Int. J. Electronic Business, Vol. 15, No.

1, 2019 21

Drivers and deterrents of music streaming services

purchase intention

Teresa Fernandes* and João Guerra

Faculty of Economics,
University of Porto,
Rua Dr. Roberto Frias, s/n, 4200-464 Porto, Portugal
Email: [email protected]
Email: [email protected]
*Corresponding author

Abstract: Generalised access to online content, with no transfer of ownership,

revolutionised consumer behaviour. The music industry is a paradigmatic
example: physical product sales decreased and even online music stores are
increasingly threatened by the rise of on-demand music streaming services
(MSS). However, MSS find it difficult to persuade users to opt for the premium
version. Therefore, the purpose of this study is to assess what drives (deters)
users’ intention to purchase MSS, as well as to examine the role of gender and
age. Based on data collected from 318 MSS users, the study shows that both
perceived value and perceived fee are significant predictors of MSS purchase
intention, with the negative impact of the latter surpassing the positive one of
the former, while the moderating effect of age and gender was supported. Our
study contributes to a deeper understanding of MSS purchase intention, and
offers important insights to MSS providers.

Keywords: online content; music streaming services; MSSs; freemium;

purchase intention; technology acceptance model; TAM; value-based adoption
model; VAM; gender; age.

Reference to this paper should be made as follows: Fernandes, T. and

Guerra, J. (2019) ‘Drivers and deterrents of music streaming services purchase
intention’, Int. J. Electronic Business, Vol. 15, No. 1, pp.21–42.
Biographical notes: Teresa Fernandes obtained her BS, MBA, and PhD from
the University of Porto. She is an Assistant Professor at the University of Porto,
where she is also the Director of the MSc in Services Management and lectures
in the area of services and digital marketing. Her research focuses on customer
services, relationships, engagement and experience. Her research has been
published in the Journal of Services Marketing, Journal of Retailing and
Consumer Services, Journal of Marketing Management, Journal of Business
and Industrial Marketing, Journal of Strategic Marketing, among others
João Guerra is a former Master’s student from the Faculty of Economics,
University of Porto, Portugal. He has professional experience in the areas of
innovation, entrepreneurship and investment management gained from his
work in a start-up accelerator and in a consulting firm. He holds a Master’s in
Management from the Faculty of Economics, University of Porto, Portugal.
This paper is a revised and expanded version of a paper entitled ‘Purchase
intention of online content: an application to music streaming services’
presented at AMA SERVSIG, Maastricht University, The Netherlands,
17–19 June 2016.

Copyright © 2019 Inderscience Enterprises Ltd.

22 T. Fernandes and J. Guerra

1 Introduction

With the rise of the internet and increased reliance on IT-based e-commerce systems,
sharing goods and services through information technology was facilitated (Hamari et al.,
2016), from peer-to-peer accommodation to car sharing (PwC, 2015). In particular,
online content service industries have grown rapidly (Wang et al., 2013): the web
revolution brought the possibility to access online content that used to be available only
offline, on-demand and with no transfer of ownership (Bardhi and Eckhardt, 2012; Lin
et al., 2013). Online content refers to the category of digital content shared and
distributed through online channels, such as online videos and games, electronic journals,
e-books and, the focus of this study, digital music (Li and Cheng, 2014).
The music industry is a paradigmatic example of this revolution: before digitisation,
record labels controlled their own value chain, from signing new artists to distributing
their music to record stores (Nylén and Holmström, 2015). Only big bands with
professional and influential support would be able to generate a significant amount of
income in this environment. Nowadays, with the digitisation of music, the artists
themselves make their own decisions concerning marketing and promotion of their
records. The rise of digital channels brought significant changes into the music field and
the industry structure has undergone a deep transformation process (Warr and Goode,
2011), with a strong growth of digital sales in recent years and the development of new
business models (Wlömert and Papies, 2016). Hence, the music industry constitutes a
challenging, highly dynamic, yet under researched, marketing environment (Hollebeek
et al., 2016; Sinclair and Green, 2016).
The way consumers listen to music has also changed, mainly through access made
easier in the internet through digital spaces and streaming platforms like iTunes or
Spotify (Sinclair and Tinson, 2017). Nowadays, consumers face “a myriad of music
platforms with widely different characteristics in terms of business model (advertising
supported, fee-based, etc.) delivery mode (streaming, downloading, etc.) and others”
[Weitjers et al., (2014), p.537]. Through new concepts of digital music distribution
(Doerr et al., 2010) such as music as a service (MaaS), fans everywhere can now listen to
every song of every band over the internet as a service, blurring national boundaries.
Digital music came to stay, accounting for the first time for over 50% (54%) of total
industry revenues (IFPI, 2018), while conversely physical product sales are declining
(Sinclair and Tinson, 2017) together with illegal downloading (Sinclair and Green, 2016).
In particular, licensed music streaming services (MSS) overcame $17.3 billion of sales in
2017, following a 41.1% sharp growth (IFPI, 2018), and are expected to reach a total of
978 million users and 220 million subscribers by 2020 (Statista, 2018b). As such, it
became the fastest growing music option, offering millions of songs from different record
labels (Cesareo and Pastore, 2014) which are streamed instead of being downloaded,
without transferring ownership (Doerr et al., 2013). In fact, the underlying concept of
MSS relies on inducing consumers to listen to streamed music on demand. The majority
of these MSS providers use the ‘freemium’ model (Anderson, 2009), where the core,
basic version is offered for free, while revenues are generated through the sales of paid
premium versions (Hamari et al., 2017a; Sinclair and Tinson, 2017). Freemium, an
increasingly dominant business model for today’s services, is a promising solution to
 Drivers and deterrents of music streaming services purchase intention 23

