Towards a music streaming economy – Scandinavia part 3

Part 1 of the blog series highlights that the Scandinavian countries are the world’s music streaming avant-garde due to a well-established broadband Internet infra-structure, a high smartphone penetration rate and domestic business innovations (see also part 2). The most influential Scandinavian business innovation was Sweden’s Spotify, which was launched in October 2008 at the culmination of The Pirate Bay lawsuit. However, several other services early offered music access to music in Scandinavia. In 2009, Finnish smartphone company Nokia launched the Comes-With-Music service, which allowed unlimited music access for a year on special Nokia Comes-With-Music phones. In the same year, Swedish Sony-Ericsson in collaboration with Norwegian Telenor offered the PlayNow plus service on its special edition of Sony Ericsson Walkman phones (IFPI 2009: 8). However, the mobile phone manufacturers failed to meet the music consumers’ convenience. Nokia’s music was DRM protected until 2010 and limited to special Nokia devices, whereas Sony Ericssons’ music was DRM free, but limited in time and to special devices.

In 2011 both services were, therefore, were discontinued,[1] when Spotify, WiMP and TDC Play started to dominate the digital music market. In 2009, the Danish TDC Play was the first ISP music service offering unlimited music streaming from 6.1 million tracks without any additional costs (IFPI 2010: 8). Spotify’s ad-supported unlimited streaming tier was also bundled in ISP TeliaSonora in Sweden and Finland and the premium tier could be directly paid on the broadband bill (ibid.: 9). WiMP’s subscription service also succeeded in Norway due to its bundling in Telenor’s mobile phone contracts (IFPI 2011: 9).

Consumer convenience, therefore, was the key success factor for music streaming services in Scandinavia. It was easier to access music by a streaming services than downloading music from P2P file sharing networks with the risk of malwares and viruses. Music consumption studies in Norway and Sweden highlight this shift from P2P file sharing to music streaming as outlined in the following analysis.

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The Music Industry’s Fight Against Napster – Part 4: Napster’s Slow Death

On December 6, 1999, the Recording Industry Association of America (RIAA) sued the first file sharing platform Napster for copyright infringment. This was the start of a still ongoing campaign against file-sharing and related practises. On the occasion of the 15th anniversary of RIAA’s lawsuit against Napster, I would like to retell the story of Napster relying on Joseph Menn’s book “all that rave. The Rise and Fall of Shawn Fanning’s Napster” (2003) as well as on court documents and press articles.

In the fourth and last part the slow death of Napster is highlighted when Bertelsmann AG bought the sued file sharing service and failed to turn it into a sustainable business model.

The Music Industry’s Fight Against Napster – Part 3: The Trial

On December 6, 1999, the Recording Industry Association of America (RIAA) sued the first file sharing platform Napster for copyright infringment. This was the start of a still ongoing campaign against file-sharing and related practises. On the occasion of the 15th anniversary of RIAA’s lawsuit against Napster, I would like to retell the story of Napster relying on Joseph Menn’s book “all that rave. The Rise and Fall of Shawn Fanning’s Napster” (2003) as well as on court documents and press articles.

In part 3 the trial on the preliminary injunction against Napster is highlighted that eventually let to the shut down of the file sharing service in summer 2001.

Is piracy ‘good’ or ‘bad’? – guest post by Steven Brown

Steven Brown is a Doctoral Research Student at Glasgow Caledonian University, Scotland. His mixed-methods research into music piracy has appeared in diverse publications including The Psychologist,  Musicae Scientae, and Convergence.

In his guest post he reflects his long experience in the psychology in music piracy research to question if piracy is economically ‘bad’ or ‘good’. He comes to the conslusion that the answer is strongly dependent on the methodology used in the research. This is in line with my findings in the blog series “How Bad is Music File Sharing?”

Read more on Steven’s thoughts on music file sharing research here:

Book Review: Music Business and the Experience Economy. The Australasian Case

“Music Business and the Experience Economy” is the first book on the music business in Australasia from an academic perspective. In a cross-disciplinary approach, the authors deal with a wide-range of topics concerning the production, distribution and consumption in the digital age. The interrelationship of legal, aesthetic and economic aspects in the production of music in Australasia is also highlighted as well as the emergence of new business models, the role of music file sharing, and the live music sector. In addition, the impact of the digital revolution on music experience and valuation, the role of music for sports and branding, and last but not least the developments of tertiary music education, are discussed from different perspectives.

