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

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  • Parry, Glenn
  • Bustinza, Oscar F.
  • Vendrell-Herrero, Ferran

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.

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  • Parry, Glenn & Bustinza, Oscar F. & Vendrell-Herrero, Ferran, 2012. "Servitisation and value co-production in the UK music industry: An empirical study of Consumer Attitudes," International Journal of Production Economics, Elsevier, vol. 135(1), pages 320-332.
  • Handle: RePEc:eee:proeco:v:135:y:2012:i:1:p:320-332
    DOI: 10.1016/j.ijpe.2011.08.006
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    2. Xing, Yijun & Liu, Yipeng & Tarba, Shlomo & Cooper, Sir Cary L., 2017. "Servitization in mergers and acquisitions: Manufacturing firms venturing from emerging markets into advanced economies," International Journal of Production Economics, Elsevier, vol. 192(C), pages 9-18.
    3. Mariachiara Barzotto & Lisa De Propris, 2021. "The value of firm linkages in the age of industry 4.0: a qualitative comparative analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 67(2), pages 245-272, October.
    4. Lafuente, Esteban & Vaillant, Yancy & Vendrell-Herrero, Ferran, 2017. "Territorial servitization: Exploring the virtuous circle connecting knowledge-intensive services and new manufacturing businesses," International Journal of Production Economics, Elsevier, vol. 192(C), pages 19-28.
    5. Vendrell-Herrero, Ferran & Bustinza, Oscar F. & Opazo-Basaez, Marco, 2021. "Information technologies and product-service innovation: The moderating role of service R&D team structure," Journal of Business Research, Elsevier, vol. 128(C), pages 673-687.
    6. Wim Coreynen & Arjen van Witteloostuijn & Johanna Vanderstraeten, 2021. "Toward Servitized Research: An Integrated Approach for Sustainable Product-Service Innovation," Sustainability, MDPI, vol. 13(15), pages 1-21, July.
    7. Vendrell-Herrero, Ferran & Para-González, Lorena & Mascaraque-Ramírez, Carlos & Freixanet, Joan, 2024. "The order of the factors matters: How digital transformation and servitization integrate more efficiently," International Journal of Production Economics, Elsevier, vol. 271(C).
    8. Kumar Rakesh Ranjan & Stuart Read, 2016. "Value co-creation: concept and measurement," Journal of the Academy of Marketing Science, Springer, vol. 44(3), pages 290-315, May.
    9. Lütjen, Heiner & Tietze, Frank & Schultz, Carsten, 2017. "Service transitions of product-centric firms: An explorative study of service transition stages and barriers in Germany's energy market," International Journal of Production Economics, Elsevier, vol. 192(C), pages 106-119.
    10. Glenn Parry & Oscar Bustinza & Ferran Vendrell-Herrero & Nicholas O’Regan, 2016. "Internationalization of Product-Service Systems: Global, Regional or National Strategy?," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 10(1), pages 16-29.
    11. Jang, Kyeong Kook & Bae, Joonheui & Kim, Kyung Hoon, 2021. "Servitization experience measurement and the effect of servitization experience on brand resonance and customer retention," Journal of Business Research, Elsevier, vol. 130(C), pages 384-397.
    12. Naveed, Kashif & Watanabe, Chihiro & Neittaanmäki, Pekka, 2017. "Co-evolution between streaming and live music leads a way to the sustainable growth of music industry – Lessons from the US experiences," Technology in Society, Elsevier, vol. 50(C), pages 1-19.
    13. Vendrell-Herrero, Ferran & Gomes, Emanuel & Collinson, Simon & Parry, Glenn & Bustinza, Oscar F., 2018. "Selling digital services abroad: How do extrinsic attributes influence foreign consumers’ purchase intentions?," International Business Review, Elsevier, vol. 27(1), pages 173-185.
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    15. Green, Maxwell H. & Davies, Philip & Ng, Irene C.L., 2017. "Two strands of servitization: A thematic analysis of traditional and customer co-created servitization and future research directions," International Journal of Production Economics, Elsevier, vol. 192(C), pages 40-53.

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