earn money, now that the ‘digitally embracing’ and ‘device connected’ Web 2.0 users
feel increasingly entitled to free services (Dou, 2004; Wang et al., 2005; Pauwels and
Weiss, 2008; Veit et al., 2014). This business model draws a large customer base with
free entry pricing (Hamari et al., 2017a; Chen et al., 2018a), which can then be monetised
through an upgraded version available for a subscription fee (Mantymaki and Salo, 2015;
Vock et al., 2013). By giving access to a free version, providers hope to optimise
consumer trial and, over time, engagement with the service, which could lead users to opt
for the premium version (Dinsmore et al., 2017). Users can listen to almost every song
available by using the free version of the service, but paying customers have several
advantages, like no advertising, better sound quality, unrestricted access to the catalogue,
offline listening and the option to download their favourite albums (Sinclair and Tinson,
2017; Wagner et al., 2014). These paying premium users not only allow financing
non-paying users, which cause almost no marginal costs, but also help providers to pay
royalties to the music license holder: therefore, it is critical for the long-term viability of
MSS to improve their conversion rates (Wagner et al., 2014; Wang et al.,. 2005).
However, MSS face the challenge of persuading users to opt for the for-fee version
(Doerr et al., 2010; Dinsmore et al., 2017), since consumers who are accustomed to free
content seem unready to embrace this practice (Dou, 2004; Li and Cheng, 2014; Lin et
al., 2013; Yang et al., 2015). Moreover, the peculiarities of online content as a paid
product (namely, the existence of many undifferentiated free alternatives) also constitutes
a challenge for these services (Dou, 2004; Pauwels and Weiss, 2008; Vock et al., 2013).
According to the IFPI (2016), nearly a billion listeners use free ad-supported versions,
which compares to paid subscribers, who currently number around 100 million.
According to Statista (2017), MSS will reach 1,350 million users worldwide by 2020, but
less than 15% will be paid subscribers. As of June 2018, Spotify had 200 million active
users, of which only 80 million are premium, while only 5.2 million from the
76.3 million users of Pandora are paying subscribers (Statista, 2018a). Therefore, in order
to convert users to paid subscribers, understanding the reasons why they may choose to
accept (or not) the premium option becomes crucial for MSS providers (Chen et al.,
2018a).
But despite its relevance, very few studies have investigated the changing dynamics
of music consumption (Sinclair and Green, 2016) or addressed freemium as a new type of
revenue model in this industry (Wagner et al., 2014). Even fewer (e.g., Doerr et al., 2010;
Oestreicher-Singer and Zalmanson, 2013) discuss consumers’ acceptance of freemium as
a model for accessing services and their willingness to pay for them, when free basic
service is available (Doerr et al. 2013; Chen et al., 2018b). Therefore, our purpose is to
assess what drives (or deters) users’ intention to purchase MSS, by examining the
relationship between consumers’ perceptions and demographic characteristics, and their
willingness to pay for MSS. Based on the technology acceptance model (TAM) and the
value-based adoption model (VAM), a research model was tested, using data collected
from 318 freemium MSS users.
The remainder of this study is structured as follows. First, we present the literature
review relevant to this study and develop the research hypotheses. Then, we describe the
methodology used, and we present and discuss the research findings. We conclude by
presenting final conclusions, contributions and suggestions for future research.
24 T. Fernandes and J. Guerra

2 Conceptual background

Offering services for free to at least a segment of the customer base became a prevalent
business model online, with consumers being able to choose from a multitude of free
e-services (Anderl et al., 2016), especially within hedonic-oriented and entertainment
online content (Chu and Lu, 2007). In the music industry, these online business models
include streaming services (Sinclair and Tinson, 2017), which rely on either subscription
fees (paid streaming services) and/or advertising (providing streaming free of charge) as
sources of revenue (e.g., Spotify). This so-called ‘freemium’ model (Anderson, 2009) is a
topic of ongoing controversial debate in the music industry (Wlömert and Papies, 2016):
while some industry representatives consider it a part of the ‘music industry’s digital
revolution’ (IFPI, 2016) and a way to expand the whole market, others question its
sustainability and consider MSS harmful for the industry. This business model followed
by MSS deviates from the traditional business model in the music industry and is
designed to provide on-demand access to a comprehensive library of tracks rather than
purchase individual music products (e.g., CDs or downloads) or even download-to-own
(Doerr et al., 2013; Papies et al., 2011). The central point of MSS is not the sale or
lending of music, but the service of making music available all the time (Doerr et al.,
2010), allowing access over ownership (Bardhi and Eckhardt, 2012; Hamari et al., 2016;
Sinclair and Tinson, 2017). The success of this model largely depends on consumer
willingness to pay for freemium services (Li and Cheng, 2014; Wagner et al., 2014;
Hamari et al., 2017a). Yet, persuading users to spend money on these services represents
a major business challenge (Dinsmore et al., 2017), especially when consumers have
plenty of free alternatives, a deeply entrenched ‘free-lunch’ mentality (Dou, 2004; Lin
et al., 2013; Ye et al., 2004) and reference prices close to zero (Papies et al., 2011), which
leads to a general belief that ‘content is free’ (Li and Cheng, 2014; Pauwels and Weiss,
2008; Yang et al., 2015). Furthermore, users may perceive a certain degree of unfairness
associated with paying for online content, given that MSS advertising revenues are
considered enough to support their financial viability (Lin et al., 2013; Ye et al., 2004;
Wang et al., 2005). Hence, understanding the factors affecting consumer intention to
subscribe or not to subscribe to the fee-based tier has become an important issue both for
academics and practitioners (Pauwels and Weiss, 2008; Wang et al., 2005, 2013; Vock et
al., 2013; Chen et al., 2018b).
However, there is a dearth of empirical research devoted to this important issue, and
scant studies have investigated the willingness to pay for freemium access-based services.
Doerr et al. (2010) explored the importance and the willingness to pay for attributes of
MSS premium offers surveying a sample of 132 MSS users. Results show that contract
duration, music quality and the possibility of offline access significantly increase users’
willingness to pay by adding customer value to the service. Oestreicher-Singer and
Zalmanson (2013) found out that very active network users are more willing to pay for
freemium services. Vock et al. (2013) studied the willingness to pay for a social
networking site (SNS) transitioning to a freemium-based model and found that the belief
that the network represented a large, cohesive community, as well as perceived social
capital from the site, had a positive association with users’ willingness to pay for
premium services. Wagner et al. (2014) analysed whether a free service’s limitations
impact the evaluation of free and premium versions, and concluded that companies
providing freemium services can increase conversion by providing a strong functional fit
benefit between their free and premium services. Hamari et al. (2017b) empirically
 Drivers and deterrents of music streaming services purchase intention 25

