Master Thesis Moran HANANE-To what extent has digitalisation changed the music industry

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To what extent has digitalization changed the music industry ?
GRADUATING PROJECT
PGE - Moran HANANE
Submitted on 15/10/2014
Graduating project Supervisor: Joseph FROMONT

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To what extent has digitalization changed the music industry ?
Moran HANANE
Submitted on 15/10/2014
Number of words (for everything, excluding the appendices): 19 561
Graduating project Supervisor: Joseph FROMONT

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Acknowledgements
This master thesis has been a long-term endeavor, during which I have been
helped by several people either working in the music industry or fond of music and
able to bring me specific and useful knowledge. Thus I would like to thank the
following people for their contributions to my work.
 Nicolas RENAULT, Raphaelito GOMEZ, Fabien DANESHVAR and Martin LEROCH: I
interviewed these people and they gave me precious information about the music
sector in the frame of my qualitative study.
 165 anonymous respondents who answered to my questionnaire and enable me to
have consistent data to analyze for my qualitative study.
 Pauline MISSET and Ali BOUMEDIAN, respectively Senior research executive at TNS
Sofres and Engineer at Renault, who gave me a precious helping hand when I
needed technical help to carry out advanced analysis on EXCEL.
 Michelle ORR, an American friend of mine who advised me when I needed help for
the idioms when writing my GAP.
 Joseph FROMONT who corrected my GAP proposal and guided me in the progress
of my work.

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FICHE Graduating Project
Nom et Prénom de l’étudiant(e) :Hanane Moran
Programme suivi : PGE
Si le mémoire est lié à un stage :
Dates du stage :
ENTREPRISE : ...........................................................................................................................
Adresse : ..................................................................................................................................
Tél.........................................................Pays : .........................................................................
Secteur d’activité : ...................................................................................................................
Titre du Graduating Project :
To what extent has digitalization changed the music industry?
Nombre de pages : 104...........................................................................................................
Date de remise de mémoire : 15/10/2014
Annexes : OUI x NON 
Confidentialité : OUI  si oui, durée :................. NON x
THEME DU MEMOIRE : (3 à 5 lignes)
Ce mémoire a pour but d’évaluer l’impact qu’ont eu les nouvelles technologies liées
à la digitalisation sur l’industrie musicale. Il se compose d’une étude menée auprès
d’acteurs de l’industrie du disque (professionnels et amateurs) et d’un volet
quantitatif mené auprès du grand public, consommateur de musiques et qui utilise
internet.

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ATTESTATION SUR L’HONNEUR
Je soussigné(e), Moran HANANE, atteste sur l’honneur que ce
Graduating Project est le fruit d’un travail personnel et n’a fait
l’objet d’aucun emprunt illicite sur quelque support que ce
soit.
De plus, il n’a fait l’objet d’aucune présentation pour un autre
diplôme.
Fait à Clichy-la-Garenne, le 12/10/2014
Signature

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Acknowledgements 2
FICHE Graduating Project 3
Table of contents 5
Glossary 10
Introduction 12
1. Review of business context and theoretical background 14
1.1 Theoretical background 14
1.2 History of the music industry 18
1.2.1. Early History 18
1.2.2. Radio popularity and the first crisis in the music industry 20
1.2.3. Appearance of rock”n’ roll and of the microgroove format 22
1.2.4. Reorganization of the Majors,2nd crisis of the music industry and
launch of the CD
22
1.3 How to explain the current crisis? 24
1.3.1 New technologies and piracy 25
1.3.2 Inability to learn lessons from the past 27
1.3.3 End of the life cycle of the CD 28
1.3.4 Loss of quality and diversity of music 30
1.4 Interest of this study 31
1.5 Hypotheses and investigative questions 33
2. Literature review 34
2.1 Literature review 34
2.2 Conclusion of the literature review 38
3. Methodology and approach 39
3.1 Initial approach 39
3.2 Action plan 41
3.3 Constraints and limitations expected 44
3.4 Development of my investigations 46
3.4.1 Qualitative survey 46
3.4.2 Quantitative survey 52
4. Results & analysis 57
4.1 Qualitative survey 57
4.2 Quantitive survey 57
4.2.1 Validity of the results 57
4.2.2 Results of the quantitative survey 62
4.2.2.1 Principal results and general trends 62
4.2.2.2 Advanced results and further analyses 69
Overall conclusion 75
Bibliography 79
List of tables and illustrations 83
Appendixes 85

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Glossary
1. Music industry wordings
 78 rpm: also called “78 revolutions per minute” or “78”, is a phonographic disk with
lateral cutting that works by turning around 78 tours per minute. It used to be the
main physical music support sold between the 20s and the 50s.1
 Booking agent: Booking agents find concerts and festivals for musicians and artists
so that they can realize live performances.
 Copyright: It is the whole privileges that a company, an association, an institution or
a person has over a physical or intellectual fulfillment. It is based on the link
between an author and his/her work.2
 Digitalized/ dematerialized copy of a product: digital content, designed to be
processed and used through the use of electronic devices such as computers, MP3
players, etc.
 Dummy head recording: It is a “method used to make binaural recordings that
allows a listener wearing headphones to perceive the directionality and the room
acoustics of single or multiple sources.”3
 Electrical recording: Technical breakthrough in the music history that corresponds
to the beginning of the era of recordings through a microphone.
 Entertainment industry: “Entertainment industry is used to describe the mass
media companies that control the distribution and manufacture of mass media
1
http://fr.wikipedia.org/wiki/Disque_78_tours (accessed on 13.09.2014)
2
http://fr.wikipedia.org/wiki/Copyright
3
http://en.wikipedia.org/wiki/Dummy_head_recording

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entertainment. Generally, the entertainment industry includes the fields of theater,
film, fine art, dance, opera, music, literary publishing, television, and radio.”4
 Graphophone: Registered trademark corresponding to the improved version of the
phonograph.5
 Hardware copy of a product: physical form of product. In the music industry, these
are mostly CDs and DVDs.
 Lateral cutting: “Cutting containing lateral information intended for reproduction.
Such discs may also have vertical components intended for reproduction. Most
contemporary discs (i.e., all quadraphonic discs and nearly all stereophonic discs)
contain both vertical and lateral information and are code.”6
 Patent infringement: “Infringing a patent means manufacturing, using, selling or
importing a patented product or process without the patent owner's permission.”7
 Peer-to-peer software: Enables to access P2P file sharing networks and so exchange
files, documents and digital content with other P2P software owners. Each owner of
P2P software wishing to exchange data with others has similar responsibilities and
capabilities.8
 Performance rights organization: A performance rights organization (ex: SACEM in
France) collects royalties paid by parties who wish to use copyrighted works publicly
(night clubs, restaurants, shops, etc.) for copyright holders (artists and/or labels in
the music industry).9
4
http://definitions.uslegal.com/e/entertainment-industry/
5
http://fr.wikipedia.org/wiki/Graphophone
6
http://www.loc.gov/marc/bibliographic/bd007s.html
7
http://www.ipo.gov.uk/types/patent/p-other/p-infringe.htm
8
http://compnetworking.about.com/od/p2ppeertopeer/a/p2pintroduction.htm
9
http://en.wikipedia.org/wiki/Performance_rights_organisation

