The development of Internet brought in revolutions in pricing models in the music industry. Currently, there are two common schemes to sell digital music. The first one is referred to as the ownership model, under which the consumers purchase and download the singles they prefer. The second one is referred to as the subscription model, under which consumers subscribe to the streaming services by paying a subscription fee. Out paper reveals that the advertisement revenue rate impacts music service providers’ choice of pricing models. The music provider should choose the subscription model, when the advertisement revenue rate is low; the ownership model when the advertisement revenue rate is moderate; and offer the music for free and exploit profit from advertisements when the advertisement revenue rate is high.
Li, Shengli and Luo, Qiuyeu, "A STUDY OF DIGITAL MUSIC PRICING MODELS" (2016). PACIS 2016 Proceedings. 245.