Advertising on spotify cost12/8/2023 The introduction of affordable flat rates for customers increased the popularity of online platforms. Many global market leaders in the music, motion picture, and gaming industries, such as Spotify, Netflix, and Electronic Arts, provide online access to digital content, which is attractive to consumers because the platforms offer large assortments at reasonable prices (Carroni & Paolini, 2020 Datta et al. They are popular for digital content or services that “are non-rival, have near zero marginal costs of production and distribution, low marginal costs of consumer search, and little transaction costs” (Lambrecht et al., 2014, p. Platforms serve as (two-sided) markets in which demand meets supply. We conclude with a research agenda on the impact of business conventions for users, platforms, and artists in the music streaming industry. We discuss demand and supply-side consequences that may change the way music is currently produced and consumed. ![]() Depending on the remuneration system, we find a substantial reallocation of nearly 170 million € per year at Spotify. Using individual-level data from 3,326 participants and data from Spotify’s API, we empirically quantify the monetary consequences of this change for the music industry. This research investigates aspects of the supply and demand side effects as well as the resulting monetary consequences of changing the currently applied proportional-to-usage remuneration policy (pro rata) to a user-centric policy. There is an ongoing heated debate with respect to how the income of flat rates through streaming services should be allocated to right holders (labels and artists). ![]() The music industry’s business practices could be on the verge of their next disruption. While flat rates are efficient in reducing transaction costs for administering customers, platforms’ rules for remunerating content right holders are crucial for royalty allocation and, as a result, heavily discussed in several industries. ![]() Nowadays, platforms in many industries offer content for a (monthly) flat rate (e.g., music streaming).
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