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 (Barfe, 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 CDs (Murray, 2012). However, the emergence of the Internet has created a new channel of music provision (Dilmperi and King, 2012) that enables individuals accessing and downloading music files more easily and efficiently (Bockstedt 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 (Dilmperi and King, 2012), and streaming sites (Miravos TV, 2009), the music industry has seen the internet as a threat to the business (Kunze and Mai, 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 Napster and KaZaA that quickly emerged allowing users to exchange digital music with one click (Kunze and Mai, 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 Megaupload (Miravos TV, 2009), the steadily increasing number of consumers 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 (Meisel and Sullivan, 2002) in...