Servitisation and value co-production in the UK music industry: An empirical study of Consumer Attitudes

Abstract

Abstract Since the rise of music on the internet the record industry has reported falling total sales revenues. This has occurred at a time when technology has radically increased choice, availability and the opportunity for the consumer to purchase music. To date, pay-per-unit music sales channels have been more successful than music subscription services. As the music industry has moved from a product to a service business model, does the loss of sales indicate they have not taken their customers with them? This paper provides a description of different Music Consumer Attitudes, an independent variable in this research, based upon quantitative analysis of more than 5000 valid survey responses. Consumer Purchasing Behaviour and Music Discovery Methods are treated as dependant variables. An empirical study using Structural Equations Model was carried out to test the relationship between consumer groups and purchasing preference in relation to tangible products and intangible ‘service’ purchases. Moreover, consumer typology and propensity to actively engage with music communities was analysed and thus their willingness to co-produce value was explored. The most important findings were, first, all consumers view pay per unit positively. And second, a group of consumers representing just under half the sample was identified that would engage with a monthly subscription music service and could co-produce solutions in this channel.