| Summary: | Purpose: The purpose of this research is to evaluate the usage behaviour of legal and illegal digital music services on the internet and derive a theoretical model that includes the determinants for these behaviours. Based on this model, hidden heterogeneity will be examined amongst the sample population to extract different user-groups with similar attitudes, perceptions and behaviours and to derive and describe these different customer segments of digital music consumers. Design/methodology/approach: A theoretical framework has been developed through a synthesis of the Theory of Planned Behaviour (TPB), Unified Theory of Usage and Acceptance of Technology (UTAUT) and ethical decision making theories. A structured self- completion online-questionnaire has been conducted in Germany and Partial Least Square Structural Equation Modelling (PLS-SEM) has been applied to analyse and validate the theoretical model. Hidden heterogeneity has been analysed using the Finite Mixture (FIMIX) algorithm for PLS-SEM to derive three different customer segments amongst the sample population. Findings: The cause-and-effect model has been proven valid and has revealed the most important antecedents of the usage of legal vs. illegal digital music services on the internet: performance expectancy, facilitating conditions, habit and usage behaviour, perceived risks and benefits, and attitudes including moral and ethical considerations. Besides this, three different segments of customers have been identified, which show different values, opinions and behaviours with the other segments, but homogeneous within the segments. The segments are: Legal Power-Users, Digital Laggards and Young Indifferents. Practical implications: The cause-and-effect model and the three customer segments inform practice for a better understanding of the digital music customer and provide important inputs for the development of new products and services, positioning of the services and communication strategies for current and future services as well as policy makers. Originality/value: Two research gaps have been closed: (1) newer legal digital music services have hardly been examined in the literature and (2) only student samples have been used in digital piracy studies. This study is the first to fill both gaps in expanding the scope explicitly to legal vs. illegal services and to a sample population beyond students. The synthesis of theoretical models to a more comprehensive model to understand the usage and determinants of digital music services has been created. The identification of the three customer segments with the FIMIX algorithm and their real-life description is a contribution to practice, knowledge and methodology. Additionally the research shows, that the evaluation of hidden heterogeneity enriches the pure SEM-analysis, has even improved the evaluation of the overall model and should be a new standard for future SEM-research.
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