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 Phonograph: The phonograph, conceived by Thomas Edison, was the first device
able to reproduce sounds through a purely mechanical process.10
 Publisher: A publisher is responsible for ensuring that the authors of a music
(songwriters, composers, singers, musicians) get paid when their music is used in a
commercial purpose. They protect copyrights with contracts and can provide
advances to the authors of music against future incomes.11
 Producer: A music producer is a project manager for the recording, mixing and
mastering process of music creation.12
 Record label: A record label is in charge of the marketing (promotion, pricing,
packaging) and the coordination of the distribution process after music production.
They are often also publishers (see definition above).13
 Replacement effect: Caused by the illegal download of a copyrighted music, the
replacement effect causes the illegal ownership of a song/music by a customer that
would have buy it instead if this song/music would not have been available illegally
for free on the internet.14
 Sampling effect: “prompts some consumers to purchase a legal copy of a product
they already get for free in a low quality pirated version”.
 Vertical cutting: Cutting with no lateral information intended for reproduction. All
cylinders and some early discs have this cutting.15
10
http://memory.loc.gov/ammem/edhtml/edcyldr.html
11
http://musicians.about.com/od/publishingandroyalties/f/What-Does-A-Music-Publishing-Company-
Do.htm
12
http://productionadvice.co.uk/what-is-a-producer/
13
http://entertainment.howstuffworks.com/record-label1.htm
14
The Music Industry in the Digital Era: Towards New Contracts?
15
http://www.loc.gov/marc/bibliographic/bd007s.html

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2. Business/economic concepts
 Blue ocean strategy: Is a strategic business concept proposed in 2004 by W. Chan
Kim and Renée Mauborgne. This model explains how a company can generate a
high profit and achieve a high growth by operating in a brand new or uncontested
market (Blue Ocean) and thus creating a new need amongst people, instead of
operating in already existing and competitive markets (Red Oceans).16
 Business model: A business model is a document representing synthetically the
objectives of a company and how it intends to achieve these objectives (ability to
succeed within competition, to create added value, etc…), in order to give an
overview of the entrepreneurship vision of the founders. Yet, the expression
“Business model” is also often directly referred to as the way the company works
and the specificities of this way of working.17
 Competitive advantage: This concept, proposed by Michael Porter, includes every
element that can enable a company to break away from its competitors.
 Customer segmentation: “Customer segmentation is the practice of dividing a
customer base into groups of individuals that are similar in specific ways relevant to
marketing, such as age, gender, interests, spending habits and so on.”18
 Decongestion (economics): Lifting on the control of an economic sector by a few
companies, which had the monopoly over this sector through agreements, mergers
and acquisitions, acquisition of holdings in their respective equities, or any other
way of monopolistic control over these companies and/or the economic sector they
were operating in.19
16
http://fr.wikipedia.org/wiki/Strat%C3%A9gie_oc%C3%A9an_bleu
17
http://fr.wikipedia.org/wiki/Business_model
18
http://searchcrm.techtarget.com/definition/customer-segmentation
19
http://www.dictionnaire-juridique.com/definition/concentration-economique.php

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 Disruptive innovation: Proposed in 1997 by professor Clayton M. Christensen in his
book “The Innovator’s Dilemma”, the concept of disruptive innovation corresponds
to a breakthrough that first leads to the creation of a brand new market and then
overtakes previous markets by replacing an earlier technology and lowering costs in
these markets. A good example is the launch of the Ford T model, the first
affordable automobile thanks to Ford’s scientific management model.20
 Distribution channel: This is the travel through which goods and services go from
the vendor to the consumer.
 Economy of scale: Economy of scale is a cost advantage for manufacturing
companies due to increased output of a product. It is based on the inverse
relationship between quantity produced and the per-unit fixed costs.21
 First mover advantage: Advantage, for a company, for being the first to enter a
specific market/industry. It allows the company to benefit from a higher brand
recognition and customer loyalty, and anticipate product/service improvements.22
 Gilded Age: Period of the history of the USA (1865-1901) that corresponds to the
flourishing times (economic, demographic and industrial growth) that followed the
end of the American Civil war.23
 Lead user: A lead user (concept first proposed by Von Hippel in 1999) is a person
that has a particular need in his/her everyday life that no product/service available
on the market has been able to meet yet. This person will then develop this product
and it will spread to the whole society, creating a new market to answer this need.24
20
http://en.wikipedia.org/wiki/Disruptive_innovation
21
http://www.investopedia.com/terms/e/economiesofscale.asp
22
http://www.investopedia.com/terms/f/firstmover.asp
23
http://fr.wikipedia.org/wiki/Gilded_Age
24
http://www.theinnovation.eu/article/42

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 Meso-environment (of a company): Intermediate level between the micro-
environment of a company (organizational level including missions, prospects,
strategy, resources, etc.) and its macro-environment (contextual level, PESTEL
model). The meso-environment actually refers to the whole market/industry in
which the company operates (customers, suppliers, competitors, subcontractors,
distribution network, etc.).25
 Merger and acquisitions (also called M&A): Refers to the aspect of corporate
finance strategy and management dealing with the merging and acquiring of
different companies as well as other assets.26
 Niche market: Small, specific and very well defined segment of customers.
Identifying and satisfying needs of these targets that are so far poorly addressed by
other firms, enables a company to play in a low-competitive market.27
 Stars: Part of the business strategic tool called “Growth–share matrix” or “BCG
Matrix”, a star product/service is a unit with a high market share in a fast growing
industry. They are often expected to become the companies’ future cash cows (high
market shares in a slowly growing industry) when the market growth slackens.28
 Take-over: “When an acquiring company makes a bid for a target company. If
the takeover goes through, the acquiring company becomes responsible for all of
the target company’s operations, holdings and debt”.29
 Word-of-mouth: Communication strategy aiming at promoting a brand, a product,
a campaign, through oral data transmission (mainly from customers to customers)
25
http://foresightcards.com/background-information/macro-meso-and-micro-environment/
26
http://whatis.techtarget.com/definition/mergers-and-acquisitions-MA
27
http://www.businessdictionary.com/definition/niche-marketing.html
28
http://www.netmba.com/strategy/matrix/bcg/
29
http://www.investopedia.com/terms/t/takeover.asp

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Introduction
A survey led by Gfk Consumer choice dealing with the sales of cultural
products (books, videos, video Games and Music) in France revealed that the sales
of digitalized products have increased by 23% from 2011 to 201330
, whereas the
sales of hardware copies of these products have sunk by 6%. This trend is not
specific to our country and reveals a structural change in the cultural products
industries due to the mass equipment of households with the internet worldwide.
This change is peculiarly marked in the music industry, by Aymeric
Pichevin31
, who already predicted in 1997 that the extensive spread of the internet
was going to upset the structure and the running of the music industry.
Sales of music albums indeed reached a peak in 1999, and then continuously
decreased by 40% by 2012.32
However, we see that in 2012, for the first time since
1999, worldwide music industry sales rose by 0.3 % (see appendix 1).That means
that the music industry seems to live now at a turning point - where a new
equilibrium has been reached and new business models have been found to get out
of the structural crisis it has known for almost 15 years.
Here we have a surprising paradox: from the mass equipment of the Internet
worldwide, more and more people can quickly have access to any source of music
they are looking for (streaming, downloads, web-radios…), and are able thus to
consume the music they want. On the other hand, it’s obvious that the amount of
people willing to pay for music is dropping … as they can have it (illegally) for free!
From this fact, it seems interesting to study the evolution of our relation to
music over the past decade, to find out how new ways of purchasing music have
been set to counter illegal download, and above all to study how the main agents of
30
C. Fages, 2013, Le marche des biens culturels dématérialises représente 943m d’euros en 2012, Available at
http://frenchweb.fr/le-marche-des-biens-culturels-dematerialises-represente-943m-deuros-en-2012/103860 , [Accessed: in
March 2013]
31
A. Pichevin, 1997,Le disque à l'heure d'Internet, Editions L'Harmattan,
32
A. Beuve-Méry, 2013, L'industrie musicale inverse la courbe des ventes pour la première fois depuis 1999, available at
http://www.lemonde.fr/economie/article/2013/02/26/l-industrie-musicale-inverse-la-courbe-des-ventes-pour-la-premiere-fois-
depuis-1999_1839180_3234.html [Accessed: in March 2013]

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the music industry lived the transition from the physical form of a musical product
to its dematerializing.
I thus decided to lead my research based on the following research question:
“To what extent has digitization changed the music industry?”
To begin with, we will have a further look at the theoretical background and
the business context of my study… What is exactly the crisis in the music industry,
its meaning and implications for the firms and associations of the music sector, but
also for the whole entertainment industry? I will also explain the sake of my work
concerning my personal background, but also regarding the expected output for the
music industry and the previous studies lead on that topic.
Then, we will go into the theoretical background of the topic in depth
through a Literature review… In this regard, we will formulate a few hypotheses,
study academic articles, and possibly refine the hypotheses afterwards and then
investigate fully new interesting topics that might arise from that work.
Over a third phase, I will explain my initial approach to carry out this work,
the expected constraints and limitations, and the detailed proceedings of my
investigations.
To finish with, I will present both the results of the qualitative and the
quantitative analyses that I carried out, and I will analyze them in detail.

