1.

INTRODUCTION
The twenty-first century crisis of digital reproduction (Lessig, 1999;2001) of various copyright industries - film, photographic, publishing, videogame and software industries (Vaidhyanathan, 2001) - has proven to be a fertile ground for academic research from various disciplines. However, it has been the music industry that had to face this digital crisis of reproduction first (Leyshon et al, 2005). At the heart of this ongoing digitization lies the alleged annihilation of the music industry by the mp3 (Fox, 2004; Leyshon, 2003; Liebowitz, 2004; Sirois and Wasko, 2011), spurring the debate on whether this is 'plain destruction or creative destruction' (Liebowitz, 2006; Handke, 2006, 2010). The allegation of the plain destruction despite its rhetoric power has resisted consistent empirical verification 1, but more importantly fails to acknowledge the problems of popular music the industry was already facing (Bolin, 2011; Leyshon et al., 2005; Stern, 2012). Nevertheless, for the industry the 'consumer deviance' of their traditional product has mounted in a 'quest' for a legitimate digital distribution market with two key challenges: preventing the reproduction of infinite copies of music; and searching for a method of payment that consumers are happy with (Hesmoldhalgh, 2009). The solution to the former through a preventive strategy - i.e. implementation of DRM and suchlike technologies - has been met with I ncreasing critique from consumers as well as from academics that point out this just makes no business sense (Bakker, 2004; Sinha et al., 2010) and has strengthened the importance of the latter. Finding a good pricing model has been a key aspect in studies that acknowledging the creative destruction - have pointed out the stagnant business model of industry and the urgent need for new ones (Fox, 2004; Gobal, Bhattacharjee & Sanders 2006; Leyshon et al., 2005; Vaccaro & Cohn, 2004; Williams, 2004), which - to put it in basic marketing terms - offer value to consumers (Coldry, 2004; Fox, 2004). Yet the traditional marketing model and factors used to segment the young consumer market appear less
1

For various reasons, but see Liebowitz and Watt (2006) and especially Handke (2010) for a detailed discussion.

relevant and useful to market and distribute music products (Nutall et al., 2011). Piet Bakker (2004) wrote that the question at hand is no longer whether downloading MP3s is hurting sales but much more how MP3s have changed the way music is experienced. This consumer orientated view is generally neglected in economic studies, which tend towards more fixated views on music file-sharing as the 'provision' of a public good and the failure of copyright protection (Handke, 2010), or on a more positive note the possible network externalities and indirect appropriation (Liebowitz and Watt, 2006). One strand of research, born out of the recognition of digital music's tendency to behave like a public good and the consequent need to assess people's economic valuation of it, consists of studies looking at what determines consumer's willingness to pay (WTP) for digital music (e.g. Chiang and Assane, 2009; Filimon et al., 2010; Molteni and Ordanini, 2003; Sinha and Mandel, 2008; Sinha et al., 2010). Many of these studies departed from the assumption that file-sharing is equal to piracy however, an assumption that is too simple (Castells and Cardoso, 2012; Waldfogel, 2012). Furthermore we are seeing a slow stabilization of the digital music market with fixed prices, so WTP -as a measure of of the maximum amount of money consumers are willing to pay for a good or service- loses it's significance. Although the fight against piracy is ongoing, it is now widely acknowledged that the lack of interest in actually owning music as an original and a sort of unspoken 'norm' (Fischer, 2004, Depoorter et al., 2005) that music is a public good that can be downloaded for free has resulted in a belief that the digital music file for many consumers has no economic value. This is backed up by figures of the Internet consultancy company Comscore (Leyshon, 2009), which scrutinized the anecdotal and widely discussed marketing stunt of Radiohead, which was not nearly as successful as is commonly believed2:

In 2007 the band Radiohead decided to make their new album 'In Rainbows' available to download for free online but allowed people to set their own value for the tracks. More than 60% of consumers chose not to pay at all, apart from the obligatory 45 pence administration fee (Comscore, 2007; in Leyshon, 2009).

I am surprised by the number of freeloaders...this shows pretty conclusively that the majority of music consumers feel that digital recorded music should be free and is not worth paying for. That's a large group that can't be ignored and its time to come up with new business models to serve the freeloader market (Fred Wilson, managing

partner of Union Square Ventures and well-known music aficionado 3) The music industry itself now also believes that popular music by itself is decreasing in value4 and needs to be complimented with cross-media marketing strategies - such as those employed with popstars - in order to survive (Fairchild, 2008; McLeod, 2005). What we have consequently seen is experimentation with business models that incorporate this widely held belief of free. Among the new business models, the streaming/subscription model (Fox, 2004) is gaining increasing popularity. The music service Spotify is now the second largest source of digital music revenue in Europe (IFPI, Apr 2013). The service is characterized by unlimited access to a wide library of music, ease and convenience of use and sharing your music listening style with your network of friends. This exemplifies, what I recognize to be four interrelated characteristics of digital consumption of popular music: the increasing importance of the communal aspect of music (Berger, Kerrigan and Larsen, 2010; Molteni and Ordanini, 2003; Ordanini and Parasaruma 2012; Walsh et al. 2003) where products become more important for the social relationships they provide than the ownership itself (Cova & Cova, 2002; Cova et al., 2009); the declining importance of owning a piece of music to people (Rifkin, 2000b, McGuinness, 2008); the transition - highlighted by this disappearance of the physical music artifact - from a world of cultural goods to cultural services (Berger, Kerrigan and Larsen, 2010; Brindley, 2000; McCourt, 2005); and the fact that ultimately the locus of the economic value of music lies not in the product itself but rather in 'the manner in which it reaches the consumer' (McCourt, 2005, p.251).

