Bye-bye bundles: The unbundling of music in digital channels

Journal of Marketing

Volumn 74, Issue 3, 2010, Pages 107-123

  Elberse, Anita ^a  

^a HARVARD BUSINESS SCHOOL   (United States)

Author keywords

Bundling; Digital distribution; E commerce; Music industry; System of equations modeling; Unbundling

Indexed keywords

EID: 77952327969     PISSN: 00222429     EISSN: None     Source Type: Journal    
DOI: 10.1509/jmkg.74.3.107     Document Type: Article

References (60)

1. Adams, William J. and Janet L. Yellen (1976), "Commodity Bundling and the Burden of Monopoly," Quarterly Journal of Economics, 90 (August), 475-498
2. Anderson, Simon P. and Luc Leruth (1993), "Why Firms May Prefer Not to Price Discriminate via Mixed Bundling," International Journal of Industrial Organization, 11(1), 49-61.
3. Ansari, Asim, S. Siddarth, and Charles B. Weinberg (1996), "Pricing a Bundle of Products or Services: The Case of Nonprofits," Journal of Marketing Research, 33 (February), 86-93. (Pubitemid 126109042)
4. Apple Inc. (2007a), "Apple Reports Second Quarter Results," press release, (April 25).
5. - (2007b), "100 Million iPods Sold," press release, (April 9).
6. - (2008), "Apple Reports Record Third Quarter Results," press release, (July 21).
7. Bhattacharjee, Sudip, Ram D. Gopal, Kaveepan Lertwachara, and James R. Marsden (2007a), "Stochastic Dynamics of Music Album Lifecycles: An Analysis of the New Market Landscape," International Journal of Human-Computer Studies, 65 (1), 85-93.
8. -, -, -, -, and Rahul Telang (2007b), "The Effect of Digital Sharing Technologies on Music Markets: A Survival Analysis of Albums on Ranking Charts," Management Science, 53 (9), 1359-1374
9. Bradlow, Eric T. and Peter S. Fader (2001), "A Bayesian Lifetime Model for the 'Hot 100' Billboard Songs," Journal of the American Statistical Association, 96 (454), 368-381 (Pubitemid 33283723)
10. Chung, Kee H. and Raymond A.K. Cox (1994), "A Stochastic Model of Superstardom: An Application of the Yule Distribution," Review of Economics and Statistics, 76 (4), 771-775
11. DeGraba, Patrick and Rafi Mohammed (2000), "Inter-Temporal Mixed Bundling and Buying Frenzies," RAND Journal of Economics, 30 (4), 694-718.
12. Dodds, William B., Kent B. Monroe, and Dhruv Grewal (1991), "Effects of Price, Brand, and Store Information on Buyers' Product Evaluations," Journal of Marketing Research, 28 (August), 307-319.
13. Economides, Nicholas (1993), "Mixed Bundling in Duopoly," Working Paper No. EC-93-129, Stem School of Business, New York University.
14. Elberse, Anita (2008), "Should You Invest in the Long Tail?" Harvard Business Review, 86 (7-8), 88-96.
15. - and Jehoshua Eliashberg (2003), "Demand and Supply Dynamics for Sequentially Released Products in International Markets: The Case of Motion Pictures," Marketing Science, 22 (3), 329-354
16. - and Elie Ofek (2007), "Octone Records," Harvard Business School Case No. 507-1082
17. Fong, Cherise (2008), "Are We Spell-Bound by e-Books?" (June 5), (accessed August 31, 2008), [available at http://www.cnn. com/2008/TECH/06/05/digitalbiz.ebooks/].
18. Gilbride, Timothy J., Joseph P. Guiltinan, and Joel E. Urbany (2008), "Framing Effects in Mixed Price Bundling," Marketing Letters, 19 (2), 125-139
19. Gini, Conrado (1921), "Measurement of Inequality and Incomes," The Economic Journal, 31 (121), 124-126
20. Gopal, Ram D., Sudip Bhattacharjee, and G. Lawrence Sanders (2006), "Do Artists Benefit from Online Music Sharing?" Journal of Business, 79 (3), 1503-1534.
