Digital Music Distribution: Streaming services are a source of income for the music industry: a study on consumer’s behaviour and new business models

Abstract

The technological environment has always influenced the music industry, since the final product is a matter of format. New forms of music distribution have surfaced over the years, helped by the technological progress in which Internet has played a major role. This paper explores how these innovations have modified the music context, from the supply chain to the consumer’s behaviour. Record labels no longer dominate the industry, because more actors are involved in the process. Direct and co-creational marketing helps record labels and artists to communicate with customers, and thanks to social media build a relationship with fans has never been so easy. Music’s distribution is entrusted to digital music providers and streaming services that are having positive results on music sales and are slowly overcoming the piracy phenomenon. The Swedish streaming service, Spotify, has quickly gained market share in the last two years, proving to be a source of income for the Scandinavian music industry. The paper also provides an empirical analysis of consumers’ behaviour towards Spotify.