In July 2019, AFC Ajax’s chief executive officer Edwin van der Sar finalized one of the biggest transfers in soccer—that of Matthijs de Ligt, only 19 years old but already one of the sports world’s brightest stars, from AFC Ajax to Italian powerhouse Juventus FC for a €75 million fee. A few months earlier, Ajax had sold another young star, Frenkie de Jong, to Spanish champions FC Barcelona for a record €86 million. Once Europe’s most feared team, Ajax had lost its prominence to teams from Europe’s bigger leagues since the mid 1990s but gained a stellar reputation as a feeder of young talent to clubs in those leagues. Now, just as Ajax seemingly was making its way back to the highest echelons of European soccer—in the 2018-2019 season, Ajax managed to advance to the semifinal of the Champions League, Europe’s most elite club competition—the club would lose two players who played a crucial role in its comeback. Did van der Sar have the right strategy to find long-term success? Could Ajax continue to develop soccer’s next superstars—all while challenging Europe’s elite clubs?
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Article Journal of Marketing May 2010 Bye Bye Bundles: The Unbundling of Music in Digital Channels |
Abstract
Fueled by digital distribution, unbundling is prevalent in many information industries. What is the effect of this unbundling on sales? And what bundle characteristics drive this effect? I empirically examine these questions in the context of the music industry, using data on weekly digital-track, digital-album, and physical-album sales for all titles released by a sample of over 200 artists. I analyze sales dynamics from January 2005 to April 2007-a period in which the share of unbundled units jumped from roughly one-third to two-thirds of total unit sales. My modeling framework, a system of an "album-sales" and a "song-sales" equation estimated using the seemingly unrelated regression method, explicitly accounts for the interaction between sales for the bundle and its components. I find that revenues decrease significantly as digital downloading becomes more prevalent because consumers switch from buying bundles (albums) to cherry-picking their favorite components (songs) on those bundles. The number of items included in a bundle (a measure of its "objective" value) does not emerge as a significant moderator of this effect. Instead, I find that bundles with items that are more equal in their appeal and bundles offered by producers with a strong reputation suffer less from the negative impact of the shift to mixed bundling in online channels.
Keywords: Sales; Distribution Channels; Framework; Mathematical Methods; Revenue; Reputation; Online Technology; System; Information Industry; Music Industry;
Citation:
Elberse, Anita. "Bye Bye Bundles: The Unbundling of Music in Digital Channels." Journal of Marketing 74, no. 3 (May 2010).