3 4

http://www.comscore.com/Insights/Press_Releases/2007/11/Radiohead_Downloads This is a widely held belief now both in the music industry at large and in independents. (Music in the Digital Age - What is its value?, Anth Gaskill, founder of Forbidden Fruit Records, www.musicindie.com/news/1175)

This fits in line with: the transformation of modern markets from ownership to access (Humphreys and Giesler, 2007a; Rifkin, 2000a; Vargo and Lusch, 2004) and the ability to get what you want, when you want it (Fairchild, 1993).
'The access model is now a reality for millions of people across the globe. This is a model that works; it is no longer an experiment. We are here to stay.' (Ken Parks, chief

content officer Spotify, quoted in IFPI, 2013) However this shift is not something that occurs throughout the entire population of digital music consumers. Although Napster was the first of a 'new genre of businesses' to work with a network mentality, instead of the traditional market-logic of buyers and sellers (Rifkin, 2000b) and has indeed for a large part shaped the present day digital music landscape, the ongoing popularity of iTunes shows many people still value the classic 'ownership' of music, even in the digital domain. Ten years ago Steve Jobs said at the iTunes launch event:
We think people want to buy their music on the Internet by buying downloads, just like they bought LPs, just like they bought cassettes, just like they bought CDs. Theyre used to buying their music and theyre used to getting a broad set of rights with it. When you own your music it never goes away.(Jobs, iTunes lauch Event 2003)

At the same time in the physical domain vinyl has seen a sort of a resurrection, with sales steadily increasing, and not just among the older music fans but younger groups as well5, the group known as generation Y (McIntyre, 2011). The core music consumer population, i.e. the music enthusiasts or fans, then clearly still values ownership (Burkart, 2008; Gillespie, 2007; Styven, 2010). This can be explained by the construct 'involvement' that has become a major area of research in consumer studies and marketing for well over 50 years now. Although initially developed for normal products (Slama and
5

Allan Kozinn, 'Weaned on CDs, Theyre Reaching for Vinyl', Published: June 9, 2013 (www.nytimes.com/2013/06/10/arts/music/vinyl-records-are-making-a-comeback.html?pagewanted=all&_r=0)

Tashchian, 1985; Zaichkowsky, 1985), this scale has been adapted to music (Dixon, 1980; Puceley et al., 1988; North and Ishi, 2006; Styven, 2010). Former research has shown that high music involvement measures purchase behavior and more specifically that highly involved music consumers still prefer the physical music format (North and Ishi, 2006; Styven, 2010). At the same time a third category 'experience', which has become a new addition to the consumption concept in marketing (Achrol and Kotler, 2012), must also be captured. Although high involvement is often associated with the product (e.g. Park and Moon, 2003; North and Ishi, 2006; Traylor and Joseph, 1984), highly involved music consumers may also be more sensation seeking (Litle and Zuckerman,1986) and express a desire for more unique experiences, i.e. concerts and festivals, and want to pay a premium for this. Indeed marketing gurus recognize we are living in the 'experience economy' (Pine and Gilmore 1999; Schmitt, 2003; Shaw and Ivens 2005). There has been a steady growth in the live concert and festival sector. This then represents another shift in the music market. For many people the experience of hearing their favorite artist or artists at a live concert or festival is a more rewarding and unique experience and may have become a substitute for purchasing music. It is now 'common parlance' to speak of a shift in revenues from recording to the live sector (Williamson and Cloonan, 2005) or even the end of the traditional recording industry (Sandall, 2003; Williamson and Cloonan, 2012). This alleged shift is contested however. Lee Marshall (2012) argues that it is still mostly the stars who are profiting from live playing and that the popular music stars we have exist because of, not despite of, record label support (p. 16). In this paper then I argue, as others have as well (Bolin, 2011; Hesmondhalgh, 2009), that the changes we see are not so radical. Rather, they only bring to the surface the cultural public good characteristic of music more profoundly. Consumers WTP for music then can still be explained by theory of cultural goods and consumer characteristics. My goal here is to build upon the literature of music involvement by testing how involvement effects the preference for ownership of recorded music (album, single) or access (subscription). So I plan to use this 'paradigm shift from ownership to

access in music' (Humphreys and Giesler, 2007a) as a theoretical lens. Recent research has focused on music as a service (van Banda, 2012; Doerr, 2011), but here the focus clearly lies on the service quality rather than the music product. My focus is on music as a product and consumer involvement. The importance of concerts to people will also be taken into consideration. Research will be conducted through an online survey. Since both access and ownership as theoretical concepts are dependent on their empirical counterparts in the digital domain, access will be captured by the dominant paid streaming service (Spotify) and the (music) video sharing site Youtube; and ownership by purchasing physical music albums as well as digital music at stores such as iTunes, Amazon and Bandcamp. Experience will be captured by concert and festival attendance. The main research question is: 'Which consumer characteristics explain preference for a specific form of music consumption?' Sub research questions: - 'Are there specific consumer segments that can be targeted with a specific business model?' - 'Does popular music appeal more to casual listeners?' - 'Do highly involved music consumers buy digital music?' The paper is structured as follows: chapter two will cover the theory and hypotheses; chapter three will discuss the method and data collection; chapter four will cover the results of the empirical research; the final chapter will be a discussion for further research.

2. THEORY
I will start with the theory of cultural goods; the next section will provide an outline of the context of my research, namely the present day music industry; The third section will look at consumer characteristics, where hypotheses will be developed for the empirical research.

