Technology and Transformation
The advancement of the music industry over the last decade has been influenced by technological evolution and innovation. The technology has replaced traditional ways of music production, distribution, and promotion with more efficient and effective ways, which are not only cost friendly, but also convenient. Thus, innovation drives music. Technological evolution has changed the manner in which people listen to their favorite songs, select their music, and interact with music. For example, Apple Store provides a distribution platform for music (iTunes), while social media platforms such as You Tube share music. Justin Bieber, a pop star was discovered via YouTube and he not only became established musician, but also a top-?selling artist (Northeastern University, 2012). Technological innovations such as streaming services have improved the manner in which music is consumed. In addition, advances in technology have made it easier to create, record, and distribute music to millions of listeners across the globe. Because of the technological advancements, artists can record their music and work with other musicians through the use of the web (Kassaras, 2002). The paper explores Spotify which is a disruptive technological innovation and its effect on the consumption of music.
Technological Innovation in Music Industry
Before exploring the streaming services in depth, the first attempt is to briefly discuss the history of digital music industry. Music digitization was initiated in 1983 when the compact disc (CD) was incepted. In early 1990’s, the MP3 format was the introduced in the market (Swanson & Herzig, 2013). The MP3 format enabled downloading and sending music files via email on the online platform. Subsequently, it became possible to share and make music portable. Napster was introduced in 1999, and it allowed people to have access to music for free, whenever and wherever they wanted it. In 2001, the iPod was launched by Apple, and this was followed by iTunes two years later. Rhapsody was established in 2002 and this on-demand music streaming service allowed subscription of digital music. In 2005, Pandora was launched and it allowed streaming of music on the internet platform. Between 2007 and 2010, other on-demand music subscription services such as MOG, Spotify, Deezer and Rdio emerged (Swanson & Herzig, 2013). As technology continues to advance, disruptive technologies for music streaming are also expected to emerge. Nonetheless, piracy of music remains as a major challenge and this result from the effect of most of these technological innovations.
Spotify is described by Willings (2016) as “a digital music streaming service that gives you access to millions of songs, podcasts and videos from artists all over the world” (p. 1). Thus, Spotify which is disruptive innovation is a commercial music streaming service that provides music content across the globe. Established by Daniel Ek in October 2008, the technology was first applied in the Europe before it was later launched in the United States (U.S) in 2011 (Swanson, 2013). Like iTunes, Spotify allows consumers to have access to all the music across the globe. Since it was incepted in 2008, Spotify has experienced an increase in users subscription. For instance, the service has more than 20 million, whereby 5 million of them pay monthly subscription of between $4.99 and $9.99 (Swanson & Herzig, 2013). Spotify like any other popular downloading service was developed to replace iTunes. In the United States, Spotify provides three accounts: Spotify Premium, Spotify Unlimited, and Spotify Free. Spotify allow consumers to use their mobile devices as well as offline access to their playlists.
The consumption of music can be explained through the theory of planned behavior. Ajzen (1991) pointed out intentions to undertake certain behaviors are predicted from attitudes, perceived behavioral control, and subjective norms. Attitudes are influenced by personal views towards a particular object, whereas social norms imply to perceived social pressures. On the other hand, the attitude functional theory assumes that persons are motivated to fulfill utilitarian, ego-defensive, and value-expressive functions (Cammaerts & Anstead, 2011). Kinnally, Lacayo, McClung, and Sapolsky (2008) utilized the theory to evaluate motivations behind music download by college students. The results suggested that students download music files because the process is convenient and an entertaining way to acquisition of music. Moreover, entertainment/pass time, economic utility or convenience, and information-seeking factors as well as experience were factors which compelled students to download music and build a library of music based on one's preferences (Kinnally et al., 2008). Downloading music is cost effective because it is free and no is charged.
Cronan and Al-Rafee (2008) established that the intentions to pirate digital content were influenced by their attitudes towards perceived risk, intellectual property, and previous behavior. After combining both social identity theory and theory of planned behavior Wang, Chen, Yang, and Farn (2009) established that the intents to download pirated music was not inked to the intention to buy music stored in a physical format. With reference to Spotify, the technology has increased the ability to have access to music on the online platform. For instance, Cammaerts (2011) established people who used Spotify to stream music (76.5%) reported being satisfied with the service. The consumption of music via Spotify has increased the consumption of music among people across the globe.
Effects of Spotify on Consumption of Music
Music streaming services such as Spotify offer consumers with online access to a widespread database of music via both a smartphone application and a web browser. Thus, this disruptive technology has improved the manner in which consumers can download songs and use them for offline access (Mangan, 2015). Other than providing convenience which is an attribute of the planned behavior theory, Spotify has also ensured that consumer can have access to free music. Therefore, Spotify has changed the manner in which people can have access and consume music. For example, other than having music being streamed online, the platform can be used to download and store music of preference. Spotify allow the hoarding of music files, especially singles songs albums of the preferred the recording artist. A subscriber to Spotify can download and have a music collection that is based on personal preferences. By having a platform that provide services that satisfy these preferences, the effect on customers is great, and this increases the willingness to pay for it. Consumers pay for Spotify services because they perceive that the services offered are better (Ye, Zhang, Nguyen, & Chiu, 2004).
