Consumer Behavior and Music
As the presence of the internet becomes more predominant as an everyday activity in people’s lives, the way consumers access, select, buy and listen to music continues to evolve, being the likely cause of the fall of the traditional record industry (Barfed, 2004). One key aspect that Is Influencing these changes Is technology.Technology has been a major characteristic of the music industry throughout the last century as to how music has been and is being accessed: from acoustic, through electronic to digital recording techniques, going through vinyl, tape and CDC (Murray, 2012). However, the emergence of the Internet has created a new channel of music provision (Deliver and King, 2012) that enables individuals accessing and downloading music files more easily and efficiently (Besotted et al. 2005). Therefore the music industry Is a marketplace that is in transition from physical to digital (Barnes, 2009).
Although we already find an established online music retail market, given the large illegal activity, in the form of digital music piracy that took place through the peer-to- peer websites (Deliver and King, 2012), and streaming sites (Moravia TV, 2009), the USIA industry has seen the Internet as a threat to the business (Sunken and Mall. 2007).Consumers, on the other hand, have been fast in adopting the new tools of exchanging music via the internet with file-sharing platforms such as Anapest and Aziza that quickly emerged allowing users to exchange digital music with one click (Sunken and Maim, 2007). While the industry placed most of the efforts in trying to reduce the illegal usage of the internet, by placing law suits against the most popular platforms such as Megalopolis (Molar’s TV, 2009), the steadily Increasing number of nonusers became more accustomed to download music for free (Walsh et al. , 2003).The growth in file-swapping systems forced the industry to readdress how it will derive its future revenue streams (Mêlées and Sullivan. 2002) In the face of the decrease in global CD sales (Edison Media Research, 2002).
Additionally, other non- traditional competitors such as Apple and Microsoft also became present in the Industry (Sunken and Mat, 2007) with electronic music players such as the pod, which engaged a younger generation of consumers who saw in these devices a trendy and seasonable item, which also implied new patterns of music consumption (Sunken and Mat, 2007).With music consumption as strong as ever, and even more so in the form of streaming (Angled, 2013), the popular saying that “the genie is now out of the bottle” is even more valid as eliminating such services will have little impact in the overall business (Hansen et. Al. , 2000). However, the appearance of a wide range of compelling products out there, such as Spottily, Pandora or Sonata, that are free and catering for its users, are getting consumers hooked and even transforming them Into paying customers when they were Initially “stealing” (Parks, 2013).As consumers are looking for ways to maximize the utility and benefits that come also time and energy spent (Deliver and King, 2012), the internet has become a preferred platform that adapts to these needs. As the Chief Content Officer of Spottily, Ken Parks (2012), explained during the panel on “The Future for the Music Industry’ at the Creative Content Summit, due to the diverse platforms available through the internet, consumers have experienced music at a speed of light, and having tried this, will not want to stop.
He also explained that companies and artists need to find a model that adapts to this new behavior and that only those business models which do not force users to change how they consume music, but look at Nat they are doing and satisfy those needs, will become successful. Nile any change in music format presents a significant challenge to the industry and consumers alike, as stated by Sunken and Maim (2007), the research suggests there are a wide range of motivations, such as novelty seeking, experimentation, Impulsiveness and playfulness, which influence consumers’ adoption of new reduces or services (Hiroshima, 1980; Littler, 2001).Nile traditionally users discovered music either through the radio or from friends, and only consumed through album purchases, users are now increasingly experience music through social media, and consume digital versions of songs and albums. New social media driven by user-generated content is starting to displace traditional forms of media distribution. Social media is increasingly used for sharing information about the artist, music albums and song, and also for the sharing of the music itself paean and Armadas, 2012).This social component about music plays an important role and acts as a resource through which people make sense of a place and its social reality (Sarnia, 2011). These dynamics are not only shifting the consumer behavior but also impacting the size and shape of music sales (Dean and Armadas, 2012).
