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I have been revisiting an essay I wrote in late 2005 that discussed the different points of view on the future of copyright law and technology as it relates to the music industry.

In an earlier post, I reviewed “How Will the Music Industry Weather the Globalization Storm?” by Wilfred Dolfsma (2000).

Digital technology’s role in changing the way consumers experience music and the resulting shift in relative value within the music market structure is analysed in “The end of the CD as we know it… Shifting consumer behaviour and changing business models in the music industry” by Dr. Piet Bakker (2004).

In this second article, Dr. Piet Bakker of the Amsterdam School of Communications Research discusses the effect of digital music on consumer behaviour and the potential future business models for the industry. He illustrates how digital technologies, and MP3 in particular, have changed the way music is experienced by consumers.

The increase of computer use and communications technology has put any song instantly into the hands of fans and entire music libraries can be carried in their pockets. The relationship between the consumer and the artist has changed and caused a shift in the music business model that is not based upon the manufacturing and distribution of a physical product but on live performance.

The author demonstrates that although the diffusion of digital music has contributed to declining CD sales, the consumption of music overall has not decreased. He discusses the validity of the music industry’s claims that downloading music from the Internet has had a dangerous effect on both the economy of music and cultural diversity. Bakker maintains objectivity by citing data from the IFPI and the Recording Industry Association of America (RIAA) to explain their point of view while being critical of their conclusions regarding downloading and piracy. The argument that MP3 is “by no means inferior” to the CD music experience is subjective however, and thus is not a sufficient reason to discount the CD market entirely.

Bakker maintains objectivity by citing data from the IFPI and the Recording Industry Association of America (RIAA) to explain their point of view while being critical of their conclusions regarding downloading and piracy. The argument that MP3 is “by no means inferior” to the CD music experience is subjective however, and thus is not a sufficient reason to discount the CD market entirely.

Continued tomorrow…

Tags: business models, consumer experience, market structure, music