Spotify has more than 60 million users who share music with friends based on their choices. Thus, from a consumer perspective, “Spotify makes it easier than ever to discover, manage and share music with your friends, while making sure that artists get a fair deal” (Aguiar & Waldfogel, 2015, p. 6). Based on the theory of planned behavior, the concept of streaming services, sharing, and managing music with friends and colleagues ensure that a form of terrestrial radio stations is formed. Subsequently, people with same choices of music can listen and satisfy their intentions. Moreover, compared to iTunes, Spotify allows the consumer to subscribe and have access to every song across the globe. The ability to access music via offline and mobile devices and smartphones has ensured that consumers own the kind of music they would like to listen (Aguiar & Waldfogel, 2015). To the consumers, Spotify has increased consumption of music because of portability, ease to use, and inexpensiveness of this streaming service. Lastly, Spotify allows consumers to consume unlimited music and videos for a given fee.
As technology advances, music has become more interactive, and this has ensured that the needs and habits of consumers are met. Music has become personalized and its consumption is interactive. The Spotify’s ability to encourage social media integration has changed the manner in which music can be downloaded industry. According to Adeshoye (2012), Spotify has given consumers the ability to possess music. For instance, it enables registered users to incorporate their Spotify account with their social media accounts such Facebook and Twitter accounts. After a user has fully integrated the Spotify account with social media account, it then becomes possible to access to favorite music and playlists with their friends (Swanson, 2013). In addition, Facebook compatibility has made it easy for Spotify users to use the social media inbox to share music with their friends. Thus, Spotify has become one of the leading platforms where consumers can have a wide selection of large digital music to consumers (Gopinath & Christensen, 2014). Spotify users are now in position to send tracks to friends who, and in return have an access to music via their personal Spotify accounts.
Spotify has changed music from through the conventional to a social experience that convinces music lovers. Although music listening has always been a social activity, the incorporation of social media amplifies this aspects (Northeastern University, 2012). Twitter and Facebook accounts incorporated into Spotify have strengthened the link between members in a group, as well as with the artist. The consumers can identify with their favorite artists and chat on issues that are relevant (Northeastern University, 2012). Music listeners can now rely on their connections and the platform to access to new music as well as pay less attention to commercial on other streaming platforms such as You Tube. Spotify has enabled music listeners to have memorable experience with sounds and genres which were hard to encounter in the 20th-?century music era. Subsequently, the experience of music is not only more diverse, but also more omnipresent than before. However, to some extent, it has also limited access to music belonging to some artists. For instance, some of the well-known artists such as The Black Keys, and Taylor Swift “have begun speaking out about this service, some even withholding their music from the service entirely, explaining that the payment model is unfair and that the service is cannibalizing album sales” (Swanson, 2013, 217). Such resistance has the potential to limit some consumers to the choice of music they have access to.
Traditionally, music listeners were compelled to store the music they possessed on hard drives of their computers. This increased the ability to possess music in physical form. Nonetheless, after a few downloads and storage, the storage space became relatively limited, thus affecting the computer speed. When the hard drive crashed, the music was also lost gone. However, Spotify can allow consumers to download music and have it stored for future use in cloud music storage (Swanson & Herzig, 2013). This enables the consumer to access the music files across varied platforms hence enable efficiency and convenience. Spotify has taken the selection of music by consumers a step further compared to Pandora. For instance, consumers can choose exactly the kind of songs they would like to hear. On the other hand, Premium users have control to the kind of music they would like to hear on both mobile and fixed devices. Lastly, “Free users also have full control over what they want to listen to on their fixed devices, but they have less control on their mobile devices, where they can only shuffle among and/or within playlists ” (Aguiar & Waldfogel, 2015, p. 6). Thus, free to use, premium, and limited use have provided consumers with the option of determining the choice they have to music.
Music listeners with interest in vast music collections have the capability to store their old music files on a hard drive, therefore creating space via the use of Spotify for more files. Given that all of Spotify’s songs are streamed and stored online, then the consumers could not be worried of having large music space (Katz, 2012). The “discover” feature found in Spotify has played a major role as it allows consumers to have a direct response when they are finding new music. Gopinath and Christensen (2014) established that the Discover tab personalizes music by allowing users to have recommendations of favorite music, all playlists and music shared by the influencers followed, and choice of music based on concerts and reviews. Spotify has the capability to help music listeners to find new music. This allows music faces around the globe to come together and listen to their favorite music selections.
