In its one-year Global Entertainment and Media Outlook: 2009-2013, PricewaterhouseCoopers undertakings that the planetary media gross will increase at a CAGR of 6.6 % , making $ 2.2 trillion in 2012, with Asia-Pacific being the fastest-growing parts for the industry. Robust growing is expected in the sections of Internet Advertising/Access, Television Licensing /Subscriptions and Video Games. While digital and nomadic are expected to be the cardinal drivers of growing, established and traditional concern sections, will go on to rule grosss, with the exclusion of Recorded Music, where digital distribution will excel physical distribution in 2011. Recorded Music Industry, one of the slowest-growing sections in the last few old ages, has suffered major losingss due to a figure of factors.
First, since 1999, the Internet has drastically altered the production, distribution and ingestion of music ( Molteni & A ; Ordanini, 2003 ) . Internet has become an ubiquitous force in the universe, enabling inexpensive distribution of digital music ( legal and illegal ) . Digital Music Distribution via unauthorised consumer Peer-To-Peer ( P2P ) File sharing represents the most powerful challenge to traditional concern like the recorded music industry ( McGarvey, 2002 ; Parloff, 2003 ; Roth, 2004 ) . Second, the explosive rise of computing machine and console gambling in the amusement landscape, has taken a immense cut out of the music industry ‘s grosss. Entertainment options like place computer science, console gambling, computing machines, etc, have marginalized music as an activity ( Strauss, 2003 ) . Third, Disintermediation ( Ryan, 2000 ) , the procedure of extinguishing the jobbers by the creative persons has serious deductions for the record companies. The easiness of creative activity, production and distribution of music through the cyberspace have evolved to the point where creative persons can touch base with their planetary fans without depending on the music labels. Fourthly, the entire figure of wireless Stationss, music telecasting webs and other ‘streaming ‘ beginnings of music has grown exponentially, giving music fans a immense choice of free ( and legal ) music options. The Recorded Music Industry has been plagued by issues like short eyesight in accepting the digital revolution, the inability to battle digital buccaneering, offline buccaneering ( production and gross revenues of imitative Cadmiums ) , Digital Rights Management ( DRM ) issues, and diminution in CD gross revenues without equal legitimate digital gross revenues to countervail this loss. In today ‘s recessive economic conditions, the entire disbursement on recorded music is likely to cut down, since it is easy to get recorded music at virtually zero cost through P2P services and P2P file trading has become a planetary civilization ( Freedman, 2003 ) . The recorded music industry has been confronting enormous force per unit area to reinvent itself, its concern theoretical accounts and diversify into new gross watercourses. While eliminating buccaneering wholly is non a likely solution, the music industry has to do their legal download services attractive to consumers so that they agree to pay a modest subscription fee.
Harmonizing to PricewaterhouseCoopers ‘ Global Entertainment and Media Outlook: 2005-2009, Recorded music will see an tremendous turnaround to go one of the fastest-growing sections, as disbursement on nomadic music and legal digital distribution services take off. In order to capitalise on this emergent tendency, the record companies need to drive both invention and efficiency and encompass new attacks to content development, engineering and distribution.
The chief purpose of this research proposal is to set up a model for Monetization Of Music By The Record Companies In The Era Of Free, which elucidates that music, is no longer a merchandise, but going a service. Hence record companies need to concentrate non merely on selling music, but besides on “ monetising ” consumer entree to it.
The music industry is in a reasonably nerve-racking yet really exciting transitional stage. The digital revolution has basically transformed all the procedures of the traditional recorded music value concatenation. After passing decennaries commanding the ways people accessed and used recorded music, the traditional music industry has reacted lackadaisically in following the digital revolution. One of the most outstanding theories of ‘Marketing Myopia ‘ by Levitt ( 2006 ) highlights the invention directive, and indicates the power of new engineerings to interrupt bing concern theoretical accounts to accommodate or go disused. Two cardinal factors, which have contributed to this theory with respects to the music industry, are new engineering and the consumer dissatisfaction with the traditional music concern theoretical account which been rendered technologically disused by alterations in information engineering. ( Freedman, 2003 ) . On the positive note, the Recorded Music Industry is at the head of the digital and nomadic revolution, bring forthing more gross in per centum footings through digital platforms than newspaper, magazine and movie industry combined. ( IFPI, 2009 ) . Survival for the record companies would necessitate a mix of variegation into other sectors, more rational concern operations and improved selling and productive partnerships with digital suppliers.
The cardinal aim of this research proposal is to foreground that music, is no longer a merchandise, but bit by bit, going a service and propose a model that the industry can follow to monetise music. The principle behind this is to measure the traditional selling theoretical account of a record company and place the spread that exists in this theoretical account with respects to the current alterations in music industry and analyse whether the passage to a service based theoretical account will assist the record labels increase their grosss.
