The Effect of Price Perception and Electronic Word of Mouth on the Purchase Intention of Spotify Premium Service in Surabaya City

This research aimed to investigate the effect of price perception and electronic word of mouth on the purchase intention of Spotify Premium services in Surabaya City. This research employed a quantitative method and involved a sample of 90 respondents, determined using Ghozali's sampling guidelines. The population for this study comprised Spotify users in Surabaya City, while the sample was selected through purposive sampling, consisting of respondents who had previously seen offers for Spotify Premium packages. Both primary and secondary data were used in this study. The data analysis technique employed for this research was Partial Least Squares (PLS) with validity tests, reliability tests, and hypothesis tests. The findings of this study revealed a significant and positive effect of price perception on purchase intention. Additionally, the second research result indicated that electronic word of mouth also had a positive and significant effect on purchase intention.


INTRODUCTION
The current lifestyle changes have led to an increased mobility of people using the internet.The Ministry of Communication and Information Technology (Kominfo) stated that the growth of internet users in Indonesia reached 213 million people in 2023, a 3.85% increase from the previous year.In 2022, there were 205 million internet users in Indonesia.
The rapid development of the internet has had a significant impact on how society enjoys music.Nowadays, the way people listen to music has shifted from analog players to digital or streaming methods.Music streaming applications enable users to enjoy music anytime and anywhere.Users can create playlists and select music genres according to their preferences.Presently, the trend of listening to songs through music streaming services is popular both internationally and in Indonesia.Many music listeners have switched from downloading mp3 files to using music streaming services due to the perceived convenience.Listeners no longer need to download the music they want to hear on their smartphones; they can simply click on the desired music through the music streaming app.Most music streaming apps are accessible across various platforms, such as PCs, smartphones, and tablets, making it easy to carry your favorite music wherever and whenever.In response to this trend, music streaming service providers compete to create mobile-friendly and top-notch applications.This becomes a crucial factor for individuals when choosing which music streaming platform to use (Masdaner & Ruliana, 2021).
In Indonesia, there are various music streaming applications, both domestically and internationally developed.Some of these applications include Spotify, Apple Music, SoundCloud, Youtube Music, Deezer, JOOX, Guvera, Langit Musik, and others.The proliferation of music streaming apps in the Indonesian market indicates significant growth in the music streaming industry.
One of the prominent platforms in the digital music streaming realm is Spotify.It was founded in 2006 in Stockholm, Sweden, and entered Indonesia on March 30, 2016.Spotify serves as a digital copyright provider for the uploaded music, ensuring that the songs available are official and allowing users to enjoy a comprehensive and legitimate music collection.Spotify allows users to listen to music from various music genres and artists, both local and international.Spotify offers two subscription models: free and premium.Users with the free subscription receive a different service level than premium subscribers.Spotify Premium users enjoy full access, an ad-free experience, enhanced audio quality, and the ability to download music for offline enjoyment without using data.The full access includes the freedom to choose and listen to any song from a vast library of 70 million tracks.On the other hand, Spotify's free service does not provide these features.To boost their business revenue, Spotify actively encourages free users to subscribe to the premium service through various promotions and discounts.The premium features are deemed advantageous over the non-premium service.Users can obtain these premium features by subscribing on a monthly basis.
Source: Statista processed, 2023 (Statistics processed) Based on Figure 1, in the fourth quarter of 2022, Spotify, the music streaming service, reported a net operational loss of 231 million euros.This amount increased by 2% compared to the third quarter of 2022.However, in the same period in 2021, during the fourth quarter, Spotify only incurred a loss of approximately 7 million euros, which is significantly lower, around 95%, compared to the fourth quarter of 2022.Spotify has been reporting losses in each quarter, gradually increasing from year to year.This sharp increase in the loss indicates a lack of interest in subscribing to Spotify Premium services.
Perception of price plays two crucial roles in the decision-making process of buyers when purchasing a product or service: the allocation role and the signaling role.Price is an essential consideration for consumers before making a purchase.It represents the amount of money required to acquire a combination of products and services (Prastyo et al., 2018).
Based on this, consumers determine their interest in making purchase decisions for specific products or services, which can shape their buying behavior (Yudha & Tricahyono, 2021).Purchase intention can also arise due to the effect of others or when a consumer finds various information about the product/service appealing (Chan, 2020).
The widespread availability of internet technology worldwide has given rise to another form of word-of-mouth communication that is less personal but omnipresent, known as electronic word of mouth (Masdaner & Ruliana, 2021).Electronic word of mouth represents communication from mouth to mouth to boost sales and awareness of a particular product.Consumers tend to talk about and recommend a product or service if they are satisfied with it.Recommendations from friends or family are more readily accepted compared to advertisements or salespersons because they are based on personal experiences or previous purchases (Liswandany, 2022).E-WOM, which is a part of marketing communication, is crucial in spreading compelling and positive testimonials.Consumers tend to read online reviews before using an application and subsequently upload reviews based on their experiences after using the application.This demonstrates how positive electronic word of mouth can shape perceptions and encourage the usage of an application.