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1. Review of business context and
theoretical background
1.1 Theoretical background
In this part, we are going to have a further knowledge of the context
of my study, and especially concerning matters implied by my subject and the
whole structure of the music industry.
Now, before we begin the literature review, we have to define and clarify the main
concepts of our Research questions and of the hypotheses we stated.
Foremost, I would like to address the main
concept of my research: the digitalization. Basically,
digitalization is the “conversion of analog information
in any form (text, photographs, voice, etc.) to digital
form with suitable electronic devices (such as a
scanner or specialized computer chips) so that the
information can be processed, stored, and transmitted through digital circuits,
equipment, and networks” (businessdictionary.com)33
. Then, many kinds of data can
be digitalized: written files, videos, audio tracks… This process and the share of
digitalized contents have been widespread with the boom of mp3 players and peer-
to-peer software (e.g. e-mule, Limewire, Shareaza, etc.) in the early 2000s.
33
Digitization, businessdictionary.com (unknow author) , Available at:
http://www.businessdictionary.com/definition/digitization.html(accessed on 23rd May 2014)
Fig 1.1

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Fig 1.2
Peer-to-peer software has enabled people to share music, films and files, no matter
if they have copyright or not, through the internet. Thus this phenomenon has led
to a drop in sales of cultural products, especially music albums, and a raise in sales
of electronic devices conceived to store this content. The music industry has been
upset for more than a decade by this trend.
But what does music industry mean? Essentially, the music industry “involves the
production, distribution, and sale of music in a variety of forms as well as the
promotion of live musical performance” (encyclopedia.com)34
. It broadly includes
“companies and professionals who create and sell recorded music (e.g., music
publishers, producers, recording studios, engineers, record labels, retail and online
music stores, performance rights organizations); those that present live music
performances (booking agents, promoters, music venues, road crew); professionals
who assist musicians with their music careers (talent managers, business
managers, entertainment lawyers); those who broadcast music (satellite, internet
and broadcast radio); journalists; educators; musical instrument manufacturers; as
well as many others.”(wikipedia.com)35
.
34
Miller, Karl (2003), Music Industry, Available at: http://www.encyclopedia.com/doc/1G2-3401802800.html (accessed on
23rd May 2014)
35
Music industry, wikipedia.org (2012), Available at [http://en.wikipedia.org/wiki/Music_industry] (accessed on September
2013)

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Fig 1.3
I think yet that this definition doesn’t emphasize the role of the final
customer (i.e. “the public”, as shown in the figure above), which is crucial, as we are
going to see…
Now that we have defined digitalization and music industry are, it is
important to have a further look on two essentials notions within the frame of my
study: the concepts of disk crisis of new technology.
The expression “disk crisis” refers to a crisis of the whole music industry. The
use of this expression is quite simple: since the physical sales have always been the
main source of income for the music industry (see appendix 2) structural drop in
sales of physical format often caused a slackening of in the entire music industry.
Actually the word “crisis” stems from the ancient Greek word “krisis”, which means
“choice”, “action” or “turning point in a disease”36
, that is to say that crisis is the
moment to make a choice, to take action when a situation has become critical.
Concerning the current disk crisis, the critical situation is the steady decline of the
music sales37
, and the problem is that neither real action nor plan has been
36
« Crisis” (unknow author) , etymonline.com , Available at:[http://www.etymonline.com/index.php?term=crisis]
37
Marché 2012 Musique, S5]

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implemented by the main agents of the music industry to counter the decline(see 3.
“How to explain the current crisis”).
In fact, in the next section (2. “A brief history of the music industry”) it will
become apparent that most crises that have occurred in the music industry have
been linked with the widespread of new technologies...If we consider the very word
“technology”, we find two definitions that are roughly the same but they are
focused on different notions… Oxford dictionary provides two slight differences:
either technologies are “The branch of knowledge dealing with engineering or
applied sciences” (oxforddictionaries.com)38
or “Machinery and devices developed
from scientific knowledge”. The second definition is much more suitable to describe
a product derived from new technologies i.e. to describe high-tech products. On
that point, we saw briefly that high tech products, and especially electronic devices,
have been critical in the digitalization process.
But there is a paradox: technologies are usually supposed to help businesses
process their operations more efficiently and bring wellbeing to individual’s lives,
but as a matter of fact, a new technology often takes the place of an older one that
had the same function...This is why several crises have occurred in the history of
music industry.
38“Technology”(unknow author),oxforddictionaries.com,
Available at:[http://www.oxforddictionaries.com/definition/english/technology]
Fig 1.4
Fig 1.5

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1.2 History of the music industry
1.2.1. Early History
Daniel Lesueur, a French music journalist who has published 30 books
about music, creates 2 very different stages from the very beginning of the music
industry till the 2nd
world war: A quick growth until 1929 and then the
consequences of the economic crisis and the omnipotence of radio in the 30s39
. The
music industry, like several other industries and economic sectors, lived a quick and
fast growth during the Belle Epoque in Europe and the Gilded Age in the USA…
before it got bogged down in crisis during the Great Depression. The beginnings of
the music industry were supported by regular and quick technical advances. Two
phases in the development of the music industry can be identified until 1929: The
development of acoustic methods, more or less matching with the early
commercialization, and then the arrival of the 78 rpm.
The history of the first records is closely linked to that of phonograph
(Charles Cros, Thomas Edison and Emile Berliner)40
. On December 19, 1877, Thomas
Edison registered a patent on several methods of recording and reproducing sound.
On January 15, 1878, he gives a further description of the unit referred to as
"phonograph". At the time of the phonograph, the idea was to cut a groove into a
rotating disc and convert the signals into sounds (vertical Cutting on wax cylinders).
Emile Berliner invented the lateral cutting (winding flat cutting with constant depth)
in 1888.
39
D. Lesueur « L’histoire du disque et de l’enregistrement sonore »Éditions alternatives, 2006,175p
40
« Apprenez-en plus sur les origines du disque et ses évolutions ! »(unknownauthor, 2004), maxi-records.com ,Available at:[
http://net.for.free.fr/maxirecords/disquehistoiredisque.htm]

