The New Music Industry : - Understanding the Dynamics of the New Consumer of Music

Abstract: The music industry today is undergoing a revolution with digital distribution of music taking over the traditional sales of physical CDs (Mewton, 2008). The peer-to-peer networking and illegal music piracy is a problem that lately has been widely discussed in forums of ethics, legal issues and economical aspects, followed by a music industry trying to solve the situation with new business models enhancing digital sales, e.g. the tip jar model (Hiatt & Serpick, 2007). The tip jar model embodies the problem the industry is facing since it allows the consumer to choose whether to pay or not. Therefore the question of what leads the consumer to pay instead of download or pirate music has been researched in many aspects. However it has been made to a lesser extent in theory of loyalty and liking and their implications on the new business models’ success and the new consumer of music. Previous research within music piracy has mainly explored demographics, macro- and micro economical perspectives such as artist and record company loss of welfare and consumer surplus (Coyle et al., 2008). We find it of interest to instead further explore the impacts of theories about consumer liking, loyalty and attitudes (Wells & Prensky, 1996; Shiffman & Kanuk, 1987; Solomon et al., 2002) as an addition to this existing knowledge to enhance the understanding about the new consumer of music. The purpose of this thesis is to analyze artist liking, artist loyalty and attitudinal factors’ impact on consumers’ music piracy intentions. The study is an explanatory study based on quantitative data collected in the region of Jönköping where the collection of data has been conducted by using two questionnaires; one among students at the School of Education and Communication (Jönköping University) and one at the A6 shopping-center. This data has been summarized to create independent variables used in a multiple regression analysis to calculate their impacts on piracy to confirm or reject the from theory deduced hypotheses. The results from the multiple regression analysis show that the attitudinal factors do not have a direct impact on piracy intentions; however the other two independent variables, measuring the artist loyalty and artist liking have a larger impact. Surprisingly, a higher level of loyalty increases the intentions to pirate music while, as anticipated from theory (Solomon et al., 2002; Shiffman & Kanuk, 1987), higher liking decreases intentions. The conclusion is that the artist liking variable and artist loyalty variable are resulting in a bridge over piracy where the pillars are built of liking and the bridge itself is built of loyalty, stressing the importance of maintaining high levels of liking to maintain purchasing behavior online.