2.1 CULTURAL GOODS

Academics have for a long time grappled with the question of what differentiates cultural goods from other products on the market (Straw, 2002). By isolating the unique characteristics cultural goods academics could understand the structures and processes of it's production, distribution and consumption. Although a lot of contributions came from sociologists of cultural production (i.e. Hirsch, 1972; Miege, 1979) which stressed the high level of 'demand uncertainty' of these goods for this paper the interest lies in consumption. The main contribution to the understanding of cultural goods came from the economic paper 'Information and Consumer Behavior' By Richard Nelson (1970). Below I will present a discussion of this theory of experience goods. I will further discuss the unique characteristics of music, which has developed mostly out of marketing and consumer behavior theory.

2.1.1 Theory of experience goods

Cultural goods and services are now often categorized as experience goods (Towse, 2010) a concept introduced by Nelson (1970) to bring a more robust theoretical framework for analyzing the relationship between the industry structure, it's product characteristics and consumer behavior. Nelson contrasted experience goods with 'search goods': search goods are goods for which the key characteristics and value are experience goods are goods whose key characteristics are not known

known prior to purchase (i.e. most utilitarian goods) prior to purchase and consumption. For experience goods there are two aspects that are differentiated in the literature (e.g. Handke, 2010, Towse, 2010):

1. individual learning; that shapes the development of personal preferences. Past experiences with cultural goods (your exposure to an artist or a genre) shapes the preferences and taste. 2. quality uncertainty; the personal experience of consuming a specific cultural good is the most reliable way to assess utility for a consumer. So you need to experience the good in order to know it's value. The first implies not only that taste develops over time but also that in general consumer's willingness to pay increases with age and experience (Towse, 2010). The second describes how a cultural good needs to be experienced/consumed in order to know it's value. So the 'use value' lies in the 'raw experience' itself, and cannot be predetermined from specific product characteristics and can only be evaluated and reflected upon postconsumption. This creates however what is commonly known as the paradox of disclosure (Arrow, 1962), which refers to the fact that for consumers to adequately assess their willingness to pay for (information) goods disclosure of the good is required. But that very disclosure then actually reduces consumer's willingness to pay (wtp as the maximum amount of money they want to pay to obtain the good). This results in a lower market value or worse a lack to even want to buy the good (Shackle, 1952). It should be mentioned that both Nelson himself as well as much of the literature after wards stress that there are almost no practical examples of either pure search goods or experience goods (Handke, 2010). However, categorization is never applied for the sake of categorization. Rather, it helps us appreciate certain attributes of a good so to understand how we as consumers make our value judgments prior to and post purchase and also prior to and post consumption.

2.1.2 Credence goods and utility

Another term sometimes used for cultural goods and which relates to the first aspect of experience goods is 'credence good' which tells that key features cannot be known or understood even after consumption (Kretschmer et al.,

1999). The learning effect is limited because consumers do not buy the same good over time. The genre and style might remain the same but the end product is different every time (Handke, 2010). So people often have to rely on other authorities or experts on their expertise and cultivated taste. Thus the credence quality implies we assign quality to a cultural good before we have experienced it ourselves and conversely will not consume a good we have not heard anything about through external sources. What this implies is that for many consumers the main problem lies in evaluating rationally and intrinsically whether to purchase a credence good, because they can not determine how much value (over time) they will gain from it, i.e. they are unable to assign utility to the purchase. This is a crucial distinction between the involved and the casual consumers of cultural goods. This issue will be touched upon in chapter 2.3.

2.1.3 Music's distinctive attributes

The consumption and purchasing of music differs from other cultural goods such as films, books and single-player videogames in three significant but directly related ways that has implications how it is marketed and experienced: story unfolding; Generally music does not employ such a narrative structure that culminates in a (often climaxing) end or revelation (Straw, 2002). Music is meant to be heard repeatedly. Tied to this is another distinguishing feature, which also relates back to quality uncertainty characteristic mentioned above: consumption prior to or without purchase; As consumers we try to limit uncertainty of purchase through recommendations, reviews, trailers, former experience with the author/director/actor etc. Movies and books (like most consumer goods) are marketed in such a way that ultimate consumption occurs after purchase and consumers generally accept this quality uncertainty. Music however is promoted and sold in a way that you first experience the song (or entire album if you wish), what is commonly called 'sampling' (see 2.1.4) and then decide whether you wish to purchase it. Radio

programmers and marketers of course knew that prior exposure is a major factor in the desire to purchase music (Straw, 2002). Traditionally this held more strongly for popular music than for niche genres which receive little airtime and discussion in the media or promotion through tours (Lacher and Mizerski, 1994). Also, the purchase was not required unless the consumer desired to be in control of the music (Lacher 1989). But these latter two points have changed with the internet (see 2.2.4). Now, the sole reason to purchase may be that consumers purchase only if they value ownership of the original cd or digital file, rather than just having the ability to hear music. This brings us to the final characteristic: active or passive; People often listen passively to music (Bradshaw and Holbrook, 2008) because it is a) so all-pervasive in our daily lifes and b) it is free and can be listened to easily and for free via tv, radio, online (Mizerski et al., 1988). Often music then serves as a distraction. Active consumption is the type of consumption where people are more involved with music (Shankar, 2000) and choose to attentively listen to a specific artist or song and engage in concert attendance, record purchasing and acquiring of information and knowledge. So a strong hypothesis can be made for the case that music purchasing occurs only for consumers who are more 'actively' involved with music and value owning the original, either physical or digital, rather than 'passively' listening via free sources.

