Subscription Services – A Simulation Prototype For Descision Support to Music Shop Provider and Labels

September 20, 2007

That`s the titel of an article in the Medienwirtschaft journal from Prof. Dr. Buxmann (TU Darmstadt) and some co-authors.
The authors developed a software tool where they try to predict the revenues of a music subscription service based on empiric market data, the chosen price and the chosen contract and clearing models between shop provider and copyright holders.

The simulation tool can`t help you to find the perfect price point for the customer, because people make their buying decision not only price based (factors like service, usabillity, brand, shopping experience are very important facts you can’t really measure), but the tool can help to answer questions like: Is there any correlation between licensing fee price and the total revenues? How will the curve look like?
Which clearing and contract model between shop provider and copyright holder (GEMA and Label) is best for the label? Pay per play? Or  a participation in sales model? The latter seems more suitable in the simulation.
A quite interesting article I can recommend to read.

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