studied how perceived service quality predicts customers’ willingness to continue using
freemium services and to purchase premium content in the context of free-to-play games,
and concluded that that perceived quality of the freemium service had little effect on
purchases of premium content, except through the increased willingness to use the
freemium service. According to the authors, users are probably already fairly satisfied
with the free core service, and therefore higher service quality has a negligible effect on
their purchase decisions. Chen et al. (2018a) empirically tested social and psychological
constructs and their impact on MSS purchase intentions and concluded that social
influence impacts attitudes towards MSS, which in turn drive purchase intention, while
continuance intention of paid music streaming is driven by hedonic performance
expectancy of consumers. Beyond access-based services, other studies focused on the
willingness to pay for online content (Table 1), mainly based on the TAM and the VAM.
These studies highlight the role of customers’ perceived value (PV) (Li and Cheng,
2014), and regard it as the most critical factor to be considered (Chu and Lu, 2007; Lu
and Hsiao, 2010). PV is conceptualised as involving a consumer’s assessment of the ratio
of perceived benefits to perceived costs (Wang et al. 2013). It involves a trade-off of
‘give’ (i.e., perceived sacrifices) and ‘get’ (i.e., perceived benefits) components (Li and
Cheng, 2014).
The TAM, developed by Davis (1989), is regarded as one of the most important
models in the area of user acceptance of technology (Borges et al., 2015; Chen et al.,
2016). In TAM, user acceptance is analysed through two important measures, usefulness
and ease of use. According to Davis (1989), the first is “the degree to which an individual
believes that using a particular system would enhance his/her job performance,” while the
second refers to “the degree to which an individual believes that using a particular system
would be free of physical and mental efforts.” Various studies based on TAM (e.g.,
Cheong and Park, 2005; Wu et al., 2016; Zhang et al., 2018) showed that this model is a
good predictor of users’ actual technology usage. Nevertheless, there are situations in
which TAM was not so accurate. In the context of online content services, many users
may be reluctant to use for-fee information services even if it is useful for them (Wang,
2008). TAM’s perceived usefulness (PU) only taps the perceived benefit component,
omitting the perceived cost. To solve this issue, many models were addressed, including
the revised TAM (Wang, 2008) which replaces PU with PV. Moreover, Venkatesh and
Bala (2008) proposed an upgrade of the original TAM, the TAM 3. In this model, the
determinants of PU and ease of use are separated, meaning that the processes of the first
do not explain the processes of the second and vice versa. For example, high levels of
computer playfulness do not necessarily enhance usefulness. These modifications expand
the original model, but preserve it as a goal-oriented technology adoption model, related
to its technical performance and usability (Morgan-Thomas and Veloutsou, 2013).
An alternative model is the VAM proposed by Kim et al. (2007). This value-based
approach explains customers’ usage intention from the value-maximisation perspective,
and it was developed to overtake the weaknesses of TAM in explaining new technology
adoption, such as mobile technologies (Borges et al., 2015). Given that satisfaction itself
is no longer enough to explain technology adoption, in VAM PV is a main determinant of
user adoption and is determined by two cost beliefs (perceived fee – PF and technicality)
and two benefit beliefs (usefulness and enjoyment). While PU refers to functional value,
perceived enjoyment (PE) refers to hedonic value, and plays also an important role in
determining usage behaviours (Chen et al., 2016, 2018a). Authors such as Wang et al.
26 T. Fernandes and J. Guerra

(2013, 2018) or Chu and Lu (2007) also support the notion that utilitarian and hedonic
benefits have a great influence on PV (Table 1). Wang et al. (2013) studied purchase
intention of online music services, confronting two benefit beliefs (usefulness and
enjoyment) and two cost beliefs (PF and technicality), and demonstrated the positive
influence of PV on purchase intention. Chu and Lu (2007) extended TAM by
incorporating the value-intention framework to investigate the purchase behaviour of
early adopters of online music. The authors found two beneficial factors (usefulness and
playfulness) had a positive influence on purchase intention, while perceived price was the
most direct monetary sacrifice, negatively relating to PV. Regarding mobile navigation
apps, Wang et al. (2018) found that benefits such as enjoyment positively influenced
purchase intention, while complexity had a negative effect. Thus, VAM captures both
sacrifice and benefit dimensions, which people usually consider before decision-making
(Zheng et al., 2015) and can be used to explain and predict purchase intention of online
content (Wang et al., 2013, 2018), such as MSS, the focus of this study.
Table 1 Overview of the relevant literature on willingness to pay for online content using
TAM and VAM

Study Theory/model Research goal Main findings

Cheong TAM Examine the motivations Usefulness, playfulness, perceived
and and the behavioural aspects price and attitudes towards
Park behind the mobile internet technology have influence on the
(2005) acceptance in Korea behavioural intention to use it
Kim VAM Adoption of mobile internet Sacrifice components (technicality
et al. in Singapore and perceived fee) contribute more
(2007) to perceived value than benefits
(usefulness and enjoyment)
Chu TAM, VAM Examine the purchase Two benefits (usefulness and
and Lu behaviour of online music playfulness) have a positive
(2007) early adopters in Taiwan influence on purchase intention.
Perceived sacrifice (price)
negatively relates to perceived value
Wang VAM Understand the factors Antecedents (except technicality)
et al. affecting purchase intention influence purchase intention
(2013) of online music services in (through perceived value)
Taiwan
Wang VAM Examine the purchase Compatibility, relative advantage,
et al. intention of mobile GPS perceived enjoyment, cost
(2018) navigation apps in Taiwan (positively) and complexity
(negatively) influence perceived
value and purchase intention

