Consumer Piracy Risk: Conceptualization and Measurement in Music Sharing

Bong-Keun Jeong, Kexin Zhao, and Moutaz Khouja
International Journal of Electronic Commerce,
Volume 16, Number 3, Spring 2012, pp. 89-118.

Abstract: Several theoretical models have been proposed to explain consumers’ ethical decision-making process in the context of piracy; however, there is limited understanding of various risks involved in online music piracy. By integrating the literature on consumer choice, technology adoption, and piracy, we conceptualize consumers’ perceived piracy risk as a second-order construct formed by seven subconstructs. Later, our empirical analysis suggests that these seven subconstructs converge into five distinct components in the context of digital music piracy: moral awareness, monetary loss, performance, time, and privacy risk. We find that moral awareness risk is the key determinant of consumer piracy risk. Furthermore, we investigate whether the amount of content pirated by consumers affects their perception of piracy risk. Our analysis indicates that consumers’ perceived piracy risk cost does not increase with the amount of content pirated, suggesting that a consumer’s piracy risk cost is fixed. However, the relative importance of privacy and monetary loss risk components in determining the overall piracy risk increases when consumers download more songs illegally. Our proposed measure enables researchers and practitioners to quantify risk and provides novel insights into pricing and piracy control strategies.

Key Words and Phrases: Consumer piracy risk, multifaceted measurement model, music piracy, pirated content.