The 2nd aim of the research proposal is to develop a model, based on “ monetizing ” entree to music and offering consumers entree to music, either bundled with other services or as extra subscription options. While legal downloads and on-line digital gross revenues continue to boom and add to the grosss of the record companies and while buccaneering continues to stay the biggest menace, the cardinal thought of the research is to set up that finally entree to music will replace ownership and multi-point entree to music will be the default environment, leting consumers to make full up their music devices utilizing all sorts of wireless connexions every bit good as other on-demand and ad-hoc networking engineerings.
Reviewing THE LITERATURE
Significant sum of empirical research has been conducted in the yesteryear on the Global Impact of P2P File sharing on record gross revenues, Paid Download Services, Effects of Piracy, Impact of Digitization on Artists and Record Labels, Decline of Global Music Industry, Emergence of Digital Convergence, there has n’t been equal research on distribution theoretical accounts that the record companies should develop in order to last, germinate and boom in the epoch of digitisation. As highlighted by Prahalad ( 2004 ) , a transmutation of a apparently irreversible nature has occurred with the coming of P2P systems, which has titled the power inherent in the exchange relationship into the consumer ‘s favour within cardinal ingestion classs. P2P networks non merely cut down entry barriers in the music industry by diminishing distribution costs but besides provide a convenient entree to consumers. Another deduction of the rise of P2P exchange besides indicates that the consumer ‘s unchained credence of traditional ingestion formats, distribution modes, and pricing systems is declining ( Nunes and Cespedes, 2003 ) . A research conducted by Plouffe, C. ( 2008 ) , implies that media-oriented concerns ( e.g. music, i¬?lm, package etc. ) appear stuck in the riddle that they are legacy industries elaborately linked to neoclassic economic theoretical accounts of exchange and distribution. These industries now face the dire and formidable undertaking of rethinking their concerns and approach-to-market ( Parloff, 2003 ; Roth, 2004 ) . Harmonizing to a survey by Bloom ( 2005 ) , P2P systems at the same time represent both an unprecedented menace and a enormous chance for sellers in specii¬?c industries. A survey of these chances will enable music sellers to attune their schemes to do the most of the proliferating P2P tendency. While large-scale on-line sharing of copyrighted stuff is illegal, P2P applications are non illegal by nature, and could besides function as a foundation for a new manner of doing money with music. Studies, which support this principle, have been conducted by Oberholzer and Strumpf ( 2004 ) , who indicate that the existent loss of gross revenues due to P2P is much smaller than normally claimed. Considerable research has besides been conducted in developing alternate supply concatenation models for the music industry. A notable research by Graham G & A ; Burnes B ( 2004 ) explains that Internet is transforming the music industry supply concatenation. The traditional vertically incorporate supply concatenation of the music companies is bit by bit being replaced by a more dynamic and flexible construction, ensuing in displacement of power from the music industry to the consumers and creative persons. This bing research proposal besides builds on related surrogate theoretical accounts and models for the music industry, which indicate that it is imperative for the record labels to modify their supply concatenation model and develop relevant confederations in order to germinate in the thick of the technological revolution. This proposal besides indicates that instead than concentrating on discouraging buccaneering in the signifier of legal violations and clip devouring cases, record companies should seek to widen their concern frontiers ; either by renegociating music contracts with creative persons or developing confederations with Internet Service Providers ( ISP ‘s ) , hardware makers and other engineering companies.
DEVELOPMENT OF THE HYPOTHESES
This research proposal is based chiefly on the empirical work of other research workers and physiques on their research. Hence the void hypothesis for this proposal can be derived from the hypothesis mentioned in the research work of the earlier research workers. ( Lee & A ; Lings, 2008 ) . Given below are the Hypotheses Statements for the research proposal.
Hypothesis 1: The first hypotheses statement for this research proposal is that ‘Music is no longer based on a product- selling theoretical account, and is bit by bit doing passage to a service-marketing based theoretical account ‘ .
