Adaptive Conjoint Analysis for Pricing Music Downloads

Finding the right pricing for music downloads is of ample importance to the recording industry and music download service providers. For the recently introduced music downloads, reference prices are still developing and to find a revenue maximizing pricing scheme is a challenging task. The most commonly used approach is to employ linear pricing (e.g., iTunes, musicload). Lately, subscription models have emerged, offering their customers unlimited access to streaming music for a monthly fee (e.g., Napster, RealNetworks). However, other pricing strategies could also be used, such as quantity rebates starting at certain download volumes. Research has been done in this field and Buxmann et al. (2005) have shown that price cuts can improve revenue. In this paper we apply different approaches to estimate consumer's willingness to pay (WTP) for music downloads and compare our findings with the pricing strategies currently used in the market. To make informed decisions about pricing, know...

• Type: Conference
• Year: 2006
• Where: GFKL
• Authors: Christoph Breidert, Michael Hahsler
• Keywords: Data Mining, GFKL 2006, Music Downloads, Pricing, Pricing Strategies