2.1.4 Digitization of music

The theories of cultural goods present a very useful way of analyzing the effects of digitization on the consumption of music, due to greatly increased possibilities of getting familiar with a lot of different music via: file-sharing networks; such as Napster and Kazaa Video-sharing community website(s); Youtube Review sites; such as Amazon and allmusic.com Word-of-mouth; through blogs and forums

The first two represent the importance of 'sampling' in music and have basically increased the sampling possibilities to the n-th degree. This ties back to the paradox of disclosure but makes matters worse because digital music files are, for all intends and purposes, perfect copies of the original and thus can serve as 'substitutes' for actual purchases. How this 'substitution effect' of downloading actually works out in practice as the direct impact on sales - is very difficult to determine (Handke, 2010) and may well prove to be nothing more than a counter factual argument (Liebowitz, 2006). Furthermore there is enough evidence that many consumers still buy music even after having downloaded it (Handke, 2010), i.e. the 'sampling effect'. Review sites and word-of-mouth (as well as the first two but not to such an explicit extent in my opinion) have vastly increased the exposure to niche genres and - if not resulted in increased sales - surely have increased consumer's knowledge and experience of music, which in economic terms would translate into increased consumer welfare. At the same time the wordof-mouth functions as a strong quality signaler for consumers who invest less in searching themselves. What this implies is that for many consumers the main problem lies in evaluating rationally whether to purchase music or not, i.e. music is for many a credence good. They can often even after having heard it - not determine how much value over time they will gain from the purchase and consequently are unable to assign utility to the purchase. This is a crucial distinction between the involved and the casual consumers. and is probably one reason that underlies many peoples preference for single songs, a process also known as unbundling (Elberse, 2010). These are often the more popular songs, hence it is easier on the learning aspect. From the seller perspective the exposure to and increased demand for niche genres has been labeled the 'The Long Tail' (Anderson, 2004), where niche products are consumed much more on the internet than in the physical domain6. Gobal, Bhattacharjee & Sanders (2006) for instance found that
6

The Long Tail often 'invites' misinterpretation. For a very detailed and insightful discussion on the The Long Tail see the online discussion 'Debating the Long Tail' between Harvard professor Anita Elberse and Chris Anderson. Many excellent user contributions can be read there as well. http://blogs.hbr.org/cs/2008/06/debating_the_long_tail.html

sampling has led consumers to purchase more music from independents or niche genres, and conversely led to decreased sales of stars. There is also evidence that online reviews for niche products have increased sales (Zhu & Zhang, 2010). There is a common conception that the internet blurs distinctions between experience and search goods (Alba et al. 1997; Huang et al., 2009; Klein 1998; Nakayama et al., 2010). The unlimited sampling possibilities have indeed vastly increased people's ability to assess the quality of music before buying, which makes music much more 'search-able', yet I believe because of the credence quality that music (and the cultural good in general) is not a search good. If there is any argument that can be made for this statement it is the fact that culture is increasingly delivered as a service of access to rather than ownership of the music, so people assess the quality of the service to see if it's worth the money, i.e. as I stated above: they assign utility to the service instead of the product itself.

2.2 The Music Industy

Though the issue of copyright lies outside of the scope and purpose of this paper, the vast amount of economic literature that analyzes cultural goods such as music warrants the need of it's inclusion in arguable any kind of market (related) paper. Furthermore, it has been argued that it is not possible to understand the cultural industries without studying copyright (Hesmoldhalgh, 2009; Vaidhyanathan, 2003). The reasoning and rhetoric behind the institution of copyright is that it is a way to arrive at an optimal level of supply of cultural goods with innovation and creativity being key to let this diversity in supply prosper. And this innovation and creativity can only be maintained by maintaining an efficient market protection mechanism that ensures remuneration of the creators. This reasoning has become the standard justification of copyright

since the 1970s (Handke, 2010) and it's based on the theories of public goods (Samuelson, 1954) and information goods (Arrow, 1962).
Public goods carry two main properties:

they are nonrivalrous, meaing that one person's consumption or use of They are nonexcludable, meaning that once they are produced, it is not

one unit does not impose limits on another's use of it. There is no scarcity. possible to to prevent other people to use the goods The digitization of music coupled with the advent of file-sharing networks thus created a host of economic problems. Music files lost their economic shell of protection given by copyright and became - analytically speaking complete 'information goods' (Shapiro and Varian, 1999) that differ from

most tangible goods because, while fixed costs of producing the first copy
tend to be very high, the variable costs for reproduction and marketing are very low (Landes and Posner, 1989). Furthermore, music started 'behaving' even more like a public good than before. This was disastrous in the industry's eyes. The creation and maintaing of artifial scarcity (Hesmondhalgh, 2007) is a main market device. Digital music is infinitely reproducible at zero marginal cost (Shapiro and Varian, 1999). Consequently, the economic value of an mp3 came infinitesimally close to zero (Wikstrm, 2009). Music became free. Much like the internet itself, music extolled the cyber ethics slogal 'information wants to be free!' In the first years of the twenty-first century the industry started publishing figures of increasing decline in sales and attributed this to the widespread phenomenon of illegal downloading. This resulted in a powerful lobby which brought about legislative measures that greatly increased the scope of copyright but furthermore arranged in such manner that ' benefits corporate interests at the expense of those of both artists and consumers' (Frith and Marshall, 2004, p.4). These legislative acts suggest that the stated purpose of copyright takes second note to offering protection to corporate interests (Hesmondhalgh, 2009). Ironically, the one group that is actually not at all surprised by the record industry's draconian ways of pursuing copyright legislation and enforcement are historians of copyright (Johns, 2009, QuestionCopyright.org, 2006). They know, what the general population is slowly finding out:

copyright was never enacted to to ensure payment for artist, but strictly for protecting distributors (QuestionCopyright.org, 2006). Adrian Johns rigorous historical analysis in fact shows how piracy has often even stimulated technological, intellectual and economic innovation rather than having inhibited it (Johns 2009). It is also evident that our modern day internet 'piracy' is just a dot on the history line. But online piracy too has shown to be an important source of innovation to industry incumbents as well as newcomers (Choi & Perez 2007). So the whole issue of piracy is not only complex, but more importantly naming the practise of file-sharing piracy hides the interconnectedness of music and sharing, as well as piracy and innovation. Rob Waldfogel, one of the leading researchers on downloading, music and copyright said: 'Beware of simple answers in debates about piracy. Our knowledge remains incomplete' (Waldfogel, 2012, p. 37). My research then focuses on what consumers value in the true spirit of marketing and consumer research.

