Digital distribution models reviewed: The content provider's perspective

Abstract

Digital distribution has surpassed physical distribution in key markets and will soon be the dominant music distribution model in Australia. Four different business models (free, ad-funded, pay-per-use and subscription-based) and two different music delivery methods (downloading and streaming) currently compete in the market place. The author analyses each distribution model available in Australia and evaluates advantages and disadvantages from the content provider's perspective. The most striking development is the blurring line between promotion and distribution. Content providers can either lower the barriers to access music in order to facilitate rapid music circulation and create a strong promotional effect to support various revenue streams; or heighten the barriers to access music in order to install an artificial scarcity through excludability, which is essential to implement a business model based on selling musical recordings. In this regard, the variety of different digital distribution models provides a flexible toolbox for content providers to coordinate their overall marketing strategy.