Music business models and piracy
Industrial Management & Data Systems
Article publication date: 25 January 2013
The purpose of this paper is to estimate the scale of illegal file‐sharing activity across ten countries and to correlate this activity with country revenues. The work aims to elucidate an under‐explored business model challenge which exists in parallel with a music piracy challenge.
The study data are drawn from a number of sources, including a data set of a survey of more than 44,000 consumers in ten different countries undertaken in 2010. Following analysis, all findings are validated by a panel of industry experts.
Results show that non‐legitimate file‐sharing activity is a heterogeneous issue across countries. The scale of activity varies from 14 per cent in Germany to 44 per cent in Spain, with an average of 28 per cent. File‐sharing activity negatively correlates to music industry revenue per capita. This research finds many consumers are not engaging with online business models. Almost one fourth of the population claim that they do not consume digital music in either legal or illegal forms. This phenomenon is also negatively correlated with sales per capita.
Results support the need for policy makers to introduce strong intellectual property rights (IPR) regulation which reduces file‐sharing activity. The work also identifies a large percentage of non‐participants in the digital market who may be re‐engaged with music through business model innovation.
This research presents a map of the current file‐sharing activity in ten countries using a rich and unique dataset. The work identifies that a country's legal origin correlates to data on file‐sharing activity, with countries from a German legal origin illegally file sharing least. Approximately, half of the survey respondents chose not to answer the question related to file‐sharing activity. Different estimates of the true scale of file‐sharing activity are given based upon three different assumptions of the file sharing activity of non‐respondents to this question. The challenge of engaging consumers in the digital market through different business models is discussed in light of digital music's high velocity environment.
Bustinza, O.F., Vendrell‐Herrero, F., Parry, G. and Myrthianos, V. (2013), "Music business models and piracy", Industrial Management & Data Systems, Vol. 113 No. 1, pp. 4-22. https://doi.org/10.1108/02635571311289638
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