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Meanwhile, music recording gradually became a flourishing
industry…The phonograph was indeed a disruptive innovation insofar as it was the
first device ever that enabled to record musical performances41
. Yet, Chichester Bell
(the brother of Alexander Graham Bell) developed in 1888 a serious competitor to
the phonograph: the Graphophone. This device was a real improvement on ease of
operation and fidelity of sound reproduction compared to the phonograph.42
Both
products struggled in the 1890s to win the general public’s preference and the
music industry becomes a real business over that decade. In 1890 the first purpose-
built recording studio opened: the New York Phonograph Company. In 1894, the
Pathe brothers launched their phonographs and cylinders company in France. In
1901, the competition became tougher and litigation between rival companies due
to patent infringement threatened the music industry. In 1903, the Italian opera
singer Enrico Carusois was the first artist to sell over a million copies with his song
“Vesti la giubba”.
In the 1900s, the graphophone gradually gets the upper hand on the
phonograph, which loses its first mover advantage… The final demise of the
phonograph is only due to the first jazz releases on cylinder.
In 1914, Victor and Columbia share out the U.S. market. Thanks to
technical progresses, the price of disc players decreased and, at the same time,
there was a drop in cost reproduction prompting many firms to specialize in artists
recording43
. De facto in 1920, the number of record labels grew and 50% of
41
http://en.wikipedia.org/wiki/Music_industry#Early_history
42
Fink, Michael. Inside the Music Industry, 2nd edition.New York: Schirmer Books, 1996
43FLICHY, P., Une histoire de la communication moderne: Espace public et Vie privée, Paris, Editions La Découverte,
Collection Sciences humaines et sociales n° 24, 2004.
Fig 1.6 Fig 1.7 Fig 1.8

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American households had a phonograph. In addition, in 1921, the turnover of the
recording business amounts to a record level of $106 million. Jazz music recordings,
impersonated by artists like Paul Whiteman, became star products for the major
labels as they gained even more market shares in the fast-growing music industry in
the 20s. Yet, in the 20s the growing popularity of radio affects the expansion of the
music industry.
1.2.2. Radio popularity and the first crisis in the music industry
The widespread of radio upset the music industry insofar as unknown
and gifted artists were offered an opportunity to make themselves known on a
national scale or even worldwide. In the 20s, the first wireless devices (“TSF” in
French) are sold in Europe and in the USA and the first radio programs are
broadcasted in the UK by the British Broadcasting Company (BBC), in France by
Radiola (first private radio station) and in Argentina, in the USA and Canada44
.Yet
the radio was quickly perceived as a threat by the recording industry because it
provides free music… Radio actually grew very quickly in the United States: between
1922 and 1929, the number of radio sets moved from 50,000 to 10 million. The rise
in popularity of the radio created an awful drop in sales of phonographs: the
turnover of phonograph sales in 1933 amounted to $6 million and was worth only
5.66% of the phonograph sales of 1921!
This phenomenon resulted in a major restructuring of the industry
mainly through mergers and acquisitions. Many small companies went bankrupt
and the two major labels are taken over by radio companies: Victor was purchased
by Radio Corporation of America (RCA) and Columbia Records was integrated into
Columbia Broadcasting System (CBS) in 1938. In Europe, there was also a
concentration of players including the creation of Electric & Musical Industries Ltd.
(EMI), which resulted from the fusion of foreign subsidiaries and Victor of Columbia.
Besides financial and strategic solutions were found to counter the
crisis, the main agents of the industry vied with each other for innovation…New
44 Hull, Geoffrey P. The Recording Industry. Needham Heights, Massachusetts: Allyn & Bacon, 1998.

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recording technologies appeared in the music industry at the end of the 20s and
opened the way to brand new prospects. In 1925, the first electrical recordings (ie.
recordings through a microphone; the microphone was previously used only for the
phone) were developed and marketed; and in 1927, Bartlett Jones of Chicago45
was
granted a patent for the dummy head recording: an acoustic method used to
deliver a more realistic and accurate sound to headphone listeners. Correlatively,
the compulsory license (called “licence globale” in French) was launched in the US:
It has been a system compelling the radio stations to ask the major labels for the
authorization to broadcast their music. This system saved the music industry by
enabling labels to receive fees when their artists were on the radio. Thus the radio
progressively became less of a threat to recording companies; it could be used as a
promoting channel. At the same period, the juke-box was launched and a new way
of promotion was offered to the music industry.
Finally, the agents of the music industry turned the threat of the
radio into an opportunity thanks to innovation and financial restructuring…
Fig 1.9
45
No further information on this man was found on the internet
Fig 1.10
Fig 1.11

22
1.2.3. Appearance of rock”n’ roll and of the microgroove format
Just after the 2nd world war, Major labels are competing to shower
the market with a brand new disk format: the microgroove format i.e. vinyl records
with a groove… CBS tries to impose the long play record,
whereas RCA wants to promote the 45. These formats
also gained market shares in Europe in the 50s and
progressively became the standard formats because they
implied a drop in production and distribution costs
through economy of scale46
.
At the time, the consumer society was developing and teenagers
were given pocket money more and more often. As a new segment of customers,
they represented a new target for recording companies. A new logic, specific to the
music industry, appeared during the 50s: majors decided to focus their efforts on
music already popular and well established (like blues and Jazz) in order to increase
their profit margins. As a result, a booming type of music, Rock’N roll, was
neglected by major labels. Small labels took advantage of this neglect and saw that
rock ‘n’ Roll was becoming even more popular amongst youngsters. At the time,
small labels had a competitive advantage over majors because they were lighter
organizations, so much so that they could specialize in niche markets and react
faster to the evolutions in consumption trends. Several independent labels and
brand new labels rose in power thanks to rock’n’roll and we can see a decline of
the market shares of the majors (from 75% in 1955 to 34% in 1959) and a
decongestion of the market.
1.2.4. Reorganization of the Majors,2nd
crisis of the music
industry and launch of the CD
46
Martland, Peter.(1997),Since Records Began: EMI The first 100 years, Portland Oregon: Amadeus
Press
Fig 1.12

23
Fig 1.13
Fig 1.14
In the 60s, Warner Bros, previously focused on the Cinema and television
industries, steps into the music industry. For this occasion, they also bring a new
way of working in the industry. They acquire several independent labels so as to
bring creativity and reactivity in their process; they also develop a wide and well-
structured distribution network, so well that smaller and independent labels call on
them to subcontract distribution… Finally smaller labels can’t compete any more
with Majors because of the economies of scale made thanks to their distribution
networks. At the end of the 70s, only 6 Majors (CBS, Warner, RCA, EMI, Polygram
et MCA) and a few independent labels are left.
The launch of the audiotape brings new opportunities for customers and a
blue ocean for majors that decide to tackle this market before their competitors. In
addition, the disco trend also contributes to the rise in music sales.

24
Yet, the year 1979 is a turning point for the music industry… Many agents
added up lead to a drop in music industry’s turnover47
: The worldwide economic
crisis in the frame of the 1979 energy crisis (“2nd
choc pétrolier”), the competition of
new entertainments products like video games and video recorders, the
obsolescence of disco and, above all for the Majors, the home
taping (piracy with audiotapes). The decline of the music
industry goes on till 1983 and the launch of a brand new
format, the Compact disk or CD…. The benefit margin per
product is higher with the CD than with the microgroove disk
so well that the turnover of the music industry goes up again.
On top of that, MTV television channel and the Walkman also
contribute to bring new ways of music consumption and thus to
revitalize the music industry… This trend will continue all through the 80s and the
90s, with a peak of CD sale around 1990. It is favored by the evolution of
consumption trends (portable disk player, video clips), the explosion of music best
sellers like Michael Jackson, ACDC, Madonna and Celine Dion… and also the
globalization that enable more and more households worldwide to buy music
equipment and products.
It all stops in the early 2000s with the beginning of the current disk crisis.
1.3 How to explain the current crisis?
As we just saw in the previous part, the music industry has crossed difficult
periods many times… and has always been able to overcome it. Yet, as the current
disk crisis seems to be close to its end we see that it has been the longest difficult
time for the music industry since it started! How come that the majors have been
47
BOURREAU, M., LABARTHE-PIOL, B., Le peer to peer et la crise de l’industrie du
disque. Une perspective historique, dans Réseaux, 2004/3, n° 125, 2004, pp. 21-23
Fig 1.15