Issues in the Music and Entertainment Industries
Other than the positive effects associated with Spotify, there are negative effects which are relatively experienced in the music and entertainment industry. For instance, people are required to pay for music in order to listen to it. The subscription for the unlimited access is $4.99 per month and for this, customers to have unlimited access to Spotify’s catalog on their desktop computers, while the premium subscription for the users is $9.99 per month, and it provides unlimited listening as well as access to Spotify on offline access to music playlists and on mobile devices (Swanson, 2013). Although Spotify has to some extend reduced piracy, some of the consumers of music are not willing to pay or subscribe for the streaming services. Based on the attitude functional theory persons are motivated to download pirated music in an effort to fulfill value-expressive function (Cammaerts & Anstead, 2011). This is supported by Cronan and Al-Rafee (2008) who found out that the intentions to pirate digital music was driven by their attitudes to perceived risk and previous behavior. Therefore, given that piracy is not highly prosecuted in the U.S, and consumers have easy access music online for free, and this can motivate them to download pirated music.
As a result of increased technological change, the level of music piracy has increased. Music piracy comprises of the illegal duplication as well as the distribution of sound recordings, in form of online piracy, pirate recordings, counterfeit recordings, and bootleg recordings. Online piracy has resulted from the use of internet and social media, which are used to distribute music. Online piracy according to the Recording Industry Association of America (RIAA) is the “unauthorized uploading of a copyrighted sound recording and making it available to the public, or downloading a sound recording from an Internet site, even if the recording isn't resold” (O'Rourke, 2007, p. 122). . Online piracy also includes certain uses of "streaming" technologies that are easily found on the Internet for free. Though piracy is an international problem in its nature, it is also non-commercial and commercial activity that costs the industry billions of dollars. As a result on online piracy, the RIAA has estimated that more than $4.6 billion is lost annually (O'Rourke, 2007). This has negative effect to music producers, distributors, and artists. The RIAA has blamed the internet for increased piracy and the reduction in the number of legitimate music retail outlets and decline in the quality and quantity of the music provided. Subsequently, this would continue to decrease the production and dissemination of quality music because there is no profit when supplying them.
The RIAA has established that the infringement of an artist rights via piracy has numerous effects. For instance, piracy in the music industry tends to increase the cost of legitimate recordings accessed through screaming services, thereby affecting consumers (Rojek, 2011). Artists, producers, songwriters, and musician as well as distributors and retailers are affected in terms of their ability to distribute legit music to their consumers. Dobie (2001) estimated that recording companies to depend on 15% of successful music to repay their production costs and when consumers pirate their music rather than paying for it, then they undergo losses. Therefore, “the rise in the Internet as it pertains to illegal piracy and legal digital distribution undeniably played a major role in the massive shift in consumer preference by providing them the means to easily access individual songs without even stepping out of their front door” (Gamal, 2012, p. 46). Although Spotify does not necessarily contribute to increased piracy, its restriction in terms of subscription may have forced people to shift to internet use which offers free download of pirated music.
In the decade before the emergency of the internet and online streaming services, the music industry was not only profitable, but also healthy. Services such as Spotify have resulted to decline in sale of CDs and some infringements of copyrights. Moreover, there has been a decline in the sale of recorded music, and this result to expected annual monetary loss from CD sales of $3 billion (Mangan, 2015). According to Stafford (2011), the rise of social media is a major challenge to music artists, producers, and distributors. Artists have the power to use social media outlets to release their music free directly to their fans. This practice not only increases their fan base, but also increases access to free music (Dolata, 2011). Music that is released free to fans could be perceived as sampling for forthcoming works for sale, possibly elevating record purchases. Conversely, such actions compels consumers to move away from services like Spotify which charge for music. Thus, the conception by music listeners that music is free can result to music piracy and decline in subscription to streaming services such as Spotify. The explosion of the disruptive has altered the overall demand schedule for music and altered consumer preferences.
Technological advancement has revolutionized the music industry in terms of its production, distribution and consumption. One of the technological innovations in the music industry is Spotify. Spotify allows consumers to have access to music, and the users can subscribe to Spotify Premium, Spotify Unlimited, and Spotify Free accounts. The effects of Spotify on music consumption have been discussed based on the planned behavior theory and social identity theory. Spotify allow consumers to have online access to different music database that can be accessed via a smartphone application and a web browser. Spotify enable customers to share and manage music with friends and colleagues across the globe. The integration of social media networks such as Facebook allow sharing of music files based on consumer demands. Spotify allows consumers to have a wide selection of large digital music to consumers. In addition, it has created social experience through sharing of music, hence increased consumption. Music piracy continues to increase as technology advances. For instance, consumers can freely download pirated music over the internet and supplicate it.
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