Peter Tschmuck, Philip L. Pearce and Steven Campbell (eds.), 2013, Music Business and the Experience Economy. The Australasian Case. Heidelberg & New York: Springer, ISBN: 978-3-642-27897-6.

For a more detailed book review please click here for further reading.

How Bad is Music File Sharing? – Part 25

The Joint Research Centre (JRC) of the EU Commission recently published a study entitled “Digital Music Consumption on the Internet: Evidence from Clickstream Data” with remarkable results. The authors, Luis Aguiar and Bertin Martens, concluded that music file sharing as well as music streaming have a significant positive impact on legal music downloads. The study is based on Clickstream data from Nielsen NetView. The database contains all the clicks of 25,000 Internet users in France, Germany, Italy, Spain and the United Kingdom for the calendar year 2011. In the following the main finding “(…) that digital music piracy does not displace legal music purchases in digital format” will be further investigated.

Music Experience and Behaviour in Young People in the UK

The study Music Experience and Behaviour in Young People is the third survey of its kind – after 2008 and 2009 – for 2011. After a presentation of the key findings of the study in the 3^rd Vienna Music Business Research Days, it’s now an honour and pleasure to exclusively present the results of the current study on the blog. The 2011 study is based on a comprehensive online survey of 1,888 of 14-24 year olds across the UK. The main conclusion of the current research is “(…) that when it comes to music and young people, everything is different, and yet everything is still the same”; compared to 2008 and 2009.

The key findings of the 2011 study are:

• The computer is no longer their main entertainment hub.
• Digital music collections are still huge.
• Digital music collections still contain 50 percent “free” music.
• Ownership is still important.
• Music is no longer the most popular entertainment type.
• There remains a very clear “value gap”.
• The popularity of file sharing has changed significantly.
• The 14-25 years olds are prepared to pay for digital music.
• But there are still challenges for streaming music online.
• Digital music consumption is still complex.
• They have a clear understanding and grasp of what copyright law is.

Please read further if you want to know more about the research results.

How Bad Is Music File Sharing? – Part 24

In a recent working paper by Robert G. Hammond of North Carolina State University the impact of album pre-releases in file-sharing networks on physical and digital album sales is analyzes. The paper comes to the conclusion that album sales benefit from album leaks. “[A]n album that became available in file-sharing networks one month earlier would sell 60 additional units”. In addition the results also suggest that popular artists benefit more from file-sharing than newcomers and less establised artists. In the following the analytical and methodolocigal background and the results of this paper are highlighted.

How Bad Is Music File Sharing? – Part 23

The economist Jordi McKenzie of the University of Sydney published the first study on the impact of music file sharing on music sales (physical and digital) in Australia. His article in the Australian Economic Papers entitled “Illegal Music Downloading and Its Impact on Legitimate Sales: Australian Empirical Evidence” is based on a working paper from August 2009 and was published in December 2009.

With a similar methodological approach to Oberholzer-Gee and Strumpf (2007) he came to the conclusion that “(…) the evidence suggests no discernible impact of dowloading activity on legitimate sales“. More details on his approach and his findings are given here:

How Bad Is Music File Sharing? – Part 22

The objective of Brigitte Andersen and Marion Frenz’s study entitled “The Impact of Music Downloads and the P2P File-Sharing on the Purchase of Music”,(2007/08), which was later published in the Journal of Evolutionary Economics under the title “Don’t blame the P2P file-sharers: The Impact of Free Music Downloads on the Purchase of Music CDs in Canada” (2010) was to determine how the downloading of music files through P2P networks influences music purchases in Canada. They used data from a representative survey of the Canadian population aged 15 and older collected by Decima Research for Industry Canada, in which 2,100 repondents were also asked how many CDs and non-physical music tracks they purchased in the last two months and how much they paid for it on average. They show in their paper “(…) that P2P file-sharing is not to blame for the decline in CD markets. Music markets are not simply undermined by free music downloading and P2P file-sharing, due to the sampling effect” (2010: 735).