The music in these contexts is often an extract of a previous recording. Occasionally, however, this music is composed specifically for a campaign or organization. In other words, the extent to which the music is familiar can vary considerably. The effect of music familiarity on the information processing of individuals has, however, received scant attention (although see Rainey & Larsen, 2002). This study underscores some of the benefits and drawbacks that accrue when familiar, recognizable music is presented. Effect of Recognizable Music on the Perceived Familiarity of Other Individuals Although the relative merits of recognizable rather than novel music have not been explored comprehensively, a plethora of studies has revealed that familiarity of persons, objects, and contexts can affect the information processing of humans. Indeed, an object or person is typically perceived more favorably after a few exposures, even when this exposure is subliminal (e.g. Complon, Williamson, Murphy, & Heller, 2002; Harmon-Jones, 2001 ; Yamada, 2004; Zajonc, 1968). As a typical illustration, customers were more likely to comply with the requests of a salesperson they had encountered incidentally before, even if they were not aware of this encounter (Burger, Soroka, Gonzago, Murphy, & Somervell, 2001 ). Conceivably, objects or persons might seem familiar even if they have not been encountered before. For example, the context or environment potentially could bias the perceived familiarity of objects or persons. According to recent research, the perceived familiarity of one object, such as an extract of music, can determine the perceived familiarity of another object. In one study, for example, new music CDs that were promoted on a website were especially likely to be perceived as unfamiliar when this site also reviewed popular bands as well (Cooke, Sujan, Sujan, & Weitz, 2002). A corollary of this finding is that recognizable music could influence the perceived familiarity of persons in the environment. When individuals are exposed to music they have heard frequently before, persons in the environment might also seem more familiar, a bias called assimilation (e. …

Online Consumer Search Depth: Theories and New Findings

The continuous growth of e-commerce makes it critical for firms to understand consumers' search behavior so that e-commerce Web sites and the underlying information systems can be designed to better cater to consumers' needs. This paper extends the classic search model to analyze online consumer search behavior. The analytical results suggest how consumers' search depth is influenced by a variety of factors such as search cost, individual consumer difference, and product characteristics. Evidence is provided using clickstream data of online searches and purchases of music CDs, computer hardware, and airline tickets during the period from July 2002 to December 2002 collected by an Internet marketing company, ComScore Inc. Compared with the search depth reported in previous works, this study finds that consumers are searching more intensely before purchasing online. This reflects the evolution of Internet users and the growth of online retail business.

Music CD Purchase Decisions

The increasing ease and frequency of digital music piracy and the global nature of the music industry make it important to understand why consumers in different national markets purchase music CDs. Study 1 identified 5 factors underlying CD purchasing, noting these differences between British and Japanese participants. Study 2 investigated relationships between these 5 factors and individual‐difference variables. Compliance was unrelated to scores on the Friendship factor. Experience seeking and scores on the Re‐Experience the Music factor were correlated negatively. Scores on the Friendship factor and innovativeness were unrelated, although innovativeness and scores on the Need to Control and Be Involved With Music factor were positively associated with product, purchase decision, and consumption involvements. Implications for marketing and future research are discussed.

Unplugged: The Music Industry's Approach to Rolling Contracts on Music CDs

The recording industry has begun a shift in its distribution model of music media, transitioning from sales to licensing. Many CDs now come with digital rights management (DRM) in the form of software that, once installed on the end user's computer, enables the user to copy the music to their hard-drive while regulating its use. Recording companies are distributing these CDs with licenses. In order to enact such licensing contracts with end users, record companies started using End User License Agreements (EULA) similar to those used in the software industry, placed on the CD in the form of a rolling contract. The licensing contracts purport not only to control rights to the software on the disc, but they also affect the user's rights to the music itself. Upon accepting the terms of the EULA, the user, who may have enjoyed the music for years prior to discovering the license agreement, apparently loses rights to their use of the CD upon accepting the terms of the EULA. This article provides a three-step analysis of the legal enforceability of music CD licensing contracts: analysis of the legal enforceability of rolling contracts; analysis of the distribution models in the music industry; and an analysis of the merger of the two. The first portion follows the developmental cases in rolling contract theory and discusses the proposed provisions in UCITA for such contracts. The second portion traces the history of legal rights in the music industry including the exclusive rights, the First Sale Doctrine, and the Fair Use Defense. In the third portion, the author suggests that such licensing contracts are legally unenforceable for either want of consideration or failure to provide meaningful opportunity to assent. The article culminates with a recommendation for legislators to enact certain, relevant portions of UCITA and recommendations for the music industry about how to bring their licensing scheme within the aims and legality of contract law.

