The impact of electronic word-of-mouth in the distribution of digital goods

The rapid proliferation of social media networks has presented a platform of opportunities for the distribution of digital products and related applications. This is commonly known as wordof-mouth or viral marketing and intuitively fits the requirements of digital goods in that consumption, authentication and opinions are communal. In this short paper, we point out the efficacy of the phenomenon of electronic word-of-mouth (eWoM) in digital markets. More specifically, we use a model that encapsulates our understanding of how eWoM impacts economic and social activities that influence co-consumption. An empirical study of a typical example of digital products – music albums – was conducted to test the fundamental premises of our framework and derive qualitative findings. Drawing on the results, we attempt to refine a prescriptive framework for eWoM in general. This is part of an on-going study of the distribution channels for digital media and how they may be effectively designed. Given the proliferation of the Internet and the complementary nature of social networks, we believe that context sensitive eWoM is a key aspect of digital distribution.