21. Guiltinan, Joseph P. (1987), "The Price Bundling of Services: A Normative Framework," Journal of Marketing, 51 (April), 74-85.
22. Hamilton, Rebecca and Joydeep Srivastava (2008), "When 2 + 2 Is Not the Same as 1 + 3: Variations in Price Sensitivity Across Components of Partitioned Prices," Journal of Marketing Research, 45 (August), 450-461
23. Hanson, Ward A. and R. Kipp Martin (1990), "Optimal Bundle Pricing," Management Science, 36 (2), 155-174
24. Janiszewski, Chris and Marcus Cunha Jr. (2004), "The Influence of Price Discount Framing on the Evaluation of a Product Bundle," Journal of Consumer Research, 30 (March), 534-546
25. Jedidi, Kamel, Sharan Jagpal, and Puneet Manchanda (2003), "Measuring Heterogeneous Reservation Prices for Product Bundles," Marketing Science, 22 (1), 107-130.
26. Johnson, Michael D., Andreas Herrmann, and Hans H. Bauer (1999), "The Effects of Price Bundling on Consumer Evaluations of Product Offerings," International Journal of Research in Marketing, 16 (2), 129-142
27. Kahneman, Daniel and Amos Tversky (1979), "Prospect Theory: An Analysis of Decision Under Risk," Econometrica, 47 (March), 263-291
28. Kopalle, Praveen K., Aradhna Krishna, and João L. Assunção (1999), "The Role of Market Expansion on Equilibrium Bundling Strategies," Managerial and Decision Economics, 20 (7), 365-377
29. Lee, Jonathan, Peter Boatwright, and Wagner A. Kamakura (2003), "A Bayesian Model for Prelaunch Sales Forecasting of Recorded Music," Management Science, 49 (2), 179-196
30. Leeds, Jeff (2006), "Squeezing Money from the Music," The New York Times, (December 11), (accessed January 4, 2010), [available at http://www.nytimes.com/2006/12/11/business/media/11music.html].
31. Lichtenstein, Donald R. and William O. Bearden (1989), "Contextual Influences on Perceptions of Merchant-Supplied Reference Prices," Journal of Consumer Research, 16 (1), 55-66.
32. Markman, Keith D., Jennifer J. Ratcliff, Nobuko Mizoguchi, Ronald A. Elizaga, and Matthew N. McMullen (2007), "Assimilation and Contrast in Counterfactual Thinking and Other Mental Simulation-Based Comparison Processes," in Assimilation and Contrast in Social Psychology, Diederik Stapel and Jerry Suis, eds. New York: Psychology Press, 187-206.
33. Mazumdar, Tridip, S.P. Raj, and Indrajit Sinha (2005), "Reference Price Research: Review and Propositions," Journal of Marketing, 69 (October), 84-102.
34. Moe, Wendy W. and Peter S. Fader (2001), "Modeling Hedonic Portfolio Products: A Joint Segmentation Analysis of Music Compact Disc Sales," Journal of Marketing Research, 38 (August), 376-385 (Pubitemid 33318222)
35. Morwitz, Vicki G., Eric A. Greenleaf, and Eric J. Johnson (1998), "Divide and Prosper: Consumers' Reactions to Partitioned Prices," Journal of Marketing Research, 35 (November), 453-463 (Pubitemid 128157897)
36. Mulhern, Francis J. and Robert P. Leone (1991), "Implicit Price Bundling of Retail Products: A Multiproduct Approach to Maximizing Store Profitability," Journal of Marketing, 55 (October), 63-76.
37. The NPD Group (2005), "Progress Report: Digital Music Landscape Shifting, but Slowly," press release, (June 23).
38. Oberholzer-Gee, Felix and Koleman S. Strumpf (2007), "The Effect of File Sharing on Record Sales: An Empirical Analysis," Journal of Political Economy, 115(1), 1-42.
39. RIAA (2006), "2006 Year-End Shipment Statistics," (accessed July 4, 2008), [available at www.riaa.com/keystatistics.php]
40. - (2007), "2007 Year-End Shipment Statistics," (accessed July 4, 2008), [available at www.riaa.com/keystatistics.php]