An Exploration of Rights Management Technologies Used in the Music Industry

In late October, 2005, a computer programmer discovered that Sony/BMG had been installing root kits on music CDs that rendered computers susceptible to viruses, prompted a warning from the Homeland Security Agency, resulted in lawsuits from several States Attorneys General, and eventually led to a recall of 4 million CDs. These cases mark the entry of Digital Rights Management into the courts system and legal parlance, inviting a thorough look at the history and possible consequences of Digital Rights Management systems. This article traces the history of rights management technologies starting with the player piano and the phonograph, through the era of Digital Audio Tapes and the Audio Home Recording Act, and culminating with discussions of the Super Audio CD, DVD-Audio, iTunes and modern technological protection measures used in the music industry. The article further discusses trends in music media distribution and suggests effects the music industry's issues with rights management technologies may yield for the movie, video, software, and publishing industries. Finally, this article provides a suggestion that would help preserve the rights of copyright holders and help encourage the growth of the intellectual property industries through a controlled, universal, and flexible Digital Rights Management System.

Mistrust-Based Digital Rights Management

The powerful shift in copying technology over the last thirty years has destabilized how we produce copies and the economic arrangements associated with prior technologies. These technological changes have created a broad shift in the ability to make copies moving control away from producers towards consumers. As a consequence, these technologies have altered the practical enforceability of the rights that law assigns to copyright owners. Digital rights management technologies are an effort to make meaningful the legal rights of copyright owners. DRM faces severe obstacles. For preexisting products like the music CD, it has proven to be very difficult to add DRM after the fact. CDs need to work in standard CD players, and the limits DRM. The firestorm over Sony BMG's effort to produce CDs subject to DRM suggests that we are unlikely to see meaningful DRM for music CDs soon. But we are switching how we deliver content from products to services. Music CDs and eventually DVDs will be replaced by online services such as Apple's iTunes and Google Video. Both of these come with DRM built-in and both rely on identity-based DRM. Identity-based DRM ties identity to content. Content can be shared widely, but absent access to identity, the content is worthless. This is a substantial step forward for DRM, but may still be a step short of where we need to be. Content purchasers still have no reason to protect purchased content. Identity-based DRM coupled with bounty tags will create an incentives wedge between content purchasers and stripping/p2p software and with peers in a p2p network. We should want a system where content purchasers are as careful with content as they would be with identity and mistrust-based DRM may be that system.

Scratching Out Authorship: Representations of the Electronic Music DJ at the Turn of the 21st Century

This article argues that the DJ is represented by the electronic music industry as the creative author of his or her music. I examine commercial discourse aimed at the consumer of DJ-mixed music, such as rave flyers and electronic music CDs, as well as discourse aimed at the DJ-consumer, such as trade magazines and gear catalogues. In all of this discourse, the DJ is presented as the culmination of creative musical technology, a musical author-god who carries on a long tradition of patriarchal authorship. In light of these observations, I argue that the DJ's authorship comes not from what he or she does but how those practices get represented in a capitalist system. Further, I argue that the industry instilled the DJ with authorship to fill a vacuum left by the increasing anonymity of dance music producers. The DJ becomes a tool for generating social capital within a music scene, and this social capital is turned into monetary capital via the sale of DJ-related commodities.