2.3 CONSUMER BEHAVIOR

2.3.1 Hedonic consumption
Economic literature as mentioned distinguishes (primarily) search and experience goods. Marketing and consumer behavior literature has developed a similar distinction between utilitarian and hedonic goods. Utilitarian goods can be considered identical to search goods. Hedonic consumption is a stream within consumer research that addresses 'the multisensory, fantasy and emotive aspects of product use' (Hirschman and Holbrook 1982). It stands in contrast to the (still) dominant informationprocessing model with it's overly cognitive focus (Marsden and Littler, 1998), that typically shackles our perspectives (Tadajewski and Hewer, 2011). Hedonic products are aesthetic products such as music, literature, visual arts, and drama (Lacher, 1989).

Hedonic products are thus recognized for generating strong emotional involvement (Hirschman and Holbrook, 1982). They have also been studied in the context of the two most important constructs in consumer research: product involvement and knowledge (Park and Moon, 2003). This is especially important because of the link with the theory of experience goods. Consumers who are highly involved in a hedonic good recognize their lack of objective knowledge about the concrete attributes of the good (Park and Moon, 2003). On the other hand their level of subjective knowledge about the product is directly related to their level of involvement (Park and Moon, 2003), which illustrates the importance of the learning effect.

2.3.2 Music involvement and subjective knowledge

Involvement is a very important construct in consumer studies and has been studied in numerous contexts and is formulated in different ways. There is involvement in the product and in purchase decision, situational and enduring involvement. Product involvement is often defined as the personal relevance of the product to the consumer (Hightower et al., 2002) or a person's perceived relevance of the object based on inherent needs, values, and interests (Zaichkowsky, 1985, p. 342). Although it would seem logical to look more at purchasing involvement for understanding what determines consumer's purchasing, Mizerski et al. (1988) point out that purchasing involvement is defined as "a general measure of the self-relevance of purchasing activities to the individual" (Kassarjian, 1981, p. 73). Thus, this scale deals with interest in shopping itself, which is not the purpose here. Situational involvement is temporary and in a particular situation wheras enduring involvement is about an ongoing interest with a product or activity (Rothschild, 1979; Huang, 2006), that transcends situational influences (Houston and Rothschild,1978; Laurent and Kapferer,1985; Richins and Bloch, 1986). It describes the potential of the product/activity to deliver personal relevance (Higie and Feick, 1989). This form of involvement is thus intrinsically related to the degree that the product/activity is related to consumer's self-image, the pleasure obtained from thinking about or using

the product/engaging in the activity (Higie & Feick,1989; Richins & Bloch,1986). It's a more nuanced form of general product involvement. Thus, the emphasis lies on the product/activity itself and the inherent satisfaction the consumption gives. Studies have also discussed high enduring involvement in a product in terms of 'product enthusiasm' (Bloch, 1986) or 'deep involvement' (Holbrook, 1987). Deep involvement focuses on the consumption experience as an end in itself and plays a central role in shaping a person's identity construction (Holbrook, 1987). In studies of Popular Music and Media and Culture music has long been recognized for its identity creating and strengthening power (Bennett, 2000; Frith, 1995; Shankar, 2000). So enduring involvement could become a very important construct for hedonic goods, such as music, but it hasn't been researched thoroughly in literature (Hightower et al., 2002). So how does music ownership relate to involvement? Ownership in traditional economic theory is directly related to value and utility. But ownership and value are not simply about the price users pay for music, or the utility they assign to it, or even the means through which they acquire it (pay-per-purchase vs subscription), but they are also connected to the relationships consumers form with the product (Morris, 2010, 2011). Burkart (2008) tells of his conversation with Tarleton Gillespie in which they talk about two kinds of ownership in music: the first is financial ownership of the music product. I bought this, hence I own it. The second, and far more interesting, is what Gillespie calls the cultural ownership. This is my collection, it is part of who I am (Belk, 1995). Value is tied to both forms of ownership but cultural ownership is the more affective relationship between the consumer and the product (Fournier, 1998). The first work on measuring music involvement came from Dixon (1980) who developed a music involvement scale that measured: the number of hours spent listening to music, the frequency of concert visits, the number of purchases of recorded music, and the percentage of listening time they spent really listening. This is a behavioral manifestation of involvement similar to the scale developed for traditional products (Engel and Blackwell, 1982).