3 Research framework and methodology

The purpose of this study is to assess what drives (or deters) users’ intention to purchase
MSS and pay the for-fee version of the service, considering the role of age and gender.
Based on existing models in the literature, namely TAM and VAM, a research model was
developed, including variables such as PU, PE, PV, PF, technicality, age and gender to
build the research hypotheses (Figure 1).
 Drivers and deterrents of music streaming services purchase intention 27

Figure 1 Research framework (see online version for colours)

Technicality was regarded in this study as an antecedent of PU and enjoyment. According

to Wang et al. (2013), technicality can be defined as “the extent to which a customer
believes that using an online content service would suffer from physical, mental and
learning effort” (p.203). Considering technicality as a non-monetary cost (Kim et al.,
2007), a negative impact on both constructs is expected. In his research about user
acceptance of information technology, Davis (1993) found a strong relationship between
technicality and PU, as well as Cheong and Park (2005) and Teo et al. (1999). Further,
the influence of technicality on enjoyment was demonstrated by Moon and Kim (2001),
who found that perceived ease of use has a strong impact in PE. As such, we consider
that:
H1 Technicality is negatively related to PU in the context of MSS.
H2 Technicality is negatively related to PE in the context of MSS.
Considering the relationship between usefulness, enjoyment, and PV, Wang et al. (2013)
suggested that the so-called utilitarian (usefulness) and hedonic (enjoyment) benefits
have a great influence on PV, despite considering the influence of the latter higher. The
same was found by Chu and Lu (2007) in a research that assessed the factors that drive
music purchase intention in Taiwan. Kim et al. (2007) also supports the idea that both PU
and enjoyment affect PV; however, unlike the previous examples, in their study the
difference between both impacts is blurred. A different approach was followed by Van
der Heijden (2004), who associates directly PU and PE to adoption intention (without PV
as mediator) in a study about user acceptance on hedonic systems. According to
Hampton-Sosa (2017), MSS that are useful and provide enjoyment lead to adoption. As
such, we posit that:
H3 PU is positively related to PV in the context of MSS.
H4 PE is positively related to PV in the context of MSS.
This research further considered PV and PF as antecedents of purchase intention of MSS.
Previous studies on online contexts (e.g., Chu and Lu, 2007; Kim et al., 2007; Lu and
Hsiao, 2010; Lin et al., 2013; Wang et al., 2013; Vock et al., 2013; Hsiao and Chen,
2016) found that PV has a positive impact on purchase intention. For instance, Lu and
28 T. Fernandes and J. Guerra

Hsiao (2010) and Vock et al. (2013) assessed the intention to pay for social network sites,
Wang et al. (2013) studied the purchase intention of online content services, and Hsiao
and Chen (2016) examined in-app purchase intention for mobile games. Regarding PF, a
direct monetary sacrifice, a negative impact on consumers’ willingness to pay is expected
(Lin et al., 2013). Andersson and Heinonen (2002), in a study about the acceptance of
mobile services, suggested that the fact of having a fee involved when trying a new
service can prevent users from really using it. Cheong and Park (2005) also alerted to the
negative influence of perceived price on the intention to use mobile internet, as well as,
Liao and Cheung (2001) in their research on internet-based e-shopping. We thus suggest
that:
H5 PV is positively related to purchase intention in the context of MSS.
H6 PF is negatively related to purchase intention in the context of MSS.
Different demographic characteristics (gender, age) may also lead consumers to hold
different attitudes regarding paying for MSS. In fact, several studies suggest that males
and females differ in their decision-making processes, and have different gender-based
perceptions regarding technology (Venkatesh and Morris, 2000), which can influence
their preferences regarding, e.g., online shopping (Cyr and Bonanni, 2005) or mobile
apps (Leon, 2018). However, gender role has been scarcely investigated regarding online
purchase intentions (Chiu et al., 2005; Slyke et al., 2002), and even less when purchases
refer to online content. Not only relatively little research has been done in this area, but
also results have been mixed. Historically, and regarding e-commerce of goods, research
has found that men are more likely to make online purchases and that they tend to focus
more on the value gained through the purchase, while women focus more on
trustworthiness, assurance and social factors (Cyr and Bonanni, 2005; Hwang, 2010;
Venkatesh and Morris, 2000). However, in their study on online purchase intentions in
e-tail services, Chiu et al. (2005) concluded that men are less likely to consider the
internet useful for making purchases than women. Furthermore, online purchasing is an
innovative way to acquire goods and services, and hence the level of innovativeness
among females could be expected to lead to higher online purchase intentions when
compared with men (Chiu et al., 2005). Nevertheless, since females take more time to get
used and familiarise themselves with internet applications than men (Teo and Lim, 1996)
and have potentially higher levels of computer anxiety (Venkatesh and Morris, 2000),
this may reflect that females have great difficulty than males in performing online
purchases (Brown et al., 2003; Chiu et al., 2005). Considering online content purchases,
Hamari et al. (2017b) found females to be less likely to purchase premium content in the
context of free-to-play games. Regarding willingness to pay for online news, gender was
found to influence paying intent, which for Chyi and Lee (2013) is higher for men, while
Punj (2015) concluded the opposite. Finally, Ye et al. (2004) found no gender differences
regarding online content purchases, and Lu and Hsiao (2010), while studying the
influence of extro/introversion on the intention to pay for SNS, found that gender (along
with age and income) had no effect on payment intention. Given the lack of consistency
in the literature regarding the relationship between gender and online purchases, and the
relative absence of studies considering its role in the context of purchase intention of
freemium services, we hypothesise that:
H7 Purchase intention varies significantly according to gender in the context of MSS.
 Drivers and deterrents of music streaming services purchase intention 29

