Rajiv K. Sinha & Naomi Mandel
In recent years, music industry sales have declined in the United States by an average of 7% per year, after peaking in 1999. Much of this sales decline has been attributed to the widespread use of illegal file-sharing sites, such as Napster, Grokster, and LimeWire. However, the success of iTunes and other legal file-sharing Web sites seems to indicate that though many consumers pirate their music, a portion of music consumers are willing to pay a positive amount to download music legally. The goal of this article is to ascertain the primary factors that govern consumers’ willingness to pirate a digital music track, such as positive incentives (e.g., improved functionality of the legal Web site), negative incentives (e.g., perceived risk of piracy), and consumer characteristics.
An important consumer characteristic that may determine a person’s piracy tendency is his or her optimal stimulation level, which is related to the notion of risk tolerance. People with high optimal stimulation levels desire novel, varied, and complex experiences and sensations, and in general, they are willing to take the risks necessary to achieve such experiences. Because such people are likely to seek out new artists and songs that are not currently in their collections and have a tendency to seek out risks, they are likely to exhibit a higher propensity to download music illegally than people with low levels of optimal stimulation.
Questions about intentions to pirate can be sensitive in nature, and respondents may bias their answers according to their perceptions of “correct” or socially desirable responses. Therefore, the authors attempted to obtain a valid estimate of the tendency to pirate by measuring it both indirectly (e.g., willingness to pay for the legal alternative) and directly (e.g., piracy preference) in three separate studies.
The results of the three studies suggest that negative incentives are a strong deterrent for certain consumers, but they can actually increase piracy tendencies for others. Study 1 demonstrates that a 10% increase in perceived probability of getting caught resulted in an increase of only $.03 in consumers’ willingness to pay for a legal download. Study 2 shows that for consumers with high levels of optimal stimulation (and thus higher tolerance for risk), increasing the perceived risk may actually backfire by increasing their likelihood to pirate. Finally, Study 3 indicates that though increasing the perceived risk may have a limited effect on decreasing piracy, offering enhanced Web site features can be highly effective. All segments of respondents were less likely to pirate when the alternative, pay Web site offered features, such as extensive music catalogs and the availability of extras, such as rare recordings, live concerts, and downloadable cell phone ringtones and videos. Therefore, the authors recommend that the Recording Industry Association of America make additional efforts to work with legal Web sites to make such features available.
Rajiv K. Sinha is Associate Professor of Marketing in the W.P. Carey School of Business at Arizona State University. He received his PhD in Marketing from Pennsylvania State University. His current research focuses on modeling piracy of digital products, time-inconsistent behavior in the context of addiction, and innovation diffusion. His articles on these and related topics have appeared in Journal of Marketing, Journal of Marketing Research, Marketing Science, and other leading journals in management and engineering.
Naomi Mandel is Associate Professor of Marketing in the W.P. Carey School of Business at Arizona State University. She received her PhD in Marketing in 2000 from the Wharton School at the University of Pennsylvania. Naomi’s research focuses on nonconscious influences on consumer preference and consumption experiences. She has published in Journal of Consumer Research, Journal of Consumer Psychology, and Journal of Interactive Marketing and serves on the editorial board of Journal of Consumer Research.
Journal of Marketing, Vol. 72, No. 1, January 2008
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