The Welfare Effects of Spotify’s Cross-Country Price Discrimination

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

We calibrate a simple empirical logit model of world demand—and subscription pricing—at Spotify, with the use of available data on monthly prices and using streaming volumes by country to create measures of the numbers of users. We find that country-specific pricing increases revenue by 5.9% relative to uniform world pricing, while country specific pricing decreases world consumer surplus by 1.0%. Country-specific pricing within Europe increases revenue in Europe by 1.1%, and EU consumer surplus increases by 0.3% with country-specific pricing. Consumers in lower-income countries gain more from price discrimination than do the consumers in higher-income countries.

Original languageEnglish (US)
Pages (from-to)593-613
Number of pages21
JournalReview of Industrial Organization
Volume56
Issue number4
DOIs
StatePublished - Jun 1 2020

Bibliographical note

Publisher Copyright:
© 2020, Springer Science+Business Media, LLC, part of Springer Nature.

Copyright:
Copyright 2020 Elsevier B.V., All rights reserved.

Keywords

  • Platforms
  • Price discrimination
  • Recorded music
  • Streaming

Fingerprint Dive into the research topics of 'The Welfare Effects of Spotify’s Cross-Country Price Discrimination'. Together they form a unique fingerprint.

Cite this