Harmonizing to Kotler ( 1990 ) , “ A service is any act or public presentation that one party can offer to another that is basically intangible and does non ensue in the ownership of anything. ” As highlighted in surveies by ( Gilmore and Pine, 1997 ; Lampel and Mintzberg, 1996 ; Logman, 1997 ) there have been an addition in customization. The paradigm of personalization and customization is the Internet. The coming of Internet and digital engineerings have wholly transformed the consumers purchasing forms and therefore forced many traditional merchandise selling based companies to switch their positions to the service selling based theoretical accounts. The traditional music constructions are no longer yielding net income and the supply ironss of the record companies have been rendered about excess because of the digital engineering. There has been a extremist alteration in mode in which consumers consume music. The ingestion form has changed from ownership of the record to “ entree ” of services, which provide music. The music industry has ne’er wholly embraced the client doctrine of a true selling orientation ( Keith, 1960 & A ; Kotler 2004 ) . A cognition spread exists between the record labels with their traditional concern theoretical account attack and consumer outlooks of the music industry. There is a demand to develop a service-oriented model, which eliminates mediators and provides easy entree of music to the end-consumers lawfully and lucratively. The cogency of the above mentioned hypothesis statement could be tested by using the 7 P ‘s ( Lovelock & A ; Wright, 2002 ) & A ; 6 Cs ( Kerin, Hartley & A ; Rudelius, 2003 ) to the bing traditional theoretical account of the music industry, the renegade theoretical account of the music industry ( The theoretical account based on illegal, unauthorised P2P Sharing via the cyberspace ) and the new concern theoretical account of the music industry which includes legitimate online digital music services like Itunes, Amazon, etc. A comparing of these three will foreground the demand of record companies to follow a true selling orientation doctrine by researching consumers demands foremost and so implementing schemes to bring forth maximal client satisfaction and profitableness.
Hypotheses 2: The 2nd hypotheses statement for this research proposal is that ‘Access to music will replace ownership and multi-point entree to music will be the default environment ‘ .
Entree to music – i.e. a simple click-to-play, anyplace, anytime, anything – is replacing ownership. This tendency will rapidly speed up due to the monolithic planetary build-up in broadband connectivity, taking us fleetly to the point where listening to a vocal will be precisely the same as downloading it. This can be farther supported by detecting empirical informations of subscription based music entree service suppliers like Nokia ‘s Comes With Music, Sony Ericsson ‘s Play Now Plus, TDC Play, BSkyB ‘s trade with Universal to offer limitless on-demand music, Neuf Cegtel, Musique Max from Orange, etc. ( IFPI, 2009 ) The survey of these subscription led services will take to a valid construction and make a strong premiss for the record companies to follow the music utility/access theoretical account. The music industry needs to acquire ready to sell entree non ( merely ) transcripts. The cogency of hypothesis 2 can be tested by researching a “ music public-service corporation ” attack to the distribution and selling of synergistic digital music, which is modeled after the basic comfortss like H2O, gas and electricity. Under the “ music public-service corporation ” model the consumers would pay a level music licencing fee as portion of a subscription to an Internet service supplier, cellular web, digital overseas telegram service radio bearer or other digital web supplier. This fee would allow people download and listen to limitless vocals wherever the broadband entree or the digital web supplier or instrument is available, from a huge library of files available across the webs. The subscription theoretical account provides the full music industry, labels, publishing houses, creative persons and songsters, a repeating gross watercourse. This basic service can be augmented by with assorted chances, including bundles of premium content, unrecorded concerts, new releases, creative person channels, usage digests and more. In such a scenario, record companies should back up the execution of a planetary licence, which would counterbalance all rights holders, including the record labels and creative persons ( for the maestro entering ) every bit good as publishing houses and composers ( for the implicit in composing ) . The cogency of this hypothesis can be tested by analysing the information of free, legal option to illegal music downloads, like the music-streaming service, Spotify and other successful subscription based theoretical accounts. Spotify streams paths free, interrupted by minimum advertisement. Customers can pay a monthly fee to acquire rid of the advertizements or to put in the application on iPhones and other nomadic devices. Acccording to Roberts J ( 2009 ) & A ; Davis A ( 2009 ) “ Spotify is really impressive. It provides, at your fingertips, one of the largest libraries of digital music available to day of the month and provides a model where music labels make money and users can listen to more than a million melodies free of charge. ”
a ) Philosophical Perspective of the Research
This research will be based on the Interpretivist Paradigm. An Interpretivist Paradigm involves description of experiences. Interpretative attacks rely to a great extent on realistic methods i.e. interviewing, observation and analysis of bing text. It is chiefly explorative and descriptive in intent and is strictly designed to detect what can be learned about the country of involvement. The research proposal will be chiefly based on inductive survey by analyzing pieces of specific information derived from music, amusement and digital engineering related instance surveies and relevant concern literature in the yesteryear. This research proposal will be theory edifice, instead than theory proving. The theory presented in the proposal augments similar constructs developed in the yesteryear, and will be presented through advanced analytical tools and models.