Later work (Mizerski et al., 1988) developed five measures of music involvement. Dixon's (1980) scale was captured by two behavioral measures, active and passive involvement; two experiential measures, which will not be discussed here because these are of a cognitive nature and meant to be tested in an actual experiment; and finally enduring music involvement. Active measured attendance at non-dance music concerts and purchase of music records. Passive involvement referred to time consumers spent listening to music on radio, television, and records. Enduring music involvement was designed to assess the importance of music to the person. This was found to be positively -but not strongly- associated with the intention to purchase, and strongly associated with the time an individual spends really listening and negatively to the propensity to be distracted by music while doing other tasks (i.e. engaged vs distracted listening). Flynn, Eastman, and Newell (1993) studied rock-music consumption and are the first to add consumer knowledge as a scale to the research, which captured both objective and subjective knowledge (i.e. self perceived). They found consumers who were highly involved with rock music also perceived themselves to be knowledgeable about rock music. They were also more likely to read rock magazines, spend money on rock-music, and spend time listening to rock. Objective knowledge was found, consistent with later research (e.g. Park and Moon, 2003), not to be related to involvement. Although the results for purchase behavior of these studies will not fully hold up for today, the importance of involvement is clear. Walsh et al. (2003) found in their research that there is strong reason to believe that the consumer's level of music involvement affects the choice of music format, such as cd's over digital downloads. North and Ishi (2006) researched CD purchasing among British and Japanese consumers and found that the need to be in control and involvement with music (together) have a strong correlation with purchase behavior. This confirmed Lacher's (1989) need to re-experience and be in control of music as important factors. Intuitively however the need to re-experience should lose it's strength for consumers that do not feel the need to be in control or own the music and/or

that already download a lot of music. This was not mentioned in this study however. Styven (2010) looked at music involvement and, based on the fact that 'physical formats persist as the preferred means of storing and listening to music for many consumers' (1088), researchers the relationship between music involvement, subjective music knowledge, mp3 player use and tangibility preference. The music involvement scale was constructed solely from the enduring involvement construct and captured two items: 'strong music interest' and 'music as part of lifestyle'. Subjective music knowledge (from Flynn et al., 1993) captured three items: 'one of the music experts', 'know pretty much about music' and 'don't feel knowledgeable about music'. Mp3 player use was taken from the work of Molteni and Ordanini (2003) and captured listening on 'mp3 player', 'mobile phone' and 'computer'. Styven found that music involvement is positively related to preference for the physical format. Subjective music knowledge was also consistent with prior research (Flynn et al., 1993; Flynn and Goldsmith, 1999) positively related with music involvement but only weakly with preference for the physical product. This might suggest that consumers like to know and learn a lot about music but don't necessarily value physical ownership. The highest involved consumers were also found to consume more digital music but don't value commercial online music services high, which is consistent with theory and research that digital music for this group is primarily a complement to the physical format and to sample (Handke, 2010; Kleinschmit, 2007; Sandulli, 2007). Based on the above research enduring music involvement seems to be strongly related to preference for physical ownership. Subjective music knowledge is strongly related to enduring involvement as well, but the strength of the relationship with purchasing or preference for the physical album remains unclear. Later research seemed to have decided to drop the behavior measures of involvement of Dixon (1980) and Mizerski et al. (1988) that mimics traditional products. The quantitative measure of 'how many/often in the last year' has been criticized by these authors because it does not take into consideration the possibility of sudden high one-time

expenditures that may have lowered the disposable income for music, furthermore the 'amount/times' last year as an objective measure may not be a proper reflection of such a subjective area of topic as hedonic consumption. The logical course of action then would be to adapt the active measure to a more subjective level to capture people's own perception of an average of their purchasing frequency (i.e. I buy a new album once a year, a few times per year or at least once a month) and a self-stated measure of how often they attend concerts (i.e. once a year, a few times per year, almost every month etc.). H.1 Highly involved music consumers strongly prefer physical ownership and have a lower preference for access. H2. Highly involved music consumers have a high subjective knowledge about music. H3. Highly involved music consumers will exhibit a higher score on the behavioral measures of involvement.

2.3.2 Digital music consumption

Molteni and Ordanini (2003) focused on digital music consumption, more specifically on the motivations ex-ante: why do consumers listen to music online; and ex-post: what do consumers do with music files after having downloaded it. They found for the ex-ante motivations: convenience, ease, discovery, extensive catalog and free. For ex-post: listening to, recording to CD and creating personal playlists. Sandulli (2007) similarly distinguished price, flexibility, discovery, assortment, convenience and community. These findings are largely similar to the work of Burkart and McCourt (Burkart, 2008; McCourt, 2005), more specifically that ease, convenience and community are the main reasons for listening via a subscription service, but that customizing and creating personal playlists is actually more important for those who prefer ownership. However creating playlists is one of the core

strenghts of the streaming service Spotify so this is not the case today anymore. It can also not be argued with that price is hard to beat with Spotify. But this needs to be judged with care, especially when comparing product with service. This topic lies beyond the scope of this paper. Since music is is intrinsically related to technological innovation (Ordanini and Parasaruman, 2011), theories of innovativeness and technology adoption should be able to explain a lot of the present empirical reality. Hansman et al., (1999) for instance found that innovativeness in terms of using new technology (cd player) increases with music involvement. However the mp3 has been developed outside of the market and was a 'largely unintended consequence of a multitude of factors' (Denegri-Knott and Tadajewski, 2010), which ultimately led to acceptance as the default music commodity (Sterne, 2009). As a non-market technological innovation which is also inferior in quality to the older format this link is even more difficult to establish. Styven (2010) did find that a high frequency of mp3 player use, while still related to involvement, leads to preference for digital music. The heavy use of a mp3 player may be the result of a strong desire for ease, convenience and customization (McCourt, 2005). Although ease and convenience lack abstract theoretical backing, there is nothing else that captures how important these two qualities for many modern music consumers are. H.4 Consumers who value ease, convenience and community highly will prefer access H.5 Consumers who value a large assortment and community highly will prefer access H.6 Consumers that listen to music mostly on the mp3 player will prefer digital ownership (songs).