Also age is a widely used demographic variable to characterise the adoption of

technologies (Morris and Venkatesh, 2000). Usually, older people feel less comfortable
when dealing with new technologies, while youngsters tend to be early adopters (Kumar
and Lim, 2008; Lee and Yang, 2013; Pagani, 2004). Younger users show greater
predisposition and trust towards new technologies, find them easier to use, and thus
dedicate less effort to examining its details and evaluating its quality (Liébana-Cabanillas
et al., 2014, 2018). However, the role of age in predicting online purchase intentions
remains an open question (Sorce et al., 2005). Regarding purchases of goods, previous
studies concluded that younger people are more likely to shop online (Stafford et al.,
2004) and to purchase virtual reality hardware (Manis and Choi, 2018). Yet, other studies
determined that older users were more likely to buy online (Donthu and Garcia, 1999) or
to purchase smart homes (Shin et al., 2018), and Sorce et al. (2005) found that older
consumers purchased as much as youngsters online. In general, older users are also
reported to be inherently more price-conscious and known to expect value for money in a
purchase when compared to the younger generations (Kumar and Lim, 2008), while
young people value the convenience, information availability and good deals of online
shopping (Yang et al., 2015). Considering online content, Ye et al. (2004) suggest that
older consumers may be more willing to use fee-based online services than younger ones,
while Chyi and Lee (2013) and Punj (2015) concluded that younger people are more
likely to pay for online news, since older people are more used to consume traditional
media content. Also Yang et al. (2015) empirically demonstrated that age is negatively
related to willingness to pay for online content (particularly entertainment content),
mainly due to new media dependency, even though disposable income is lower for young
people. In the context of online music, Weitjers et al. (2014) found that youngsters are
more open to advertising and to the versatility of streaming, while middle-aged adults are
more willing to pay for advertising-free platforms and are more likely to prefer
ownership over access. Given the lack of consistency regarding the impact of age on
online purchases, and the relative absence of studies considering its role in the context of
MSS purchase intention, we hypothesise that:
H8 Purchase intention varies significantly according to age in the context of MSS.
Data was collected through a web-based cross-sectional survey based on a convenience
sample of freemium streaming users, using the free-tier of a self-selected MSS (e.g.,
Spotify, Deezer, Pandora, etc). Measures were established scales from previous studies
(Chu and Lu, 2007; Wang et al., 2013). Three hundred eighteen valid responses were
gathered. The majority of the respondents (61%) was female, aged between 15–24 years
old (76%).
Partial least squares structural equation modelling (PLS-SEM) using the SmartPLS
3.0 software (Henseler et al., 2009) was used to perform the data analysis, as the study’s
primary focus is on the model’s overall predictive capacity or influence on the
endogenous variables (Reinartz et al., 2009), and this modelling technique is well-suited
for assessing complex predictive models (Hair et al., 2012). Furthermore, PLS does not
require data normality (Henseler et al., 2009), and it is less demanding with respect to
sample size (Hair et al., 2011; Zheng et al., 2015). In order to reduce potential common
method variance, we used existing scales and ensured the respondents’ anonymity
(Podsakoff et al., 2012). In addition, we examined common method bias by performing
the Harman’s single-factor test (Harman, 1976; Podsakoff et al., 2003), which
30 T. Fernandes and J. Guerra

demonstrated that none of the factors accounted for the majority of covariance among
items. Finally, the correlation matrix (Table 3) does not indicate any highly correlated
factors, whereas according to Pavlou et al. (2007) evidence of common method bias
should have resulted in extremely high correlations (r > .90). Therefore, we consider
common method bias not to be a serious threat to our analyses. The advocated two-step
procedure of evaluating the measurement (outer) model first, followed by an estimation
of the structural (inner) model was followed (Diamantopoulos and Winklhofer, 2001).

4 Validation of the measurement model

Composite measures of identified factors were unidimensional and demonstrated good

scale reliability according to accepted standards (Nunnaly, 1978). Identified factors
showed strong Cronbach’s alpha (ranging from .59 to .97). Composite reliabilities (CR)
and average variances extracted (AVE) were above recommended minimums of .70 and
.50, respectively (Fornell and Lacker, 1981; Hair et al., 2010), except for ‘technicality’.
However, since AVE was close to .50, it was deemed acceptable to keep the factor
(Table 2).
Table 2 Measurement scales, reliability and dimensionality statistic

Measures Loadings t-value Means CR (AVE)

Technicality (α = .593) 2.498 .766 (.451)
It is not easy to use the music streaming .702 8.218 2.031
service
Learning to use the streaming service is a .635 4.829 2.456
process requiring effort
The music streaming service can be .637 25.490 2.283
accessed instantly (reversed)
It is not easy to get the streaming service to .709 7.793 3.223
do what I want to do
Perceived usefulness (α = .843) 6.015 .888 (.615)
Using the music streaming service helps me .757 20.788 6.217
to access music content more quickly
Using the music streaming service enables .740 28.830 5.465
me to enhance my music appreciation
Using the music streaming service makes it .740 20.143 5.774
easier to get the music information
The music streaming service provides a .830 29.709 6.314
wide variety of music
Overall the streaming service is very useful .837 36.689 6.305
to listen to music
Perceived enjoyment (α = .824) 5.713 .884 (.656)
I have fun interacting with the music .807 27.369 5.456
streaming service
Using the music streaming service provides .836 38.695 5.585
a lot of enjoyment
 Drivers and deterrents of music streaming services purchase intention 31

Table 2 Measurement scales, reliability and dimensionality statistic (continued)

Measures Loadings t-value Means CR (AVE)