25
unable to react as fast as before? Why no lessons seem to have been learnt from
the previous crises?
Here are a few beginning of explanation that we will expand later on:
1.3.1 New technologies and piracy
As we can all guess, the main problem is the explosion of piracy, which is linked
with the development of new technological means and NICT (New Information and
Communication Technologies).Piracy as always existed in the music industry (in the
90s, ¼ of the CDs were pirated worldwide, notably 85% in China and 66% in
Russia48
), but this phenomenon became much more important and destructive for
the music industry with technological advances linked with the miniaturization and
the internet. On that point, 3 technologies are said to have been redoubtably
detrimental for the music industry:
 P2P softwares, main academic studies related to the drop in music sales conclude
that illegal music files sharing have been a main factor in the collapse of the
industry. This theory has been amongst others defended by Norbert Michael49
and
Aleajndro Zentner50
.
Since the founding of the first P2P software like Napster (1999), youngsters have
been convinced that digitalization equals free music. Most young people are not
raised awareness enough concerning topics related to copyright: redundancy plans,
because of insufficient sales, are set up by Major labels and their whole meso-
environments (providers, distributors, resellers, artists). In 2008, approximately 10
billion Euros and 186 000 positions were lost.51
48
CURIEN, Nicolas, MOREAU, François, L'industrie du disque, Paris, Editions La Découverte,
Collection Repères , n° 464, 2006, p. 59
49
Norbert Michael (The Impact of Digital File-Sharing on the Music Industry: An Empirical
Analysis, 2006), Rob &Waldfogel (Piracy on the High C’s, 2006
50
Alejandro Zentner , Measuring the Effect of File-Sharing on Music Purchases, 2003
51
ICHBIAH Daniel (2000), Enquête sur la génération MP3, la victoire de la musique, Editions Mille
et Une Nuits.

26
 USB sticks and external hard drive (EHD): Thanks to miniaturization technical
advances, people can now store huge amount of data and digital content in very
small devices. They can also exchange this content very quickly and easily with their
friends and relatives, without taking into account copyright infringement. Besides,
CDs and DVDs burning are still used to get round the purchase of music.
Fig 1.16
 High-speed internet: Internet appeared in the early 90s and was a revolution in our
everyday lives as it enabled to access and to exchange information, data and
content immediately with people living worldwide. In the early 2000s, this
phenomenon increased with the widespread of high-speed internet at reasonable
cost within the household. High-speed internet, added to the illegal download
opportunities enabled by P2P and the ease of sharing enabled by USB sticks and
EHD, has impersonated a real danger for the music industry since the early 2000s.
And here is the matter: The main agents of the music industry have been
unable to anticipate new ways of music consumption and they held on their usual
business models based on physical sales income. Consumers had a real need of
listening to music with new platforms such as tablet computers, Smartphones and
laptops, and Majors lacked of reactivity to set up a legal offer in order to meet this
need (this will be further studied in my quantitative study).
On that point, it is interesting to have a look at the arrival of the MP3 songs on
download platforms (e.g. Megaupload, MP3arena, etc.). The first one, MP3 .com,
was launched on 1998 and upset the way of promoting music by enabling any artist
to propose music, unlike Majors who put forward mostly bankable artists. At the
very beginning, Majors don’t believe in the sustainability of the MP3 format and
Fig 1.17

27
then they become quickly overwhelmed by the copyright infringements due to the
widespread of the MP3 format.
Another way of listening to music that has been long associated with piracy
is streaming. Yet, streaming enables only a single listening and not a permanent
storing…Streaming is a system for instant play of videos and online radio stations.
When we look at a video or when we listen to a streaming radio, this is
uploaded onto a cache that stores streaming data (called “buffer”), but is not stored
directly on our hard drive. However, video platforms like Youtube or Dailymotion
have long made available music with copyright infringements. In France, these
websites finally found a blanket
license (“licence globale”)
agreement with the SACEM
(société des Auteurs,
Compositeurs et Editeurs de
musique) in 201052
, so much that
amateur artists can post cover
versions of a song and people can
add a soundtrack to their videos
without risking to be sued.
To finish with, it should be remarked that cell phone music ringtones were
very popular in the mid-2000s and enabled to balance a little bit the drop of
physical sales for Majors. Now this trend is kind of obsolete.
1.3.2 Inability to learn lessons from the past
Considering what we have learnt about the history of the music industry
(1.2), Majors should be able to react to many kind of threats as they have had to
52
http://lexpansion.lexpress.fr/high-tech/l-accord-entre-youtube-et-la-sacem-une-
revolution_1345816.html
Fig 1.18

28
deal with several crisis. Yet, a core problem of the current crisis is that they have
been unable to learn lessons from the past…
If we have a look at the crisis of the 30s, innovation, financial restructuring
and the ability to turn the threat of the radio into an opportunity were the key to
the revival of the music industry.
There has been a move of restructuring/mergers recently (takeover of EMI
by Sony Music Entertainment and Universal Music Group in 2011) but it was a
backup plan in the frame of the disk crisis and it resulted in the layoff of hundreds
of employees of EMI.
Nowadays, with all the possibilities brought by informatics and the internet,
innovation now often comes from lead users and most big players of the music
industry are left behind. For instance, freewares and Opensource softwares
compete with paying product/services so well that softwares manufacturers
undergo a cut in profit margins. In addition, we also saw that the launched of the
CD (1982) occurred in the frame of the drop in sales of microgroove CDs (1978-
1982).
However, the most damaging point for the music industry was the inability,
or rather the extreme slowness, to try new business models to counter the disk
crisis. Indeed new business models were conceived during most previous crisis of
the music industry so as to turn weaknesses and threats into strengths and
opportunities. For instance, Radio was finally used as a promotion tool by the
majors even though it has long tackled CD sales. Second example: we saw
previously that majors took over in the 60s several independent labels so as to
benefit from their better flexibility and distribution network.
1.3.3 End of the life cycle of the CD

29
Another additional reason to explain the breadth of this crisis is quite simply
the end of the life cycle of the CD, and also the inability to revive the sales by
launching a new alternative.
Theoretically speaking, every product has an expected life cycle, including
different steps with an evolution in sales and profit realized (see FIG 1.19). In the
subchapter dealing with the history of the music industry, we saw that there have
been many changes in the supports of recorded music and each of these materials
has been a particular impact on the volume of music sales in the world. Now the CD
arrived at the very end of its life cycle and it is getting replaced by new supports like
MP3 and other digital formats. The point is that contrary to previous shifts in
support, new music formats are dematerialized and there is no real substitute in
physical sales (excepted musical DVDS, to a small extent) to recoup profit for
majors. Consumers now prefer to invest their money in new music playing
platforms instead of music itself. To illustrate that, let’s go back to the fig 1.19, we
can consider that CD is now on its decline step. Normally, a new product should
have taken over to revive physical sales (“renewal” curve underlined). Instead,
there was a shift in music customers’ spending: they prefer to acquire a new
computer, laptop, Smartphone and have illegally downloaded music for free. On
this subject, we will survey this phenomenon in the quantitative study by leading a
comparative study of the money spent in musical products every year and the
money spent in devices and accessories related to music listening.
Fig 1.19