2.3.3 The declining demand for and value of popular music

Traditional economic theories state that the demand of a good is directly related to four factors (Begg, Fischer and Dornbusch 1994): availability and price of related goods (substitutes and compliments) consumer taste price of the good consumer income

When we apply this to the case of music, it becomes immediately clear how the demand for recorded music has plummeted. Leyshon et al. (2005) make the case drawing upon a wider research project on e-commerce as well as findings informed by interviews with industry informants conducted both within Europe and the United States that the problems of the music industry had actually accumulated over time as a result of bigger cultural forces that have altered the role of music in society, and that the rise of file-sharing was 'a decisive tipping point' (p. 183). This is manifested in three ways: Firstly, the rising popularity of dance music and the club scene

which resisted capital exploitation due to status of the dj taking centre stage, literally. Attempts had been made to monetize on this market through branded cd's but ultimately the real cultural (and economic) value of music was generated by being there. Linked to this is the second manifestation, which is about the ways in which music consumption was increasingly linked to other media (and phenomena such as the music club), which led to the music being valued less for it's own sake than for its association with these media (films, tv, games). The third manifestation is the simple fact that popular music no longer commanded the attention of consumers on that same level as it once did. Popular music used to be young people's central cultural interest (Willis, 1990), but with the rise of other media and consumer electronics industries youngsters cultural habits changed resulting in less disposable income for music.

To strengthen his point further he argues the industry has actually been close to crisis since perhaps even the 1980s but was able to stall this with a series reproduction technology innovations, and quotes Breen:
..without the introduction of CDs, without classic hits radio, and without new markets in Asia and Latin America, popular music as we know it would no longer exist. The evidence is clear that popular music as a commodity is passing through a rapid transformation, assisted by the introduction of video games from Sega and Nintendo and related new technologies, which has heightened the anxiety circulating among some in the music promotion business. (Breen, 1995, p. 4978; in Leyshon, 2005, p. 183)

This is a very important explanation for changes in music purchasing then where file-sharing was only the final blow to the commercial power of records. At the same time, it is widely acknowledged that the price of a new music cd was outrageous (Coldry, 2004; Castells and Cardoso, 2012). More recently, concerts have become the preferred way of paying for and experiencing pop music for many. Festivals have become extremely popular as well and here the emphasis lies even more on the festive and communal aspect rather than the music itself. Related to Leyshon et al.s (2005) noted declining value of popular music is the fact that music albums and music collections do not have the same power in their identity construction as in previous generations (Wikstrm and Burnett, 2009).. The Pop Idol phenomenon (Fairchild, 2008; Jenkins, 2006; Wikstrm, 2006) is but one example of this. Young consumers celebrate and enjoy the stars of the season, but then a few months later have completely forgotten about them. This then also serves to explain the declining importance of actually owning a full-length music album. The worldwide succes of the hit-based compilation album is a further testament tho this (Wikstrm and Burnett, 2009). Consumers want pop songs, but have no loyalty to one artist. Although the theory of experience goods explains how the internet has made it possible for more people to increase their music knowledge, learn more about different music genres and enrich their taste, it is still

theoretically unclear how pop music has lost some of it's power. However, it is accepted that people are listening to and appreciating more indie music (see 2.3.3), not as a result of the declining value of popular music perse, but because the internet has enabled the cheap and fast creation and dissemination of music for many independent artists. Income is generally recognized as a strong determinant of consumer WTP for a good or service, but in regards to music this has not been tested robustly. Probably because most research into consumer WTP for digital music was targeted at students. It's intuitive enough to infer that students with a higher income are more willing to pay, but it's another thing to state that students with high income see value in paying for music. Even for older consumers, there is no statistical evidence how income correlates with music purchasing. This makes it difficult to say anything about the effects of income for the music consumer population at large. The following hypotheses will be tested in regards to the decline in demand of popular music: For the substition aspect: H.7 Music consumers that prefer to spend their money on other entertainment goods (films, books, games) will have less interest in purchasing music and consequently prefer free access via Spotify and Youtube. For the taste aspect: H8. Popular music listeners will have a preference for access.

2.3.4 Consumer attitude towards the industry

The music industry's crusade against it's own consumers and their filesharing activities is by now legendary. The industry's extremely rigid response to this technological innovation is hardly new however. The

musician Janis Jan wrote in her now famous article, responding to the industry crisis: '...let me remind you of something: the music industry had exactly the same response to the advent of reel-to-reel home tape recorders, cassettes, DATs, minidiscs, VHS, BETA, music videos ("Why buy the record when you can tape it?"), MTV, and a host of other technological advances designed to make the consumer's life easier and better. I know, because I was there.' 7 Other commentators are less merciful to the music industry's practices: The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs. There's also a negative side. (Hunt S. Thompson) The greed of the music industry was as unrestrained as their enthusiasm for the digital domain [the cd]. In addition to highly exploitative, exceptional labour contract conditions that stripped ordinary workers rights from musicians, the music industry squeezed the retail outlets to hike prices, threatening them with severe retributions for failure of compliance. We know the rest of the story. (Poster, 2004, p. 419) The reason why I am writing this is because this is not some insider story or information that resides somewhere in the far corners of the internet or in academic literature. No, it lives among consumers which, even if not at a cognitive level, is personally felt and leads to apathy towards the industry and complete indifference to intellectual property rights (Choi & Perez, 2007; Higgins, 2007; Leyshon, 2009; Ouellet, 2007). In my pilot study this is also confirmed. I frequently encountered a negative attitude towards the music industry. Many a opinion may be formed by media stories of the dealings of the recording industry. I found a number of people making the rather ambiguous statement that artists make enough
7