Perceived enjoyment (α = .824) 5.713 .884 (.656)
I enjoy using the music streaming service .861 52.517 6.097
Overall, using the music streaming service is .730 21.324 4.960
interesting to me
Perceived value (α = .809) 5.709 .888 (.727)
Compared to the effort I need to put in, the .871 34.556 5.726
use of the music streaming service is
worthwhile for me
Compared to the time I need to spend .914 86.249 5.739
accessing, the use of the music streaming
service is worthwhile for me
Overall, the music streaming service .766 23.239 5.660
delivers me good value
Perceived fee (α = .671) 4.513 811 (.591)
The price to pay to access the paid tier of the .665 10.367 4.613
music streaming service is too high
The price to pay to access the paid tier of the .795 20.036 3.956
music streaming service is not reasonable
Pay to access the paid tier of the music .836 31.545 4.969
streaming service is something that would
not please me
Purchase intention (α = .969) 3.037 .980 (.941)
I would consider to use the paid tier of the .960 132.117 3.267
music streaming service
I would be willing to pay to access the paid .986 473.135 2.984
tier of the music streaming service
In a near future, I would consider purchase .964 171.518 2.858
the access to the music streaming service

Convergent and discriminant validity were demonstrated by factor loadings and by

investigating the latent constructs correlations and the square root of their specific AVE,
respectively. All factor loadings for indicators measuring the same construct were
statistically significant (p < .01), supporting convergent validity. Moreover, estimated
pair-wise correlations between factors:
1 did not exceed 0.85 and were significantly less than one (Bagozzi and Yi, 1988)
2 the square root of AVE for each construct was higher than the correlations between
them (Fornell and Lacker, 1981), thus supporting discriminant validity (Anderson
and Gerbing, 1988).
The only exception was the correlation between ‘PU’ and ‘PE’. However, and provided
the fact that both presented similar figures (.784 to .809), no changes were made. Table 3
shows the means, reliabilities and correlations between the constructs.
32 T. Fernandes and J. Guerra

Table 3 Means, reliabilities and correlations between each construct

Construct Mean Α CR AVE TE PU PE PV PF PI

TE 2.498 .593 .732 .418 .647
PU 6.051 .843 .888 .615 –.607 .784
PE 5.525 .824 .884 .656 –.572 .810 .813
PV 5.709 .809 .888 .727 –.461 .687 .647 .852
PF 4.513 .671 .811 .591 .061 .107 .008 .058 .760
PI 3.037 .969 .980 .941 .006 –.013 .068 .165 –.497 .970
Notes: Diagonals are the square root of AVE of each factor; the remaining figures
represent the correlations.

5 Results of the structural equation model

The analysis of the data kept on with the hypotheses testing. The structural model was
estimated through a bootstrap re-sampling tool in order to determine path significances.
The results (Table 4) indicate that all paths are statistically significant, with the structural
model explaining 36.8% of the variance in PU, 32.7% of PE, 49.6% of PV and 28.5% of
purchase intention.
Results provide support for H1 to H6, with a significant negative effect of technicality
on both PU (β = –.607, t-value = 16.68) and enjoyment (β = –.572, t-value = 12.575),
which in turn positively affect PV (β = .475, t-value = 5.919; and β = .261, t-value
= 3.468, respectively); finally, PV, together with PF had a significant effect on purchase
intention (β = .195, t-value = 4.162; and β = –.509, t-value = 11.226, respectively).
Table 4 H1–H6 testing results according to the structural model

Dependent variable Independent variable Path coefficient t-value Sig. R square

Perceived usefulness Technicality –0.607 16.680 0.000 0.368
Perceived enjoyment Technicality –0.572 12.575 0.000 0.327
Perceived value Perceived usefulness 0.475 5.919 0.000 0.496
Perceived enjoyment 0.261 3.468 0.001
Purchase intention Perceived value 0.195 4.162 0.000 0.285
Perceived fee –0.509 11.266 0.000

To test the remaining hypotheses, we have analysed differences in purchase intention of

MSS according to users’ gender and age. Results shows that differences are statistically
significant for gender (MD = .328; t-value = 2.877; p < .01) and age (MD = –.486;
t-value = –3.757; p < .00). Pairwise comparisons revealed that purchase intention of MSS
is lower for women and for youngsters, aged between 15–25 years old – the so-called
‘digital natives’ (Prensky, 2001) who grew up with digital media, are often early adopters
of new technologies and extensive users of the internet (Kumar and Lim, 2008) – when
compared with men and older users, with more than 26 years old, including not only
young adults but also ‘digital immigrants’ (Prensky, 2001), who though increasingly
dependent and more open to new media, learned digital skills mostly during adulthood
(Yang et al., 2015).
 Drivers and deterrents of music streaming services purchase intention 33

6 Discussion

Recently, new concepts of digital music distribution have been developed. A new type of
business model, such as MSS, now provides content over the internet as a service,
without transferring ownership. Most MSS adopt the freemium model, where services
can be used both for free or with a paid subscription. However, questions arise about
what factors govern the adoption of MSS and the willingness to pay for them. As such,
the aim of this study was to fill a research gap by analysing users’ purchase intention
towards MSS. Based on the TAM and the VAM, a research model was developed,
including drivers such as PU, PE, PV, PF and technicality. The role of age and gender
was also addressed.
As expected, findings show that technicality, or the extent to which a user perceives
the technical complexity of the service, negatively influences PU and PE, which is
consistent with previous findings (e.g., Davis, 1993; Cheong and Park, 2005; Kim et al.,
2007). Although users are increasingly more aware on how to deal with innovative
systems, results suggest that the non-monetary costs brought by the physical and mental
effort to learn can affect their sense of utility and joy. Regarding the impact of PU and PE
on PV, the study concludes that usefulness (and not enjoyment) is the main source of
value to MSS users, which is at odds with previous findings from, e.g., Wang et al.
(2013) and Chu and Lu (2007) regarding online music consumption as a ‘leisure-oriented
activity’ [Wang et al., (2013), p.205]. Results also seem to confirm the conclusions of
Wagner et al. (2014), who concluded that users attitudes towards freemium MSS are
mainly driven by cognition, as well as Chen et al. (2018a) results regarding the
non-significant effect of hedonic performance on attitude towards paid streaming
services, with the ‘fun factor’ only improving the likelihood that free users will continue
to use the free MSS. According to Kim et al. (2007) and Chu and Lu (2007), PU is an
extrinsic, functional and cognitive factor, while PE is an intrinsic, recreational and
affective factor, independent from performance. Similarly, in their study on the intention
to use mobile services, Nysveen et al. (2005) identify utilitarian and non-utilitarian
motivations, with the first associated with core services and including factors such as PU
and quality; and the second associated with value-added services and including factors
such as enjoyment and entertainment. While functional users value core services the
most, emotionally-involved consumers find value-added services more important (Kumar
and Lim, 2008). Given that PV is mainly driven by PU when compared with PE, the
study suggests that consumers (or at least those adopting the free-tier of the service) use
MSS mainly for utilitarian purposes, and may thus be less interested to pay for the
value-added, premium version.
Not surprisingly, results support that both PV (Chu and Lu, 2007, Kim et al., 2007,
Wang et al., 2013, Vock et al., 2013) and PF (Liao and Cheung, 2001, Andersson and
Heinonen, 2002, Cheong and Park, 2005, Lin et al., 2013) are significant predictors of
MSS purchase intention, with the negative impact of the latter surpassing the positive one
of the former. This suggests that, despite finding the service valuable, the fee involved is
the main aspect that influences users’ purchase decision. Nowadays, there are several
alternatives to online content services, and, provided that the costs of change are low and
the customers are willing to change, a possible fee involved can prevent many users of
actually subscribing the service. In fact, purchase intention of respondents included in the
sample – noticeably formed by freemium MSS users, adopting the free-tier of the
34 T. Fernandes and J. Guerra