Antipiracy software opens door to electronic intruders

This paper discusses how Sony BMG made a big mistake in the production of hundreds of music CDs equipped with a copy protection software known as XCP. The concept of XCP was to block consumers from converting audio files to mp3's, as well as third-party sharing. The CD can be normally played in several audio players, but in the case of using it in a computer, XCP automatically prompts a specific music player to be installed together with a rootkit. The rootkit is designed to hide the existence of any file or folder whose name begins with $sys$. Through this concept, hackers can hide anything they want. Overall, Sony's aim of stopping piracy was a complete failure. However, Sony came up with a complex multistep process to uninstall the rootkit and unfortunately stopped the production of XCP-protected CDs.

Violations of Exhibiting and FDA Rules at an American Psychiatric Association Annual Meeting

We conducted a cross-sectional study of all exhibit booths for the 24 pharmaceutical companies at the 2002 American Psychiatric Association (APA) convention. We collected and categorized one of each item distributed by the companies at each booth. A total of 268 items were collected from 24 companies (median=8). The most common categories of items were "reprints or pamphlets" (37%) and "noneducational gifts" (27%), including music CDs and invitations to dinners and museums. There were a total of 16 violations of the APA's own exhibit rules: eight companies had one violation and two companies had four violations. Four companies engaged in FDA-prohibited off-label promotion; one also violated the APA code. Over half of all companies (54%) were in violation of either APA rules or FDA regulations. The APA's voluntary code has failed to adequately reduce inappropriate promotional activity at the annual APA meeting.

Pedagogy of the Obsessed

The author examines his obsession with a variety of media culture texts—films, television programs, visual ads in magazines and on billboards, music CDs, comic books, video games, websites—an obsession that manifests itself most pervasively in collecting “video texts.” Among the over 1,000 video texts collected are more than 100 school films, many of which were used for various critical pedagogical projects designed around selected media texts. The author explains how his use of these video texts was radically transformed when he began using selected segments from a wide range of them to create “videocompilations” and “videocollages.” He argues that even though we live in a media‐saturated society (a typically negative phrase within media‐literacy discourses), there exist many opportunities for educators to use media texts for productive pedagogical purposes.

Peace, Order, and Good Songs: Popular Music and English–Canadian Culture

Industry sales statistics demonstrate the extent to which popular music permeates Canadian life. According to the International Federation for the Phonographic Industry, Canada is the sixth largest market for recorded music sales. (1) Figures from the Canadian Recording Industry Association (whose members sell 95 percent of recordings sold in Canada) show that in 2003 about 50 million music CDs and cassettes were sold in Canada. (2) Scholars have long pondered the impact of the musical and lyrical content of popular music on people's political beliefs and activities. Survey research, (3) lyrical analysis, and musician interviews, (4) as well as experimental designs (5) have been used to determine the impact of music on people's ideas and actions. The research presented here contributes to burgeoning area of scholarship by examining the place of popular music lyrics within the definition of culture. Next it examines the lyrics of a major Canadian band whose songs have been rife with images and ideas of Canada. By examining the ideas and images presented to Canadians by important band research shows the role musicians may play in the creation and re-creation of and points toward a rich array of popular musicians whose work may be similarly important and worthy of investigation. Symbols and Themes in Canadian Popular Music What do we mean by the term culture? First and foremost, culture is not static. People change culture by interpreting and reinterpreting it, so it is difficult to say precisely and definitively at any moment, this is exactly what we mean when we say the political culture of English-speaking Canadians. Paul Nesbitt-Larking puts it well when he writes culture, including political is a broad, diffuse, and vague set of beliefs, emotions, values, preferences, and ideals. It provides a kind of 'tool kit' with which to reflect, communicate, and evaluate experience. (6) Ann Swidler defines culture as vehicles of meaning, including beliefs, rituals, practices, art forms, and ceremonies, as well as informal cultural practices such as language, gossip, stories, and rituals of daily life (p. 273). It seems there are as many definitions of culture as there are scholars interested in the concept, but a complete discussion of all the variants need not detain us. For the purposes of research, culture may be thought of as a collection of symbols whose meanings are constantly being reinterpreted. As carriers of symbolic meaning, the lyrics of popular music constitute an important element of culture. (7) Barclay, Jack, and Schneider argue that the years between 1985 and 1995 represent a golden age in Canadian popular music, in part centered around the bands that got their start in the clubs of Queen Street in Toronto. (8) This period begins roughly at the same time as the funding by the federal government of the Sound Recording Development Program in 1986. The program gave out $81 million between 1986 and 2000 to encourage production of Canadian music recordings. (9) The program was replaced in 2001 with the Canadian Sound Recording Policy. (10) Moreover, by the beginning of period Canadian content requirements had been in place on radio for nearly fifteen years. (11) Blue Rodeo, Cowboy Junkies, and The Tragically Hip are three of the most famous bands mentioned by the authors as leading the scene. Barclay, Jack, and Schneider quote former Blue Rodeo and Cowboy Junkies multi-instrumentalist Kim Deschamps on the positive changes in the music industry in Canada since the 1970s: Historically, in the era of Neil (Young) and Joni (Mitchell) there was no industry here. There was no possibility of making a living, and they all followed the (Gordon) Lightfoot example: release in the U.S., become a force down there, and then the Canadian public will take you seriously. That's less the case now, but it's still a factor . …

