Price Elasticity and Strategic Pricing in Music-Streaming Platforms

In the digital age, digital platforms have gradually replaced traditional consumption patterns and become an essential part of daily consumption. The emergence of new consumption has reshaped the way consumers access services and altered the factors influencing consumption decisions. This change is particularly apparent in streaming or cultural consumption, with strong personalized features. This study investigates consumer demand for Spotify, Apple Music, Tencent Music, and NetEase Cloud Music, focusing on the impact of subscription price, differences among various consumer groups, and strategic competition between platforms. Using quarterly panel data from 2021 to 2025, this paper employs a log-log regression model to estimate price elasticity. The result show the estimated values, -0.062 (Apple Music), +0.051 (Spotify), -0.125 (Tencent Music), and +2.002 (NetEase Cloud Music). Only Tencent Music's result is statistically significant at the 5% level. Interactions effects within user groups further show that the 2020-21 user groups of Apple Music (-0.145) and Tencent Music (-0.190) are the most price-sensitive. When cohort price elasticities are incorporated into a constrained constant-elasticity revenue model, all four platforms price reach the upper testing price limit. A Bertrand-style competition model then produces constrained equilibrium prices of $13.19 (Spotify and Apple Music), $2.52 (Tencent Music), and $1.44 (NetEase Cloud Music). The results indicate that cohort heterogeneity matters for demand responses, but weak estimated price sensitivity causes the strategic models to favor higher prices within the tested range.