30
1.3.4 Loss of quality and diversity of music
To finish with, many music listeners have the strong feeling that there has
been a loss in quality and diversity of music above the past years.
As a music passionate, I can personally assert that music little by little gets
homogenized so that a few artists and a few songs headed by Majors can satisfy the
most listeners possible. But this trend actually began at the beginning of the disk
crisis: a report made by IRMA (Centre d’information et de ressources pour les
musiques actuelles) in 2005 in France revealed that the number of single broadcasts
of the most played song on air had increased by 29.3% between 2003 and 2005.53
This homogenization is accrued by the monopoly of supermarkets and specialized
retail stores in the distribution network, which also favor safe bet, in collusion with
majors. Small record shops thus don’t have competitive prices anymore and go
bankrupt even more, in the frame of the global economic crisis (see fig 1.20)
Les Acteurs de la Distribution Physique
36,1%
38,7%
17,6%
3,9%
2,3%
1,4%
2002
GSS
HYPERS
GROSSISTES
E-COMMERCE
DISQUAIRES
GRDS MAGS
11
51,8%
19,5%
19,9%
7,9%
0,9%
2012
53
http://www.irma.asso.fr/IMG/pdf/manquediversiteradio.pdf
Fig 1.20

31
Les acteurs de la distribution physique :
The stakeholders of the physical
distribution
GSS= Specialized retail stores
Hypers : Hypermarkets
Grossistes : wholesalers
e-commerce : e-tailers
disquaires : record shop owner
Grds mags : department stores
1.4 Interest of this study
I chose to deal with this subject both on a personal purpose and to
contribute to the research on that topic worldwide…
 Interest of this study on a personal plan:
It all made sense for me to choose this subject because it mixed consistency
with my career objectives and studying music, which is a passion for me.
On the one hand, I specialized during my last year at the ESC Rennes in
Innovation Management and I saw a thrilling challenge in trying to find new
business models for an industry that suffers a harsh crisis.
On the other hand, I planned to work in market research after my
graduation (I’m currently carrying out my final internship at TNS Sofres) and this
work was an opportunity to develop and improve my abilities in quantitative and
qualitative study. I expected that to be beneficial to develop my professional skills.
However, the most motivating element, which most
definitely led me to choose this subject, is my love for music. I
put a lot into the association Descibel when I was a first-year
student at the ESC and that led me to aim at working in the
Fig. 1.21

32
music industry on a long-term perspective. In this framework, I got in touch alumni
of the ESC working in majors labels at the moment and it helped me establishing a
professional network in that field.
 General interest of this study:
Besides, I really want this survey to benefit an industry that I appreciate. In
the literature review (1.6), I will establish a picture of what have been done so far,
which methodologies have been tried/not tried. I will then analyze what still lacks,
and how I can contribute to the research on that field. As a business school student,
I can bring a corporate and business vision into that field, compared to previous
studies that were often led by researchers who had a more technical approach as
professionals of the music industry.
I want the agents of the music industry (both professionals and volunteers
working in associations) to get closer to their customers and fans. I want to identify
for them what kind of customers spends the most money in music and how they
spend it.
In addition, I intend to update previous surveys
that have been led on that topic (for instance, surveys on
music piracy have been led in the USA since 1979 and the
drop in sales of microgroove disks54
). I also intend to bring
more accuracy in the process and in my conclusions
compared to previous studies that led to contradictory
results. For instance, surveys led on the responsibility of P2P softwares mostly
concluded that these software were harming the music industry by involving a
replacement effect, while other studies found out that P2P softwares led to a
sampling effect55
(the consumer tries and listens new music through P2P softwares
and then buy the music that appeal him the most).
54
BOURREAU, M., LABARTHE-PIOL, B., Le peer to peer et la crise de l’industrie du disque. Une
perspective historique, dans Réseaux, 2004/3, n° 125, 2004, pp. 27-28
55
KRIM, T., Le Peer to Peer – Un autre modèle économique pour la musique, Etude Adami, 2004, pp.
103-104
Fig. 1.22

33
1.5 Hypotheses and investigative questions
From the main research question that we have stated, we are going to have
a further look into the main academic articles and studies that have been lead on
that topic. First of all, let’s raise a few investigative questions that will give us a path
for the Literature Review:
Q1: What was the impact of illegal download on innovation in the music industry?
Q2: Which agents of the music industry have undergone / benefited from the
digitalization?
From these two investigative questions, we can also formulate two
hypotheses that are so far only based on my previous knowledge of the topic. These
hypotheses are going to be corrected and refined while concluding the Literature
Review:
These hypotheses are respectively:
H1: The Major labels were compelled to find solutions that matched as much as
possible the advantages (for customers) of illegal download in order to revive
sales.
H2: The agents of the music industry that were working closely to the Internet
were those that could bounce back and benefit from the digitalization, whereas
those whose core benefits were physical sales suffered from digitalization.

34
2. Literature review
2.1 Literature review
Before choosing my final research subject, I wanted to study the impact of
digitalization on all the cultural products industries. My tutor confirmed me that it
was too broad and then I choose to focus on the music industry. Actually, I didn’t
know that some French consultants had made this global report and called it
“Impact économique de la copie illégale des biens numérisés en France”. In this
report, they studied the music industry but also cinema, TV and the book industry.
Regarding the music industry, they emphasized that it was quickly tackled by
copyright infringements because digital musical files are really light (1 to 5 MO on
average).They differentiate between the different ways of piracy: illegal copying of
CDs, illegal shares via P2P softwares or Instant Messaging softwares, file hosting
platforms like RapidShare or, MegaUpload. They studied the direct impact of
copyright infringement on the different agents of the music industry…
Between 1987 and 2007, artists and technicians have lived a drop in their
average annual workload (-33%) and in their average annual remuneration (-33%).
Music Labels are basically in charge of producing but also mostly undertaking
publishing, promotion and distribution… They earn the most important part of the
Fig 2.2Fig 2.1

35
unit price of an album: 50% on a physical product and
60% on a digital product. Actually, the sale of a
digitalized product can potentially be really beneficial
for them as they recoup the margin that a distributor
gets on a CD (see Appendix 3). But yet, they are the
agents of the music industry that have suffered the
most during the CD crisis: their turnover has fallen by
45.3% from 2002 to 2007. Then, concerning the
distribution of music, specialized retail stores (FNAC,
Virgin Megastore…) have long been widely dominant,
but in the 2000s, their space dedicated to music has
largely given up to books and computer, due to the decline
of the music market . In the meantime, e-tailers (Amazon,
Pixmania) and download websites (iTunes, SFR mobile…) have seen their turnover
blooming (Revenue from legal downloads rose by 86% between 2005 and 2007)56
.
The authors also assessed the loss of profits for every kind of counterfeit products,
based on various previous studies. Then 45% of purchasers of counterfeits CDs in
UK would have “for sure” bought these CDs if they couldn’t have it counterfeited
(replacement effect): that corresponds to a loss of turnover of 36 M€. Concerning
illegal downloads (+ lend of illegally downloaded music to friends and relatives), it
amounts to 333, 30 M€ within which 10% would have been bought in stores and
90% would have been legally downloaded. To conclude with, the authors assessed
that, when the survey was realized (2008), the change in business was ongoing but
it was a still a big loss in profit for the music industry: the lower activity in
traditional business models (e.g. audio or DVD discs sold in stores ...) was far
from being balanced by the low growth of new business models (music streaming,
legal downloads ...)
Yet, we often forget that in the music industry, like in any other sector, the
final consumer is the core agent. Then we have lived a radical change in the music
56
Tera Consultants (unidentified authors), 2008, Impact économique de la copie illégale des biens
numérisés en France
Fig 2.3
Fig 2.4

