Study On The Pricing Model Of Digital Music Based On Different Profit Models

With the digitalization of information and the rapid development of the Internet,more and more traditional industries have experienced the impact of information technology,including the music industry.The replacement of traditional music by digital music has become an inevitable trend.By the end of 2017,China’s digital music users have reached 503 million,accounting for 68%of the total number of Chinese Internet users.According to the latest data from IFPI,China’s digital music accounts for 96.34%,and digital music revenue ranks among the top 50 countries.The traditional record market has gradually faded out of sight,and the business model around the digital music industry has been a hot topic for people to explore.In the 20th century,due to the lack of domestic attention to copyright,the business model of the digital music industry has been relatively simple.However,in recent years,with the strengthening of copyright awareness of online consumers,the domestic copyright environment has also been continuously improved,directly drive the rapid growth of China’s digital music output value,more and more consumers can accept the mechanism of music payment.Therefore,the profit model of the music platform has gradually changed from a simple advertising mode to a pure subscription mode or a mixed mode of a subscription mode and an advertising mode.For digital music platforms,how to choose a suitable profit model based on market conditions in a fierce market and determine the optimal subscription price is a research issue worthy of attention.This paper mainly conducts in-depth research on the profitability of digital music platform in monopoly market and duopoly market.The main research work is completed in view of the shortcomings of the existing research:Firstly,the pricing model of digital music platform considering different profit models under the monopoly market is constructed and analyzed.This paper comprehensively considers the influence of consumers’ sensitivity to music quality,their preference to different kinds of platforms,negative effects of advertising,advertising revenue and other parameters on the optimal pricing problem and establish a model and calculate the optimal return of the digital music platform when choosing the subscription mode and the mixed mode respectively.All consumers who use the platform in the subscription model are required to pay a subscription fee to become a member and enjoy premium music products and services.In the mixed mode,consumers can choose to pay the subscription fee to become a member to enjoy high-quality non-advertising services,or to enjoy low-quality music and services with advertising without paying fees.Secondly,the pricing model for digital music platforms that consider diferent profit models under the duopoly market is constructed and analyzed.Establish a model and calculate the optimal profitability of each digital music platform in equilibrium in the duopoly market.In the duopoly market,the two platforms offer different quality music.Firstly,considering the utility of consumers under different profit models,the demand function of consumers is given.On this basis,the decision model with the maximum benefit of digital music platform is constructed.Then,the solution model is used to determine the optimal subscribe price and the optimal amount of advertising for the platform in different situations.Last but not least,based on the establishment and solution of the optimal pricing problem model of digital music profit model in the duopoly market,the model results are further analyzed.Compare and analyze the optimal pricing of platforms under different modes,compare the platform benefits under different modes,and carry out numerical analysis,and then give the enterprises valuable and meaningful management inspiration.The results of the study show that no mode can guarantee that the platform will be able to obtain excess profits.The profitability depends mainly on the quality of the music provided by the platform.The profit can get higher with the higher quality of the music.At the same time,the profitability is also related to consumers’ aversion to advertising,advertiser price,quality discount coefficient,and advertising intensity.In addition,the research in this paper enriches the research content of information product profit model and optimal pricing problem,and can provide some ideas and methods for further research work.