41. Rosen, Sherwin (1981), "The Economics of Superstars," The American Economic Review, 71 (5), 845-858
42. Salganik, Matthew J., Peter Sheridan Dodds, and Duncan J. Watts (2006), "Experimental Study of Inequality and Unpredictability in an Artificial Cultural Market," Science, 311 (5762), 854-856
43. Schmalensee, Richard (1984), "Gaussian Demand and Commodity Bundling," Journal of Business, 57 (January), S211-30.
44. Sherif, Muzafer and Carl I. Hovland (1961), Social Judgment: Assimilation and Contrast Effects in Communication and Attitude Change. New Haven, CT: Yale University Press.
45. Simonin, Bernard L. and Julie A. Ruth (1995), "Bundling as a Strategy for New Product Introduction: Effects on Consumers' Reservation Prices for the Bundle, the New Product, and Its Tie-In," Journal of Business Research, 33 (3), 219-230
46. Smith, Ethan and Nick Wingfield (2008), "More Artists Steer Clear of iTunes," The Wall Street Journal, (August 28), (accessed January 4,2010), [available at http://online.wsj.com/article/SB121987440206377643.html].
47. Soman, Dilip and John T. Gourville (2001), "Transaction Decoupling: How Price Bundling Affects the Decision to Consume," Journal of Marketing Research, 38 (February), 30-44. (Pubitemid 33234782)
48. Stigler, George J. (1963), "United States v. Loew's, Inc.: A Note on Block Booking," in The Supreme Court Review, Philip B. Kurland, ed. Chicago: University Chicago Press, 152-157
49. Stremersch, Stefan and Gerard J. Tellis (2002), "Strategic Bundling of Products and Prices: A New Synthesis for Marketing," Journal of Marketing, 66 (January), 55-72.
50. Suis, Jerry and Ladd Wheeler (2007), "Psychological Magnetism: A Brief History of Assimilation and Contrast in Psychology," in Assimilation and Contrast in Social Psychology, Diederik Stapel and Jerry Suis, eds. New York: Psychology Press, 9-44.
51. Thaler, Richard (1985), "Mental Accounting and Consumer Choice," Marketing Science, 4 (3), 199-214.
52. Venkatesh, R. and Rabikar Chatterjee (2006), "Bundling, Unbundling, and Pricing of Multiform Products: The Case of Magazine Contem," Journal of Interactive Marketing, 20 (2), 21-40 (Pubitemid 43745126)
53. - and Wagner A. Kamakura (2003), "Optimal Bundling and Pricing Under a Monopoly: Contrasting Complements and Substitutes from Independently Valued Products," Journal of Business, 76 (2), 211-231 (Pubitemid 38148809)
54. - and Vijay Mahajan (1993), "A Probabilistic Approach to Pricing a Bundle of Products or Services," Journal of Marketing Research, 30 (November), 494-508.
55. - and - (2009), "The Design and Pricing of Bundles: A Review of Normative Guidelines and Practical Approaches," in Handbook of Pricing Research in Marketing, Vithala Rao, ed. Cheltenham, UK: Edward Elgar, 232-257
56. Wilson. Lynn O., Allen M. Weiss, and George John (1990), "Unbundling of Industrial Systems," Journal of Marketing Research, 27 (May), 123-138
57. Winer, Russell S. (1986), "A Reference Price Model of Brand Choice for Frequently Purchased Products," Journal of Consumer Research, 13 (2), 250-256
58. Yadav, Manjit S. (1994), "How Buyers Evaluate Product Bundles: A Model of Anchoring and Adjustment," Journal of Consumer Research, 21 (September), 342-353
59. Zeithaml, Valarie (1988), "Consumer Perceptions of Price, Quality, and Value: A Means-End Model and Synthesis of Evidence," Journal of Marketing, 52 (July), 2-22.
60. Zellner, Arnold (1962), "An Efficient Method of Estimating Seemingly Unrelated Regressions and Tests for Aggregation Bias," Journal of the American Statistical Association, 57 (298), 348-368