THEORETICAL REVIEW The Relationship Between Price Perception and Purchase Intention
Price perception refers to how a customer or consumer views a certain price (high, low, reasonable) and its strong effect on their interest in making a purchase.This is consistent with research conducted by Aditya & Immanuel (2019), which showed that price perception has a positive and significant impact on purchase intention.Another study by Japarianto & Adelia (2020) also revealed that price perception significantly affects purchase intention due to the consumers' ability to buy a product.
Based on Andriani's research (2022), it is stated that price perception has a significant positive impact on online purchase intention during the pandemic.Other research findings also prove that price perception positively affects purchase intention, where high purchase intention can be formed by the presence of attractive prices offered by service or product providers.Gultom et al. ( 2020) concluded that price perception positively affects purchase intention.H1: It is hypothesized that price perception positively affects the purchase intention of Spotify Premium service

The Relationship Between Electronic Word Of Mouth and Purchase Intention
Electronic Word Of Mouth (E-WOM) is a trusted source of information on the internet because it is non-commercial and based on the experiences of other users, making the information honest.Consumers are becoming more active in utilizing E-WOM to seek information about products.Consumer perceptions of product descriptions and purchase intentions are affected by information gathered from various online media sources.Recommendations and reviews given by other consumers have a significant impact, as stories and experiences of using a product are more compelling and can affect their views on trying the product.
According to the study conducted by Abir et al. ( 2020), E-WOM has a positive and significant impact and significantly affects consumer purchase intentions.Similarly, the research by Iswara & Santika (2019) stated that E-WOM has a positive effect on purchase intention.Another study by Naufal & Sari (2017) showed that E-WOM has a positive impact on consumer purchase intentions.Purchase intention is a consumer behavior where they have a desire to buy or select a product based on their experiences in choosing, using, consuming, or even desiring a product.H1: It is suspected that price perception has positive effects on the purchase intention of Spotify Premium service.
Based on the review of the theoretical framework and previous research, a research framework can be formulated and presented as follows.

METHODOLOGY
This research employed a quantitative approach with the population consisting of Spotify users residing in Surabaya City.The sample for the study comprised 90 respondents.The data analysis technique involved nonprobability sampling through the purposive sampling method.The determination of the sample size utilized Ghozali's formula (2016) due to the uncertain exact population size.The research instrument employed was a questionnaire designed using Google Forms, which enabled the measurement of each question's weight across all variables using the Partial Least Squares (PLS) analysis.The scale used for measuring the indicators ranged from 1 to 5 on a Likert scale.

Description of Research Results and Discussion
The data obtained in this research are based on the responses provided by the 90 respondents to 9 questions in the questionnaire.The respondents completed the questionnaire in its entirety, following the instructions provided.

Description of Respondent Characteristics Based on Gender
Based on the results obtained from distributing the questionnaire to 90 respondents, the characteristics of the respondents based on gender are as follows: Table 1

PLS Model Analysis Figure 3. Path Diagram of PLS Output Results
Source: Primary Data Processed, 2023 The tested Average Variance Extracted (AVE) results for the variables Price Perception (X1) yielded a value of 0.669, for the variable Electronic Word Of Mouth (X2) yielded a value of 0.693, and for the variable Purchase Intention (Y) yielded a value of 0.799.All three variables indicated values greater than 0.5, indicating that overall, the variables in this study can be considered to have good validity.
These research findings align with the study conducted by Aditya & Immanuel (2019), which found that price perception has a positive and significant effect on purchase intention.Consistent with the research conducted by Andriani (2022), it is revealed that price perception has a significant positive impact on purchase intention.

The Effect of Electronic Word of Mouth on Purchase Intention
Based on the research findings, it was found that electronic word of mouth contributed to the purchase intention of Spotify Premium services and was well-received.With the accepted hypotheses, it indicates that there is a relationship between electronic word of mouth and purchase intention.In this case, electronic word of mouth has a strong direct effect on purchase intention, as it plays a role in increasing popularity, and consumers can read product recommendations online, leading to a high likelihood of generating purchase interest that may shape purchasing decisions.
From the analysis results, it was evident that the intensity of electronic word of mouth had the most significant impact on purchase intention.This condition suggested that the higher the intensity of viewing offers for Spotify Premium services, the more likely it was to stimulate consumer purchase interest.
The results of this research align with the study conducted by Abir et al. ( 2020), which found a positive and significant effect of electronic word of mouth on purchase intention.Consistent with the study carried out by Rahmi & Rizki (2018), it revealed that electronic word of mouth significantly and positively affects purchase intention.