A Test of the Revenue Equivalence Theorem using Field Experiments on eBay

We conducted 80 auctions on eBay. Forty of these auctions were for various popular music CDs while the remain ing 40 auctions were for video games for Microsoft’s Xbox gaming console. The revenue equivalence theorem states that any auction form having the same effective reserve price yields the same expected revenue. The effective reserve price on eBay consists of three components: the opening bid amount, the secret reserve amount, and the shipping and handling charge. We set no secret reserve price and varied the opening bid and the shipping and handling charge to keep the overall reserve level fixed. When the effective reserve was $4, auctions with a low opening bid and high shipping charges attracted more bidders, earlier bidding, and yielded higher revenue than those with a high opening bid and low shipping charges. The same results holds only for Xbox games under the $8 effective reserve. Unlike the other treatments, where the reserve represents less than 30% of the retail price of the item, for CDs, the $8 effective reserve represents over 50% of the retail price of the item. In this treatment, we find no systematic difference in the number of bidders attracted to the auction or revenues as a function of how the effective reserve is allocated between opening bid and shipping charges. We show that these results can be accounted for by boundedly rational bidding behavior.

Pitfalls in Measuring the Impact of File-sharing on the Sound Recording Market

This paper surveys the extant literature on the impact of file -sharing on the recording industry. It begins by examining the theory behind the impact of file-sharing. One novelty from this analysis is the finding that the effect of 'sampling' of copyrighted materials can be expected to have a negative impact on copyright owners, quite the opposite of the impact normally assumed. Overall, although one can create hypothet i- cal situations where network effects might allow file-sharing to be beneficial to cop y- right owners, the expectation that file-sharing would harm copyright owners appears a far more realistic outcome. The analysis then turns to the empirical work that has been performed up to the time this paper was written. The various approaches are critiqued and compared. I posit some explanations for the variations in results and conclude that the evidence strongly suggests that file-sharing harms the sound recording industry. (JEL K0, L0, L5, L8) The sales of music CDs have fallen dramatically in the last few years. A leading candidate among possible causes of this decline is the recent rise in file-sharing. The recording industry has tried to stem this decline by suing or threatening to sue individuals heavily engaged in file sharing. These law suits have attracted a good deal of publicity and discussion. A rather influential school of thought has formed in opposition to the corporate players in thes e industries, and these lawsuits have provided fodder for their critiques of traditional copyright . 1 The motion picture industry has expressed concerns that it s sales are likely to suffer a similar fate to that of the sound recording industry if nothing is done to stem the unrestricted use of file-sharing software. Owners of advertising-based

Delay discounting determines delivery fees in an e‐commerce simulation: A behavioral economic perspective

AbstractParticipants ordered music CDs and bargained for delivery time and fees in a simulated on‐line store. After ordering a CD, participants engaged in a delivery‐fee bargaining task that was embedded in a psychophysical up–down staircase titration procedure in which options of next‐day delivery for a fee and delayed free delivery were made more or less attractive based on previous choices. A hyperbolic function derived from the matching law fit the data. These results are consistent with a behavioral‐economic account of intertemporal choice in which delivery fees are seen as a swap of money for time. © 2005 Wiley Periodicals, Inc.

