A Study on Business Model of Internet-Based Artist Virtual Stock Market
Date Issued
2008
Date
2008
Author(s)
Lin, Yen-Chun
Abstract
The Iowa Electronic Market （IEM）successfully predicted the outcome of the U.S. presidential election in 1988, which result attracted a great attention from the public and subsequent academic research on the merit and structure of developing virtual stock markets (VSMs）. In addition to event, the underlying assets of such a VSM can be athletes, artists or any new products. Despite of a high research interest, little attention has been paid on the feasibility of business models of VSM, which motivate this thesis research. In addition, due to the increasing popularity of digital music, the music industry faced a sever sales decline in the past ten years and talent singers have to create their own market value through becoming performing artists. Therefore, a market in which an individual artist can be objectively evaluated would be critical to a positive development of the ecosystem of the music industry.ulding upon these two drivers, the present research is to undertake a case-based research on a newly created, internet-based artist VSM, Startsdaq, by comparing other VSMs and defining its business model. The artists can be ranked based on the frequency and impact of downloaded songs in the internet, karaokis, CD, concert and movie ticket sales, the frequencey of media exposure, the size of fan club membership, and te number of google search returns and television appearances. Based on Henry Chesbrough’s suggestion of business model and Brandenburger and Nalebuff’s insight on value net, we identify five key factors as essential to a successful VSM. These five key factors include the first mover advantage, heavy and steady traffic volume, relying upon advertisement and other added services as profit source, game design attractiveness, and website online community. Finally, we conclude that charging participants is a feasible way to run VSMs. But the fee structure should be linked to other strategies, such as enhancing participants’ motivation, website reputation, and strategy alliances, among others.
Subjects
Virtual Stock Market
Business Model
Artist Valuation
Type
thesis
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