B ) General Research Design
The research will be based on descriptive manner of research. Such descriptive manner of research makes usage of secondary informations collected from old surveies published or unpublished paperss. Consequently with the descriptive research, it is necessary to hold a clear image of the phenomena on what is the information to be collected. Furthermore it is even possible to widen the research and draw decisions from the information gathered. The research will be based on qualitative research method. Traditionally, qualitative research has been viewed slightly simplistically as a set of different research methods that have certain characteristics in common, in this regard, qualitative methods are employed to roll up informations about activities, events, happenings and behaviors to seek an apprehension of actions, jobs and procedures in their societal context. For this research survey, qualitative attack will be used in order to understand the principle of the music caputs. Qualitative research besides allows the research worker to be adaptable at all phases of the research procedure because it is both inductive and deductive. Initially it is inductive. This means that, a batch of forms, manners, subjects, classs emerge out of the informations alternatively of being imposed on them prior to data aggregation and analysis. Subsequently the procedure of qualitative research becomes deductive because, as the research progresses, working propositions and thoughts would be tested over the following phases of informations aggregation and analysis. Qualitative research is frequently described as iterative because there is a changeless interplay between analysis and informations aggregation. Although informations decrease and reading are common to most types of qualitative analysis, there are no stiff phases or regulations for set abouting the procedure of qualitative analysis, unlike in quantitative research where there are well-established methods and processs.
degree Celsius ) Specific Data Collection Methodology & A ; Data Analysis Method
This research proposal will affect the studied usage and aggregation of a assortment of empirical stuffs – instance surveies, personal interviews and analysis of ascertained informations. To set up a future position for the music industry, as seen from the point of position of the major companies in the industry, research will be conducted in the signifier of Interviews of the Key Management of the 4 large record companies ( UMG, Sony-BMG, EMI and Warner ) . The personal interview method is deemed to be most appropriate manner to accomplish an in-depth analysis and future tendencies of the industry, as it facilitates the aggregation of elaborate, holistic information and cognition in an explorative manner. It besides enables close interaction with interviewees, in order to research new subjects, which may originate during the interview stage ( Friedrich, 1990 ) . For the intent of structuring the interview a guideline will be developed of 20 inquiries. Both the key aims raised in this research proposal will be converted into open-ended structured questionnaires. Before the existent interviews, the participants will have a short description of the intent of the interview and the nature of the inquiries in order to guarantee a grade of readying. Lowe ‘s ( 1991 ) Qualitative Coding Matrix ( QCM ) provides an operational agencies for analyzing the qualitative informations generated from the interviews. This method ensures that the consequences have a certain grade of cogency, cogency and dependability, the deficiency of which is a common unfavorable judgment of qualitative enquiry ( Yin, 2003 )
Sample Selection & A ; Size
The interview participants will be employees of the 4 major record companies and will be employees who occupy an executive degree place or have a senior direction experience in the music industry. Although questions for a personal interview can hold a response rate every bit high as 90 % ( McBurney, 1994 ) , the music industry is a hard mark group to hold entree to. The entire sample size is 30 interviews. A lower limit of 15 personal interviews will be conducted and the staying sample size will be contacted through telephone or e-mail interviews.
The information will be recorded utilizing a combination of audio recording, picture recording and written notes.
The digital revolution has transformed the manner the music industry engages with consumers and distributes its merchandise. The music industry is germinating new concern theoretical accounts, offering consumers entree to music in many ways. The industry ‘s greatest challenge remains bring forthing challenge remains bring forthing commercial value in an environment dominated by free unauthorized music. As the physical format of CD ‘s gives manner to the digital entree of music, record companies must monetise new chances and research new gross watercourses for augmenting their gross. Synchronization ( the usage of music in movies, advertizements, games ) , trade name partnerships, , selling and public presentation rights incomes are countries the record companies should put extra emphasis on. The record labels must develop partnerships with engineering giants, ISPs, digital hardware and package makers and progressively do an effort to roll up music. Eliminating buccaneering or seeking to alter the ingestion forms of the consumers are activities the record companies should non prosecute, but alternatively invent models that enable consumers to entree music freely, lawfully at minimal cost, with minimal incommodiousness. “ On-demand services are the hereafter of amusement bringing. Cadmiums, DVDs, and any other signifiers of physical media will go disused ” ( Legon, 2004 ) . The houses with winning concern theoretical account schemes will most probably be “ those with sufficient graduated table to change over meager per-song borders into meaningful net incomes and those that use music to sell additions, be it hardware, subscriptions to online music magazines, or concert tickets ” ( Burrowsetal.,2003, p.42 ) . Successful houses are predicted to besides turn to m-commerce by making confederations with on-line music services, phone and overseas telegram companies that provide broadband services, and “ music to travel ” equipment makers ( Legrand,2004 ) . The proposed music public-service corporation service would be a extremist and complex project, and there are many of import inside informations to negociate, such as the exact nature of the licence, how the financess would be administered, the specific tracking method, what aggregation of engineerings would be employed and others. But the clip is appropriate for record companies to develop a extremist model which gives them an border over P2P File sharing and Illegal buccaneering.