service – was in average rather low (3.037 in a scale of 1 to 7), suggesting that the
subscription-based model may be unattractive to many consumers, as acknowledged by
Papies et al. (2011).
Finally, the study also concludes that demographic characteristics (namely gender and
age) directly influence users’ willingness to pay for MSS. Regarding gender, results
suggest that men display a higher purchase intent of MSS, which confirms previous
conclusions referring to other types of online content services, namely free-to-play games
(Hamari et al., 2017b), online news (Chyi and Lee, 2013), and online purchasing in
general (e.g., Brown et al., 2003; Chiu et al., 2005). Due to their practical sense, men rate
functionality (a feature very much present in MSS) higher than women (Chiu et al.,
2005), who instead value social factors, trust and subjective norms more (Venkatesh and
Morris, 2010). Following the same line of thought, Punj (2015) concluded that women
would be more likely to pay for online content if it emphasises the social aspect of
information and are thus more likely to value virtual communities. Regarding this matter,
Vock et al. (2013) found a positive association between the social capital of SNS and
users’ willingness to pay for premium services. Social capital is associated with the
relationships between and within groups and is often defined in terms of social trust and
norms (Vock et al., 2013).
In terms of age, results suggest that young users, namely ‘digital natives’, between 15
and 25 years old, exhibit a lower purchase intention of MSS, which confirms previous
conclusions referring to online content (Ye et al., 2004; Weitjers et al., 2014; Punj, 2015),
but is at odds with findings by, e.g., Yang et al. (2015) and Chyi and Lee (2013), though
these did not refer particularly to online music or freemium services. Brands strive to
move young consumers over to subscription-based services, but are failing to attract mass
appeal (Spero and Stone, 2004). The advent of the internet and broadband penetration
have allowed an easy access to online content for free through not only streaming
services, but also peer-to-peer networks and illegal downloads, with the music industry
being particularly affected by digital piracy. Historically, young, college age users are
more likely to have positive attitudes towards music piracy and to practice it when
compared to older individuals (Cesareo and Pastore, 2014; Weitjers et al. 2014). And
though streaming and access-based music services are said to have contributed to reduce
illegal downloads (Papies et al., 2011), with the migration from illegal to legal platforms
becoming the norm (Sinclair and Green, 2016), a deeply entrenched ‘free-lunch’
mentality (Dou, 2004; Ye et al., 2004) remains and leads to the belief that ‘content is
free’ (Li and Cheng, 2014; Pauwels and Weiss, 2008; Yang et al., 2015) and reference
prices of zero (Punj, 2015), particular among the younger, savvy generations (Weitjers
et al., 2014). Conversely, older users may have different reference prices, since these are
formed based on previous experience (Papies et al., 2011) and, for these generations,
content (and in particular music content) was not always available for free. Since
reference prices are an important driver of willingness to pay, this may justify a higher
purchase intention, given that people with a low ‘free mentality’ may believe that
‘sacrifice’ (i.e., paying a price) is necessary to receive appropriate services (Lin et al.,
2013). Moreover, consumers with a low adaptation to advertisements may accept paid
content because they feel more comfortable with online content without adds, while
consumers that have experienced online advertisements for a long period may easily
 Drivers and deterrents of music streaming services purchase intention 35

adapt to it (Li and Cheng, 2014). According to Weitjers et al. (2014), youngsters are more
accustomed and thus more open to advertising than middle-aged adults, and hence older
consumers seem to be less aversive to paying music platforms, not only because the
for-fee version usually offers downloads, but also because it allows them to avoid adds.
Furthermore, according to the same study, although quality is an important driver for the
willingness to pay for music across all age groups, older consumers were the most
represented among the ‘quality seekers’ segment. This may also contribute to a higher
purchase intention of these consumers if they believe that the fee-based version is better
than the free service. Finally, the higher level of income held by older customers may
also contribute to a higher purchase intention, since youngsters’ preference for free music
is mainly driven by economic factors (Weitjers et al., (2014). In order to increase
youngsters’ purchase intention, MSS are advised to emotionally engage them. For young
people, the symbolic meaning of consumption is particularly important (Lee and Yang,
2013). According to Spero and Stone (2004, p.154), a brand will not succeed unless
young people connect with it emotionally and only an ‘emotional difference can
potentially command a premium’. If young users associated a symbolic and affective
value towards MSS, value added services would be more important to them, as concluded
by Kumar and Lim (2008). Though applied to a different context (mobile services), these
authors suggest that youngsters are ‘mobile lovers’ (i.e., emotionally attached consumers)
and that, as such, will likely pay additional charges for value added mobile services, since
they appreciate them more for emotional benefits and social communication than for an
instrumental purpose.