CONCLUSIONS AND RECOMMENDATIONS
Based on the testing results using PLS analysis, it can be concluded that Price Perception contributes to the purchase intention of Spotify Premium service in Surabaya City.This proves that the better the consumers' price perception of a product, the higher their intention to purchase it.The expensiveness or affordability of a product is determined individually, and it may vary depending on individual perceptions of the environment and personal conditions.Electronic Word Of Mouth (E-WOM) contributes to the purchase intention of Spotify Premium service in Surabaya City.This demonstrates that the level of consumer trust directly affects their purchase intention.Starting from trust, consumers are more likely to recommend a product to others, which increases the interest of other individuals in purchasing the product as well.

FURTHER STUDY
This study has shortcomings and limitations that need to be to be improved in future research.As a consideration in future research, it is suggested that other factors that have not been examined in this study should be sought.Have not been examined in this study which are thought to affect relationship to purchase intention in consumers, for example, customer loyalty,

Figure 1 .
Figure 1.Net Loss Graph of Spotify Premium for the Years 2020-2022 results and discussion are as follows: a.The first indicator of Purchase Intent was transactional interest.It was evident from the respondents' responses that the majority (37 respondents or 41.1%) chose a score of 4. Therefore, based on the responses, most of the respondents agreed.b.The second indicator of Purchase Intent was referential interest.It was evident from the respondents' responses that the majority (23 respondents or 25.6%) chose a score of 5. Therefore, based on the responses, most of the respondents agreed.c.The third indicator of Purchase Intent was preferential interest.It was evident from the respondents' responses that the majority (24 respondents or 26.7%) chose a score of 5. Therefore, based on the responses, most of the respondents agreed.

Figure 2. Conceptual Framework Description of Respondents' Characteristics Based on Age
Based on the table above, from the questionnaire distribution results, it can be observed that the majority of respondents who have seen the offer of Spotify Premium service package are male.Based on the results obtained from distributing questionnaires to 90 respondents, the characteristics of the respondents based on age are as follows: Based on the table above, it was observed that the characteristics of respondents based on age indicated that the majority of users who had seen offers for the Spotify Premium package were aged between 22 and 26 years, comprising 54 individuals.

Table 3 . Frequency of Respondents' Answers on Price Perception
The second indicator of Price Perception was discounted.It was evident from the respondents' responses that the majority of them chose a score of 4, which accounted for 39 respondents or 43.3%.Therefore, based on the responses, most of the respondents agreed that discounts were offered.c.The third indicator of Price Perception was the price's suitability with the service quality.It was evident from the respondents' responses that the majority of them chose a score of 4, which accounted for 47 respondents or 52.2%.Therefore, based on the responses, most of the respondents agreed that the price was suitable for the service quality.

Table 4 . Respondents' Frequency of Answers Regarding Electronic Word Of Mouth
Based on the data in the table, the results and discussion are as follows: a.The first indicator of Electronic Word Of Mouth was intensity.It was known from the respondents' responses that the majority (35 respondents or 38.9%) chose a score of 4. Therefore, based on the responses, most of the respondents agreed.b.The second indicator of Electronic Word Of Mouth was content.It was known from the respondents' responses that the majority (35 respondents or 38.9%) chose a score of 4. Therefore, based on the responses, most of the respondents agreed.c.The third indicator of Electronic Word Of Mouth was the valence of opinion.It was known from the respondents' responses that the majority (41 respondents or 45.6%) chose a score of 4. Therefore, based on the responses, most of the respondents agreed.
Source: Processed Primary Data, 2023 Based on the data in the table, the

Variance Extracted Table 7. Average Variance Extracted Variable Average Variance Extracted (AVE)
Based on the table of outer loadings above, all reflective indicators on the variables Perception of Price (X1), Electronic Word of Mouth (X2), and Interest (Y) have shown factor loadings (original sample) greater than 0.50 and/or T-Statistic values that exceeded the critical value Z α = 0.05 (5%) = 1.96.As a result, the estimation results for all indicators have met the criteria for Convergent validity, indicating good validity.Factor loading represents the correlation between the indicators and the variable, and if it exceeds 0.5, it is considered to meet the validity criteria.Similarly, if the T-Statistic value exceeds 1.96, its significance is also met.