The Internet Debacle: An Alternative View at www.janisian.com/reading/internet.php (Originally published in Performing Songwriter Magazine, May 2002)

money already, which after further questioning revealed that these were mostly casual pop music listeners. Other more involved consumers showed reasonably well informed opinions on the capitalistic greed which resulted in bad treatment of artists and overpriced CD's. This finding of negative attitude towards the industry is in line with many other findings (Condry, 2004; Giesler & Pohlmann, 2003; Huang, 2005; Levin et al, 2004; Walsh, et al., 2003). Ian Condry notes in his study on the illegal downloading among students that they respond to the industry's public rhetoric against file-sharing by questioning the industry's 'own stealing and ethics' (2004; p. 356). His findings go even further:
'One finding surprised me the most. In class, when I play devils advocate and try to get students to feel guilty about file sharing, Ive been struck by how resolutely they defend their actions by referring to record company injustices, celebrity compensation, deceptive marketing, and unfair prices. In the fall of 2003, I started asking students a new question: Is there some music you would always pay for? Most students said yes. They mentioned indie artists, or artists from their hometown, whom they know need the money. Some students identified major groups with a solid track record of good albums. Other students mentioned entire genres of music, notably, jazz and classical music, because they stand the test of time, and because they are not adequately supported by major record companies.' (2004: 358, emphasis added)

The attitude against the industry is then offset by an appreciation of and loyalty to indie artists (see 2.2.3). In marketing theory the one thing, which is the most powerful 'tool' that connects the consumer with the company, is the brand (Fournier, 1998), but with cultural goods like music consumers do not identify with the labels but with the artist (Poster, 2004). This brings up the important point of customer loyalty towards the artist. Clearly, when consumers so equivocally speak of the greed of the industry and hardly think of whether downloading harms the artist, does this mean they equate the music they download with rich artists? Will consumers then experience more satisfaction from purchasing indie or niche genres? Ouellet (2007) researched whether 'attitude towards the artist' effected consumers decision to buy music instead of illegally downloading it.

Consistent with brand relationship marketing (Fournier, 1998), the study found that the strength of the relationship between the artist and the consumer has effect on their willingness to purchase. At the same time, excessive success of an artist would increase their propensity to illegally download. Other research have showed as well that consumers engage in non-market conform behavior when they feel artists charge too much or make enough money already (Ouellet, 2007).

The following hypothesis will be tested in regards to the attitude towards downloading H.8 Consumers of indie pop or niche genres will have a higher loyalty to the artists they listen to. H.9 Higher loyalty leads to preference for ownership.

2.3.5 Experience seeking

A final construct within the hedonic literature that is important for my paper is The general construct 'experience seeking' which can be split into three seperate constructs: cognition seeking, sensation seeking, and novelty seeking (Hirschmann, 1984). Music has been studied in relation to sensation seeking (Lile and Zuckerman,) and cognition seeking (Mizerski et al., 1988), which were applied specifically for recorded music but have afterwards not been elaborated upon. For my paper I believe novelty seeking can be a usefull indicator of concert and festival attendance. Novelty seeking is 'the desire of the individual to seek out novel stimuli' (Hirscmann, 1984, p. 120). What consumers seek out are novel, new, exciting and unusual experiences (Spangenberg et al., 1997). This perspective has been studied in relation to festival attendance (see Spangenberg et al., 2006), but I want to incorporate this into concert attendance as well. Full use of the construct in relation to the other two

construts lies beyond the purpose of this paper so novelty seeking will be used on it's own. (how to set up this scale for concert and festival preference without having to use all the items that are normally used?)

2.3.6 Demographic variables

In consumer research demographic variables age, gender, income, education - are considered very important bases to segment, but it is recognized that the factors used for segmentation may be less relevant today (Cova and Cova, 2002) and for music specifically this also appears to be less relevant and useful to market and distribute music products (Nutall et al., 2011). Pop music was traditionally intrinsically connected to youth culture (Hebdige, 1979) and the music-marketing machinery was consequently focused on reaching primarily teenagers. However this has started to change (IFPI, 2005). Today older consumers buy more music than the teenage audience. Data from the US music industry for instance show how consumers of 40 and older have become the single most important consumer segment (Wikstrm and Burnett, 2009). In 1990, this segment was responsible for merely 15% of total music sales. Now, fifteen years later, this 40 and older group represents 35% of market (Wikstrm and Burnett, 2009). More interestingly for my case is the fact that the worlds oldest consumers are in Hungary and the Netherlands8. Yet most research into consumer WTP for digital music (e.g. Chiang and Assane, 2009; Fetscherin and Lattemann, 2007; Filimon et al., 2010; Sinha and Mandel, 2008) has been focused on students. And all these papers conclude with the suggestion that research needs to include other age groups as well to also get a better picture of the correlation with age and income. Secondly, this research has been conducted almost exclusively in the United States. Results for especially education can very greatly, due to the
8

Music buyers 'are growing older', Tuesday, 2 August 2005, Washington Post (www.washingtonpost.com/blogs/style-blog/wp/2013/04/11/vinyl-records-are-more-popular-now-than-theywere-in-the-late-90s)

high correlation of income with good education. In the Netherlands, education has a government-fixed fee to enable the entire population to achieve schooling. Gender seems to be a underesearched topic as well. So based on this, I expect to find results only for age, and there only in respect to their purchasing behavior. Preference for access or ownership are unclear. H.10 Older consumers that are highly involved with music will generally show a higher score on the active behavioral measure of involvement