Mobile Music, Customer Value, and Changing Market Needs

Per Andersson, Christopher Rosenqvist
2006 JMM - The International Journal on Media Management  
The music business is under considerable pressure for change due to digital distribution and the synergies between music services and other Internet-based products. The evolution of the old and the new emerging business models in the music industry has come into focus with the emergence of the digital distribution of music services, as described by Vaccaro and Cohn (2004) for example. Based on the same observations, Fox and Wrenn (2001) suggested new business and revenue models for music
more » ... es. To cope with the new situation, strategic alliances are being established among and between wireless infrastructure firms, operators, and product providers. Vlachos, Vrechopoulos, and Doukidis (2003) discussed a set of strategic marketing implications for product providers and mobile operators engaged in mobile music distribution. Relating to strategic considerations, and against the background of these changes to the music industry, this article explores a set of issues of strategic importance in mobile music distribution: the role of the mobile phone as an emerging "entertainment center" for progressive user segments, the increased personalization of services, and the role of various models of payment for digital (including mobile) music. Hence, the study takes as its starting point the implications of changing customer demand for mobile music services. On the basis of exploratory studies of consumer attitudes toward the digital distribution of music in general, and with a particular focus on the new territory of mobile music distribution, a set of propositions is generated and discussed. Purpose and Research Issues The overall aim of this article is to identify and discuss critical strategic issues in digital music distribution, with particular attention to mobile music, to provide suggestions for strategic changes in these areas, and also to iden-tify areas for future study. Based on preliminary studies of customer demand and behavior in the emerging market for the digital distribution of music services, three strategic areas for suppliers of these services can be identified: the role of the mobile phone as an emerging entertainment center for progressive user sectors, the increased personalization of services, and the role of various models of payment for digital music, including mobile music distribution. The article attempts to answer the following three questions: 1. What role will the mobile phone have in the future as a multimedia distribution device, including the distribution of various forms of mobile music service? 2. What role will the personalization of services for the mobile phone have, including the personalization of music services such as ringtones? 3. What diversity concerning models of payment will develop in the market for digital (including mobile) music services? The following section commences with brief comments on the research methodology and its delimitations. These are followed by comments on the conceptual foundations of the underlying study. The first part provides a brief introduction to the empirical area, elaborating on which services can be encompassed within the term mobile music. The subsequent main section of the article discusses each of the three research issues previously outlined. The conclusions identify a set of market barriers in the three areas, all of which need to be addressed if the market for mobile music is to evolve successfully. Finally, two additional areas of empirical research, important for the future development of digital music distribution, are introduced. Notes on the Method The activities performed within this study featured the following major components: a preliminary survey, desktop research, interviews, focus-group discussions, evaluations, and conclusions. To gain information about new
doi:10.1207/s14241250ijmm0802_5 fatcat:76qrth5u3venldlv2fjt3zt4ta