7 Theoretical implications

This study makes several contributions to the literature. Typically, previous studies about
online music consumption mainly dealt with music piracy, file-sharing and illegal
downloading, while there is a dearth of empirical research devoted to the willingness to
pay for freemium access-based online music services. Furthermore, previous research on
(mostly illegal) online music consumption mainly adopted two alternative approaches
(Lin et al., 2013; Weitjers et al., 2014): researchers either studied usage intention and
adoption, or willingness to pay for music. This is one of the few studies combining the
two perspectives in order to examine users’ intention towards paying for legal online
music services (namely MSS) and, in particular, when a readable, free (though restricted)
membership is available. Based on the TAM and on the VAM, we therefore contribute to
the literature by empirically analysing what drives (or deters) users’ intention to purchase
MSS. In particular, since our study was based on a sample of streaming users, using the
free-tier of the service, we were able to examine what drives their intention to switch
from ‘free to fee’. Furthermore, to the best of our knowledge, no prior study has
segmented freemium MSS users in terms of their purchase intention. By analysing
different segments of freemium MSS users according to age and gender, we show how
these differ in their willingness to pay for the for-fee version of the service, contributing
to shed some light on what may predict consumer purchasing behaviour towards MSS
when free alternatives are available.
36 T. Fernandes and J. Guerra

8 Practical implications

Beyond theoretical contributions, the study also suggests several implications to MSS
providers. The challenge of MSS to attract paying subscribers is increasingly difficult:
P2P first and on-demand free music later (including the illegal sector and video
streaming) facilitated the access to music, which is not a scarce content anymore. In order
to mitigate the sense of technicality, a significant deterrent identified in this study, MSS
should provide an easier and flawless experience, through, e.g., an interactive and
user-friendly interface. Moreover, given that PV is mainly driven by PU when compared
with PE, MSS providers are advised to invest in differentiating features, like, e.g., the
quick access to music or the breadth of libraries available, since these seem to play a
more important role than the joy to interact with the system itself. The study also suggests
that the PF involved can prevent users from becoming actual subscribers, even when they
find the service valuable. Therefore, and although authors such as Hamari et al. (2017a)
and Papies et al. (2011) suggest that improving service quality, product features or
catalogue size is unlikely to change this scenario, MSS providers need to consider how to
generate revenue through balancing free and premium components, namely adjusting
different strategies to different market segments (e.g., according to age and gender as
discussed next), since there will always be consumers willing to pay, as long as they are
targeted correctly (Wang et al., 2005).
Moreover, results show a significant contrast regarding consumers’ willingness to pay
for MSS in terms of gender and age, suggesting that providers should implement
segmented strategies. Accordingly, in order to increase women’s higher purchase
proneness, MSS could develop the social capital of their platforms (namely, their
premium version), by, e.g., emphasising group solidarity and the enjoyment of interacting
with others, as well as the social networking and profile display features available
(Sinclair and Green, 2016). Conversely, youngsters were proven to be less willing to pay
for MSS. Given that music contributes to self-identity (Sinclair and Tinson, 2017) and the
symbolic consumption of music is particularly salient for youth, especially aged between
18 and 24 (Larsen et al., 2010), MSS providers should move beyond functionality of the
core service (currently, the main source of PV according to this study), emphasising and
adding other features to the premium version, associated to the social aspects of music
consumption, in order to engage young people emotionally and thus impact their
willingness to pay. Added-value features such as allowing for creating a blog or building
an online social network with like-minded others are likely to meet more
emotional/passionate needs (Lin et al., 2013).

9 Limitations and suggestions for future research

Our study is not without limitations. Data were collected using a convenience sample,
which warrants caution in generalising results. While youngsters are the highest-user
segment of MSS (IFPI, 2017) and thus match the population of interest as acknowledged
by previous studies (e.g., Chen et al., 2018b), the findings of this study should be further
validated, namely including a larger proportion of older consumers in order to provide a
more comprehensive view. Future research is also recommended to examine differences
between other generations, between different ethnic groups, and other socio-demographic
variables, as well as to perform a multi-group comparison to assess whether specific path
 Drivers and deterrents of music streaming services purchase intention 37

coefficients in the model differ significantly among them. A comparative analysis of

different platforms offering MSSs, namely audio (e.g., Spotify) versus video (e.g.,
YouTube) streaming platforms, would be particularly relevant, since according to the
IFPI (2018) video streaming already makes up more than half of on-demand streaming
time. Moreover, only freemium MSS users adopting the free-tier of the service were
surveyed in this study, which might have introduced some bias in the results. Future
studies could be less selective while defining the population of interest and could explore
the differences between users and non-users of MSS, as well as between paying and
non-paying users. Also, a mixed methods approach could not only capture richer data but
also lead to a stronger contribution. Furthermore, and considering the relatively low
explained variance in MSS purchase intention, other predictors could have been
considered, such as prior usage, the duration of membership, individual level of tolerance
to advertising, preference for digital devices, general interest in music, users’ income and
free mentality/price sensitivity. Since the kind of value perceived by streaming users was
not specified in the questionnaire (e.g., quality, convenience; social capital), future
studies could analyse what attributes do streaming users value the most and if this
changes according to age or gender. Moreover, and as suggested by Weitjers et al.
(2014), another recommendation for future research could be to study not only the direct
cost of music (namely, PF), but also the psychological cost associated to the exposure to
advertising. Another avenue for future research could be to incorporate the impact of
perceived critical mass (i.e., the degree to which a person believes that most of his or her
peers are using the system) on the usability aspect of MSS considered in the model, as
suggested by Chen et al. (2018a). Finally, though the study is developed in a specific
context (MSS), we believe these findings can be adapted to other online content services
based on the freemium revenue model and provide a ‘starting point’ that future research
should extend and further refine.

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