Desktop version

Home arrow Communication arrow How Digital Communication Technology Shapes Markets: Redefining Competition, Building Cooperation

The Buyer - Unbundling Ownership and Access

Unbundling allows a distinction to be made between ownership of content and access to content, a possibility not recognized by older, established firms. Rather than pay a single price for the bundled good, users can now buy or rent individual components, priced as a single upfront price for downloads or as a recurring rental fee for subscription streaming services. Purchase enables users to access content for an unlimited time horizon while the rent format, paid for by a subscription fee, allows access for the duration of the contract.

This view enables the music industry in general, and the artist, in particular, to price their content by incorporating user discount rates. Users exhibit time sensitivity when they demand the four As or All the music, Anytime, Anywhere and on Any device. In this context, discount rates are a metric of user time-sensitivity. When the user is more time- sensitive, the discount rate is higher.6 In this case, the urgency for consumption is higher so ownership is preferable, unless subscription fees on streaming content are sufficiently low. High-speed broadband is the key bottleneck since delivery of content remains the province of the Internet service provider, which is often combined with cable service in many parts of the country. The introduction of gigabit fiber networks (speeds exceeding one gigabit per second) by Google and others is likely to lead to a large increase in average download speed offered by cable providers, making streaming content easier to access [64].

< Prev   CONTENTS   Source   Next >

Related topics