36
consumption for the advent of the digitalization era. A survey called “Music
consumption: Lifestyle choice or addiction” released in the Journal of Retailing &
Consumer Services aimed at assessing whether high music consumers of music can
be said to be addicted, and the consequences it can have on their lives… particularly
since we can almost listen to music whenever and wherever we want. Concretely,
this experience was lead through an international sample of IPod owners who were
deprived of their MP3 players during 7 days and to report the effect on the 5 main
components of addictiveness on them (salience to listening to music, euphoria of
listening to music, withdrawal symptoms, conflicts with relatives, relapse) .Then this
experience revealed that EVERY participant felt more or less withdrawal symptoms:
unpleasant feeling when doing an activity
without their iPod while they were used to do
this activity with it (“I miss my music to
workout”, ”Without music to study with I kept
getting distracted and frustrated.”). That
qualitative survey confirmed that people can
easily become accustomed to music with the
widespread of MP3 and iPod purchasing.
From that point, a quantitative survey was lead in a British University57
to
find clusters of MP3 user’s profile. Participants had really various profiles: age,
gender, student/employees, nationality, time spent on MP3… The questions asked
were based on the results of the qualitative survey and aimed at categorizing MP3
users into 3 groups: “heavy users” (can be roughly describe as iPod “addicts”, their
job and studies can suffer from it), “functionalists” (heavy use of iPod but see it as a
benefit and not a need) and finally “casual users”. This quantitative survey lead to
astonishing results… the users categorized as “heavy users” can potentially neglect
their daily obligations, be short of sleep, and not being able to pay bills because too
much money is spent on downloads… and this is a really important point: this
quantitative survey thus shows that, even if the hardware sales (MP3, iPod) benefit
much more from digitalization, the content (music purchased and downloaded) can
57
A. Cockrill, M. Sullivan, L. Norbury, March 2011, Music consumption: Lifestyle choice or
addiction, Journal of Retailing and Consumer Services, 18 (2), pp 160-166.
Fig 2.5

37
also be profitable through the mass use of the internet.
So then, we can broaden this observation and wonder what decides any
music customer to purchase or download illegally a song. This is what J-F Ouellet
decided to study in the Academic paper “The purchase versus illegal download of
music by consumers: the influence of consumer response towards the artist and
music”58
. He remarked that previous studies on that topic focused on explaining the
will of re-experiencing music listened but failed to differentiate between the act of
purchasing this music and downloading it illegally. This is what he intended to do
with a qualitative survey… stimuli referring to different types of music and artists
liked by the participant but among which some have been purchased, some illegally
downloaded and some appreciated but simply listened.
Concerning the re-experience of a particular song, both personal feelings of the
participant (emotional experience, responses to memories and images, cognitive
responses…) and his value judgment about that song (lyrics, creativity and lyrics of
the song, social character of listening to this song) were taken into account.
Regarding the influence of the artist, the following criteria were assessed:
confidence (fame and reputation of the artist), sex-appeal (“the physically appealing
characteristics of the artists), “amiability response” (connection established
between the artist and the consumers),
“contrary response to success” (excessive
success of the artist would increase propensity
to illegal downloads), “nationality” (identification
to the nationality of the artist by the customer),
“symbolic response” (aura of status attributed to
the artist by the customer). First finding of this
survey: among responses relating to the music, only
those concerning imagery and sociability were referred
58
7 J-F Ouellet, Jul 2007, The purchase versus illegal download of music by consumers: the influence
of consumer response towards the artist and music, Canadian Journal of Administrative Sciences, (24)
2, pp 107–119
Fig 2.6

38
to by the participants as favoring purchase over illegal download, whereas most
factors linked to the artist were decisive in the act of purchasing. Thus, this survey
emphasize on the crucial importance conveyed by the public image of an artist
today: more concerts, more autograph sessions, commitment in social causes are
likely to contribute to sales.
2.2 Conclusion of the literature review
To finish with, this literature review gave us an overview of some capital
elements: the structure of the music industry and there was a shift in its business
models in 2008 (with the increase in sales of internet related products)  Our H2
(The agents of the music industry that were working closely to the Internet were
those that could bounce back and benefit from the digitalization, whereas those
whose core benefits were physical sales suffered from digitalization.) seems to be
validated but it would be interesting to lead exactly the same study now that the
music industry seems to be at a turning point.
Correlatively, some customers are more likely to become heavy music users
with the development of portative music solutions. They are still willing to spend a
lot of money in music, not only for music equipment but also for music itself. Then,
the public image of an artist plays a crucial role in the sales of its albums and Major
labels should take this into account for promotional efforts.  We have no
confirmation of our H1 (The Major labels were compelled to find solutions that
matched as much as possible the advantages (for customers) of illegal download in
order to revive sales).
We should alongside focus on the customer’s behavior and try to have
confirmation of the conclusion of the last 2 surveys we have seen.

39
3. Methodology and approach
3.1 Initial approach
To introduce my literature review, I had an inductive approach: I didn’t
know much about the topic but I made hypothesis that I tried to refine for my
further researches. At the end of the Literature Review, we have refined our
opinion about H2 and new questions have arisen.
Now, we have identified that a gap appeared between consumers, how
perceive music nowadays (dematerialization equals free music, evolution of the
ways of consumption, etc.), and the way that majors and professionals of the music
sector were still working (old business models based on physical sales’ income).
Thus, the 1st approach that I decided after the conclusions that I drew
further to pre-GAP was to lead in parallel a qualitative study and a quantitative
study. I wanted to lead these studies independently of each other, but I planned to
compare the results afterwards and then identify lines for the professional of the
music sector to get closer to their consumers.
The quantitative study aimed at
checking if the hypothesis concerning music
consumption that I enounced previously could
be validated:
Concerning the H2 (“The agents of the music
industry that were working closely to the
Internet were those that could bounce back and benefit
from the digitalization, whereas those whose core
benefits were physical sales suffered from digitalization.”), we saw in the literature
review that a change in business model among the agents of the music industry
seemed to begin to occur in the late 2000s, with the consideration of the
Fig 3.1

40
importance of the Internet nowadays by the agents of the music industry. I wanted
to check out if this change was concretely verifiable amongst music listeners.
To check this out, I added up several questions linked to that topic in my study,
such as for example:
o “Where do you go on the Internet to listen to music?”, to see what kind of musical
offer on the internet lure the most people.
o “What are the platforms you mostly use to listen to music?”, to see the evolution of
the ways of music consumption amongst most music consumers.
As new questions have arisen after the literature review, especially
concerning customers behavior, I created a third investigative question:
 Q3: What kind of customer spends the more money on music?
This question, which I planned to develop in my quantitative study, was likely to
enable us to check whether the customers that spend the more money in music are
“heavy music listeners” or those who give more prominence to the public artists.
Here are 2 different Hypotheses that must be checked according to the results of
the last 2 articles we have seen in the Literature Review:
 H3: Heavy music listeners spend the more money on music.
 H4: Customers that give importance to the public image of an artist
spend the more money on music.
Concerning the H3, I asked both a question related to the duration of music
listening per day and other related to the money spent on music. I wanted to check
out if these two variables were correlated / depending on each other.
As regards the H4, I asked a question related to the importance of the fact
that the customer likes an artist in the purchasing, and I also wanted to make a
crossed sorting (“tri croisé” in French) with the variable related to the money spent
on music.
As no progress has been made on the H1 after the Literature review (“The
Major labels were compelled to find solutions that matched as much as possible
the advantages (for customers) of illegal download in order to revive sales”), I

41
wanted to look deeper into this matter with a
qualitative study led within professionals of the
music industry.
The qualitative study also aimed at
checking whereas there was still a gap between
consumers and agents of the music sector (both
professionals and volunteers), between how
professionals of music perceive customer’s habits and willingness to spend money
and the reality. It was also a survey on the evolution of the structure of the music
industry.
3.2 Action plan
Here is the diary (action plan and corresponding deadlines) that I decided to
follow and that I submitted to my supervisor.
The deadlines that I previously decided were quite unrealistic and this is why
I had to postpone the handing in of my Graduating project.
Fig 3.2

