| Abstract |
Technology is rapidly changing business models in the cultural-creative sectors, challenging the way availability, marketing and revenues work. From a business innovation perspective, the history of music distribution has always followed the trend of making it accessible but also profitable. Creative breakthroughs in software technology have made it possible for intermediaries to distribute music to huge crowds all over the world. The emergence of on-demand streaming platforms such as Spotify or or Deezer has transformed the idea of purchasing music from a pay-for-song model to a payed subscription model, causing controversies on the sensitive topic of intellectual property rights and royalty payments. However, the benefits of streaming music using these platforms translate in increased usage and therefore, higher revenues on scale. This paper offers an overview of the innovative business models of the online streaming music industry, concentrating on the unique added value new platforms offer, namely transforming unpaid consumption into payed subscription. We start with a short background of the major developments of music as an art, from an elitist attribute to a large-scale available service. A short review of the innovations in music distribution in the last centuries is performed in order to make it possible to differentiate between the major services existing today. For the applied section of this paper, we look at the increased usage of interactive streaming platforms such as Sirius XM, Pandora and Spotify, and correlate the data with their global revenues. Authors also look at the data regarding music piracy in order to assess if there is a negative impact of the on-demand streaming platforms on piracy practices. Conclusions are drawn regarding the impact of on-demand streaming platforms on overall usage, with a focus on the need to further develop business models that make the music industry both profitable and sustainable in the long run while simultaneously allowing for world-wide accessibility. |