Prysverlagings op voorraad met ’n dalende vraag

Opsomming Hierdie artikel stel 'n heuristiese benadering voor om die verliese op voorraad met 'n dalende vraag en onbekende tydshorison te minimeer. Die twee metodes wat voorgestel word, gebruik 'n benaderde vraagkromme om die verwagte verliese te voorspel. Albei heuristieke gebruik hierdie vooruitskatting om te bepaal wanneer die prys van items in voorraad afgemerk moet word ten einde verkope te versnel om verliese te vermy wat as gevolg van lang omsettye ontstaan. 'n Gevallestudie wat die werklike data van 'n CD-winkel simuleer, word gebruik om die twee heuristieke se prestasie relatief tot die huidige afmerkstrategie van die bestuur te meet. Abstract The problem faced in this paper is a periodic pricing of inventory with obsolescence and an unknown time horizon. Typical inventory items with these properties are music CDs. The periodic pricing of music CDs is used as a tool to manipulate the demand thereof as they become less popular. A CD will, however, not perish in the time it is kept as inventory, as is the case with perishable inventory. This property accounts for the obsolescence. Other kinds of items in inventory that also become obsolete are typical fashion goods, like clothes. Contrary to CDs the demand for these goods do have a known time horizon (usually at the end of a season). The paper starts out by giving an introduction to the problems faced in a CD shop. Back- ground information is given on how CD shops operate. The method of pricing CDs is ex- plained. The current policy at a CD shop of when, and how many orders are placed is explained. This introduction is followed by an overview of relevant literature on various types of inventory problems. The review is structured according to the three properties of the problem. The first property is the pricing of items in inventory. The second property is that items in inventory may be considered as inventory with a random lifetime. The third property is that the items in inventory become obsolete. The subject of the pricing of inventory has received substantial attention in the operations research literature over the years. The conclusion after consultation of the references on the periodic pricing of inventory is that all these articles have two characteristics in common: the time horizon of the items in inventory are considered to be fixed and it is known by how much the price will change. In the problem under consideration only the second characteristic may be assumed. The objective in most of the literature is to find the time when, and how many times the price should be changed.

The diagnostic role of signals in the context of perceived risks in online shopping: Do signals matter more on the Web?

Four experimental studies examine the differential effects of three signals—retailer reputation, perceived advertising expenses, and warranties—on consumer risk perceptions, across two (online and in-store) shopping conditions. The results of three studies suggest that for products with high non-digital attributes (e.g., shirts and jeans), consumers perceive higher risks in online than in in-store settings. Also, for these types of products, mainly due to the non-availability of other significant cues, consumers tend to rely more on signals as diagnostic cues in online shopping conditions. Effectively, the results of these three studies imply that signals are stronger risk reducers in online than in in-store shopping conditions for products high in non-digital attributes. The fourth study tests the boundary condition whereby the diagnostic effects of signals are diminished for products with high digital attributes (e.g., music CDs).

Does Online Product Information Increase Consumer Demand? An Empirical Investigation

The Internet provides consumers with unprecedented amounts of product information. Although the competitive implications of better-informed consumers have been extensively studied, little attention has been paid to the impact of information on overall consumer demand. In this paper, we estimate the differences in demand for music CDs and cassettes between consumers who access online product information and those who do not. Our empirical model accounts for the self-selection effect that consumers who have greater demand for a product are more likely to search for information on that product. After controlling for self-selection and observable consumer characteristics, we show that consumers who access online product information have a 17% greater demand for CDs and cassettes. Using our model estimates, we calculate the benefits of a new marketing strategy in which product information is provided only to those consumers who exhibit the highest marginal demand response to product information. We show that this strategy significantly outperforms the traditional strategy of targeting consumers who had high demand in the past.