Distribution: Sequential Distribution of Hedonic Media Products

Sönke Albers

This research project focuses on marketing challenges regarding the management of hedonic media products that emerge in the age of digital social media. The overall objective is to establish profound scienfic knowledge ranging from understanding to application.
Hedonic media products (HMP) are mostly published with sequential distribution strategies. For example, motion pictures are typically displayed in movie theatres first before subsequent releases on DVD/ Blue-Ray, video-on-demand and TV. This strategy allows for product- and price differentiation in order to address varying degrees of willingness-to-pay from customers. Advertising and consumption experience eventually translate into communication in digital social media channels. In this research group we explore the interdependencies of company generated contend (“paid media”), user generated content (“earned media”) and sales success, specifically in subsequent distribution channels.
In particular, we strive to contribute to (a) a better understanding of sequential distribution strategies, (b) the impact of company communication on buzz in digital social media and their combined impact on product success, and (c) on optimal product- and price differentiations of HMP.
Hedonic media products (HMP) are increasingly marketed via platforms such as Netflix (movies), Spotify (music), and Skoobe (books) that offer large assortments for streaming as flat fee subscriptions. Among other subjects in funding phase two, this project will analyze whether music labels or artists should rather sell their physical CDs or downloads of songs exclusively for a while or whether they should offer their songs on Spotify either at the same time, delayed or never. The question extends to whether the offering via these platforms is profitable at all.

Building upon the findings of the first funding phase, this project now focus on the usage aspect of hedonic media products (HMP). The research focuses on important research questions regarding the management and marketing of hedonic media products that emerge in the age of digital social media. The overall objective is to establish profound scienfic knowledge ranging from understanding to application. Digital HMPs are increasingly marketed via platforms such as Netflix (movies), Spotify (music), and Skoobe (books) that offer large assortments for streaming as flat fee subscriptions. Records of customer usage behavior on these platforms (datafication) allows these platforms to compensate music labels and artists proportional to the streaming of their songs. This leads to similar sequential distribution strategy questions as in the first funding period. In particular, we need to analyze whether music labels or artists should rather start to sell their physical CDs or downloads of songs exclusively for a while or whether they should offer their songs on Spotify either at the same time, delayed or never. However, the question extends to whether the offering via these platforms is profitable at all. To investigate these research questions we need information on the preference functions of consumers elicited either from surveys, market data, or experiments. In addition, the usage compensation will entail fiercer competition among artists. Self-marketing via digital social media (DSM) thus becomes more attractive. Consequently, we want to analyze the effectiveness of the alternative activities and the importance of them for optimization.