Alright for the Consumer
The Value of Silence: The Effect of UMG’s Licensing Dispute with TikTok on Music Demand
Mengjie (Magie) Cheng, Elie Ofek & Hema Yoganarasimhan
Marketing Science, forthcoming
Abstract:
Social media platforms like TikTok have transformed how music is discovered, consumed, and monetized. This study examines the implications of the dispute between TikTok and Universal Music Group (UMG), which resulted in UMG removing its music from TikTok from February to May 2024. UMG claimed that TikTok’s compensation was inadequate because consumption of its tracks on the platform potentially reduced revenue that could be generated elsewhere. Conversely, TikTok argued that their compensation was appropriate, emphasizing the promotional and discovery benefits for artists. To examine the validity of these conflicting viewpoints, we conduct a Difference-in-Differences analysis, using tracks from Sony and Warner as a control group. We generally find that removing UMG music from TikTok did not significantly alter the overall demand for UMG tracks on streaming platforms like Spotify and YouTube. However, there is significant heterogeneity across tracks; previously available tracks on TikTok experienced a 2%–3% increase in consumption when removed, indicating a substitution effect, predominantly encompassing more popular tracks from well-known artists. Conversely, UMG tracks not previously available on TikTok saw a 1%–3% decrease in streams, indicating a complementarity effect, encompassing mainly less popular tracks from lesser-known artists. Further analysis suggests that the complementarity effect is driven by TikTok’s role in promoting and enabling discovery of artists with a partial presence on the platform. An economic impact analysis shows that TikTok significantly undercompensates UMG, aligning with the terms of a new licensing agreement between the parties. This study provides valuable managerial implications for music labels, social media platforms, streaming services, and artists.
How Perceptual Disfluency Affects Consumer Choices
Shahryar Mohsenin & Kurt Munz
Journal of Consumer Research, forthcoming
Abstract:
Marketing materials often create difficulties for consumers through elements like unconventional fonts or distracting background images, leading to perceptual disfluency -- a sense of difficulty encoding information. During choices, consumers can mistake perceptual disfluency for choice difficulty, a feeling of indecision. Building on this idea, eleven preregistered experiments (N = 9,042) show that, when making choices, perceptual disfluency can lead consumers to rely on information that feels more intuitively appealing to them, such as a familiar brand, a preferred country of origin, or a recommendation, rather than on information they must carefully consider like numerical product specifications. Differing from the effect of perceptual disfluency in other situations, during choices, this effect occurs because consumers process information less deeply, engaging in relatively more intuitive and less analytical processing. This effect is amplified when consumers endorse a “fast-is-accurate” lay theory. In contrast, it does not occur when consumers do not mistake perceptual disfluency for choice difficulty, as when prompted to consider the actual reason for the disfluency, or when not making a choice.
Evaluating the Impact of Privacy Regulation on E-Commerce Firms: Evidence from Apple’s App Tracking Transparency
Guy Aridor et al.
Management Science, forthcoming
Abstract:
Assembling novel data sets on online advertiser spending, performance, and revenue, we quantify the economic effects of Apple’s App Tracking Transparency (ATT) privacy policy on e-commerce firms. We find that conversion-optimized Meta advertisements, affected most by ATT, saw a 37% reduction in click-through rates after ATT. Although firms responded by shifting ad spending from Meta to the Google ecosystem, firms with higher baseline Meta dependence nevertheless experienced a substantial decline in firm-wide revenue relative to firms with lower baseline Meta dependence. We quantify these effects using a variety of methods, finding revenue decreases in the range between 8% and 40% relative to less exposed firms. These declines were primarily borne by smaller e-commerce firms, raising questions about the tradeoffs between consumer privacy and the ability of smaller e-commerce and direct-to-consumer firms to succeed in the product market.
The Social Nature of Voice Technology
Maximilian Gaerth, Shiri Melumad & Robert Meyer
University of Pennsylvania Working Paper, June 2025
Abstract:
In recent years, voice technologies have afforded consumers the convenience of engaging in virtually any online task using their voice rather than a keyboard and mouse. A theory is advanced arguing that the modality through which users interact with voice technology-speaking (vs. clicking or typing)-makes the technology feel innately social, such that communicating to it triggers self-presentational concerns akin to those arising in human conversation. This, in turn, leads users to express choices and communications that reflect greater consideration of social desirability. Evidence for these ideas come from five experimental studies (N = 6,188), showing, for example, that participants who dictated (vs. typed) ChatGPT queries were less disclosing of negative personal problems, and those who expressed choices by speaking to (vs. clicking on) a computer were willing to pay more to avoid choosing an embarrassing brand. Implications for theory and practice are discussed.
Starting Positive: The Impact of Self-Presentation Concerns on Consumer Reviews
Elisa Solinas et al.
Journal of Consumer Research, forthcoming
Abstract:
This research investigates how reviewers’ self-presentation strategies influence their posting behavior. We find reviewers are less likely to post negative reviews early in their review history due to concerns that doing so would make them appear as lacking warmth. This concern diminishes as the number of reviews associated with their profile increases, resulting in a discernable negative trend in ratings at the reviewer level. We document this trend across two well-known review platforms (Yelp and TripAdvisor). A series of controlled laboratory studies replicate the effect while demonstrating the role played by self-presentation concerns in explaining the downward trend of ratings. Specifically, we find concerns about appearing to lack warmth influence reviewers’ initial reluctance to post negative (but not positive) reviews, while concerns about appearing competent do not. We identify two theoretically consistent managerial interventions that moderate the effect. Allowing reviewers to rate experiences without associating a review with their profile reduces the effect of the number of prior reviews on their likelihood to post, as does prompting them to mention one positive element in their written comments. Our findings underscore the common concern that online review platforms provide positively skewed ratings and offers insight into how to address this.