Ere music industry has experienced a turning point driven by the Internet’s distribution of music as a digital good, having substantial impacts on the players in the traditional recorded music value chain (Besotted, et al. , 2004).The internet and digital technologies have not only changed how music is consumed, but also strutted, and therefore the whole music market structure. Fast broadband internet connections, new audio formats, and smartness with the possibility of storing large amounts of data, have provided consumers with unlimited room for Choice and changed the way they listen to music (Sunken and Mat, 2007). However, Ninth the advent of digital music formats, there are many opportunities for changes in the recorded music distribution value chain (Besotted, et al. 2004). Besotted, Kauffman and Rigging (2004) also argue that digital music is reproducible at a nearly ere cost, which leads to a lowering of distribution costs in comparison to physical formats.
With this change, new opportunities arise for artists to avoid production costs of physical CDC and bypass royalty contracts. In addition, consumers also obtaining before. Digital music is already gaining ground to the physical format music: the digital music industry revenue for 2012 was estimated at USED 5. Billion (9% increase from 2011), which accounts for a 34% of total industry revenues (IF, 2013). Big music labels are therefore experiencing a gradual decrease of control levels over the distribution and artists. As exemplified by Sunken and Maim (2007), a music band named Arctic Monkeys managed to distribute their music in an independent manner via the Internet without any support from big labels. These structural changes of the value chain could potentially have a broader impact on the distribution of profits within the industry.
Digital music is a format with low costs of reproduction and transfer, it is portable and easy to store, and allows for individual tracks to be sampled and remixed into new creations. For these reasons, it is subject to significant Intellectual Property (P) eight concerns (Besotted, et. Al. , 2004). However, these traits of digital products facilitate the widespread and often illegal distribution worldwide. (Copal, et. Al.
, 2006). Though IP rights are considered as a base for all business models across industries, they must adapt to the changing environment, and evaluated in light of their performance.However, the existing laws and measures regarding IP in the music industry, and the measures being taken to ensure they are being exercised, have proved to be inefficient (Lempel, et. Al. , 2007). Lempel, Ball and Shah (2007) infirm that activities such as online distribution and sales, increasing visibility and momentum through concerts and events or promoting online communities are examples of how the industry is starting to adapt to the new environment and improve its performance. They conclude that the emergence of these practices are a first step towards fighting piracy and strengthen IP rights.
In this regard, the “2016: La Revolution Musical” film goes a step forward by predicting that in the upcoming years, artists’ IP rights should be limited to five years in order to encourage creativity ND innovation (Claque Final, 2011). With Minute studies foreseeing that the digital music industry will offset the decline of the CD market, and the positive predictions and data demonstrating the opportunity for growth for paid-for downloads market (Sunken and Mat, 2007), the music industry has the opportunity to offer new products and services that will adapt the new consumer’s behaviors and practices.These companies are reinventing how to consume music founding their services in already established practices, but built into new technologies to expand new ways of making money (Murray, 2013). While the industry success will still be heavily dependent on digital sales and concert tickets (Lynch, et. Al. , 2009), focus on new services with increased online interaction will be also important.As the Chairman and Founder of Beggars Group, Martin Mills, argued during the Creative Content Summit (2012), music video streaming services, such as Youth or Bimbo, Internet radios, radio on demand platforms, are Just a few examples of new services that not only allow for interaction, but have reach and power.
These new platforms are focusing all their efforts into creating a pull rather Han the traditional push strategy, in a very subtle way.Additionally, as consumers customization and increased level of involvement will also become key aspects of new services (Lynch, t. Al. , 2009). In regards to new models for the music industry, as per a CNN interview with Malcolm Dunbar, Director of Pledge Music (2013), artists will have more choices on how to finance their projects thanks to the appearance of Crowd funding platforms. He argues that with the shift of the industry due to the internet and social networks, there is a clear reduction of labels, and artists must find alternative financing models or their music.