42
A few additional elements to be taken into account…
Fig 3.3

43
 Within 4 days:
o The questionnaire was actually a Google form available through this link:
https://docs.google.com/forms/d/1rI4vgWvI07t04MffJ3JASdjRGckT9-BS_yLlBC0b-
B0/viewform?usp=send_form.
It was thus a self-administered internet mediated questionnaire (Saunders,Lewis
and Thornill, 2009)59
. A Google form is a type of CAWI (Computer-Assisted Web
Interviewing). I could have chosen otherwise a telephone or paper interviewing but
a CAWI was the most appropriate way to reach young people (people most
concerned by innovation trends for most marketers).
On top of that, a phone interviewing (CATI) or a paper interviewing (CAPI) both
required more time to spend.
o The pilot test among a small cluster of friends aimed at checking if there was any
mistake, if the whole questionnaire was consistent. I also wanted to check if it was
interesting for the respondents to take part in my work: it was a good way to check
out the duration adequacy (long enough to collect sufficient data but short enough
in order not to bore the respondents).
Retrospectively, if I could have had the appropriate time and means, I think that it
would have been better to lead an explorative qualitative study (“etude qualitative
exploratoire” in French) among a selected group of music listeners in order to
develop the most appropriate questionnaire for the qualitative study.
o The communication was made mainly through Facebook and e-mails to my direct
contacts. I will explain it in a more detailed paragraph in the section “Development
of my investigations”.
 Within 13 days:
I planned to carry out the writing of the sections “Review of business context
and theoretical Background” and “methodology” in 9 days… It actually required 4
59
M. Saunders, A Thornhill,P. Lewis, Research Methods for Business Student, 5th
edition, 2009

44
months! I started from the principle that I had already began it in my GAP proposal
(introduction to the subject and literature review), but I had not anticipated that
the theoretical background would require broad further research (news articles,
research articles), a long time spent on definition of music and business concepts. I
had not foreseen that it would be so important to explain in detail the history of the
music industry so as to enable to understand the current disk crisis. In addition, the
explanation of the reasons of the current crisis turned out to be crucial but lengthy
to carry out.
To finish with, the part methodology was really important for the reader of
my GAP to be able to assimilate the way I intended to carry out this work and how I
actually did it.
 Within 35 days:
I thought that I could gather the data required for my GAP in an interval of
31 days; both concerning the interviews (qualitative study) and the questionnaire
answers (quantitative study)… it was unfortunately way too optimistic. I wanted to
interview as many persons as possible, so as to have a reasonable error margin.
But I only got 5 days before the deadline enough respondents (150) to have
a reliable study! At the end of the investigation period (“dates de terrain”), I finally
reached 164 respondents.
3.3 Constraints and limitations expected
At the very beginning of this work, I was really ambitious and I wanted to
carry out a perfect piece of work, in line with my carrier objectives of working in the
music industry in the future. Thus I decided to carry out simultaneously a qualitative
survey and a quantitative survey, I was the only one who done that and I couldn’t
imagine the amount of work that it represented.
Yet, I had a huge amount of work to carry out in a limited period and I had
no idea of the time that carrying out this work perfectly could take, compared to

45
the time I had available to work on it. I had indeed to lead in parallel an internship
and to carry out my graduating project: I began my final internship for the ESC
Rennes just one month before the deadline for the GAP.
This is why I gradually decided to carry out a strong template for further
research on the topic, combining a qualitative and a quantitative approach, instead
of my initial ambitions.
I was just a final year master student and, by humbleness, I thought that my
work could not be of any use for the global research on that topic, no matter how
serious and thorough it could be, because researchers and professionals had
already done their best to widen the knowledge on that topic.
As regards the quantitative study, I had not led numerous quantitative
studies before… This is why I decided to use a Google form to set up the
questionnaire and analyze the results. On the one hand, a Google form is a basic
and intuitive tool, so that I knew that it would restrict the possibilities of analysis.
But on the other hand, I didn’t feel at ease with the use of more complex statistic
tools, like SPSS, and I had no one to teach me how to cope with it.
As a PGE student that followed the “innovation Management” major
program, I hadn’t been taught deep knowledge
about Qualitative surveys, like a friend of
mine who carried out the “Msc
International Marketing” for instance….
It became obvious when I arrived at the
“results” step of my GAP, and I lacked
statistical tools to treat unsatisfactory
results.
I already knew that it would be hard to reach some socio-demographical
categories: The youngest and the eldest respondents, since I carried out my study
on the internet; respondents from non-European countries, as I travelled and met
people mostly from Europe since I was born.
Fig 3.4

46
The questions asked and the corresponding answers had to be very
meticulously and wisely chosen, so well that they could validate/invalidate the
hypotheses that I put forward after that I studied the theoretical background.
In a more practical way, I had also to cope with other problems like the
random effect (“effet d’ordre”) eg. the order in which the different possible
answers to a question were proposed in the Google Form. As I already said, other
more sophisticated statistic tools could have had avoided me to get a random
effect.
Concerning the qualitative study, an element that I thought could be a
problem is that it was the very first time that I lead a qualitative study, and had to
interview people with an interview guide.
Yet the main problem, which I could not anticipate at that moment, was the
difficulties to get in touch with the members of my alumni network. I expected that
the former students of the ESC Rennes that were now working in
the music industry would be willing and even enthusiastic to take
part in my qualitative study through semi-structured interviews.
But I think that they don’t update often their contact information
in the alumni network website, so well that it is difficult to reach
them.
I will develop further this problem right now in the next part called
“Development of my investigations”.
3.4 Development of my investigations
3.4.1 Qualitative survey
The very first actions that I carried out were deciding on an accurate target
of people, who would be representative of the main agents of the music industry
and would be quite easily contactable and willing to go for an interview.
Fig 3.5

47
I aimed at getting in touch only with reliable people, from whom I was sure
to obtain added value in the frame of my work. To ensure that, I based my opinion
on their professional experience and their educational background, available on the
internet. I wanted to reach people from abroad and different culture, notably with
different approaches to illegal download, but nobody answered to my e-mails.
Correlatively, I anticipated the interviews and already conceived the
interview guide (see Appendix 4).
Conception of the interview guide
As an introduction of the interview guide, I provided ONLY the basic level of
information (introduction to this study) to the interviewees: I didn’t want to provide
them with too much information so as not to have a bias.
When I created my pre-GAP (“preparing for the graduating project”), the
very first step of my work, here were the guidelines of my Interview (I knew I had to
go into further details when preparing the real interviews):
 Evolution of the activity over the past decade (amount of work, turnover, number of
employees…)
 Major evolution of the business models of the firm over the past decade (i.e.: use of
the Internet, Evolution of the type and numbers with whom the firm has worked…)
 Solutions found to revive turnover/sales when it went wrong
 Evolution of the importance of promotional/advertising efforts
These questions were likely to reveal if the music industry has taken into account
the increasing importance that the public image conveyed by artists.

48
I wanted my interview guide to enable interviews that would be as
exhaustive as possible and to collect the most data possible, before choosing and
eliminating unnecessary data afterwards. This is why I established a clear list of
every element and data that I wanted to obtain form these interviews.
The pillars of my interview guide were:
 The Hypotheses that I put forward and that I intended to check with the qualitative
study: H1 “The Major labels were compelled to find solutions that matched as much
as possible the advantages (for customers) of illegal download in order to revive
sales”.
 My desire to check whereas there was still a gap between the agents of the music
industry and the customers.
Thus I conceived the interview guide around two main parts:
1) The first part dealt with questions about the company, its exact relation to the
music industry, the evolution over the past years and, eventually, how the
company crossed the crisis and how it countered it.
On that point, I quickly discovered that my interview guide was more designed
for employees working in the music industry, than for freelances, artists or
people passionate by music that were invested in music as hobbyists.
2) The 2nd part aimed at acquiring knowledge about the music industry through
the interviewees and asking them their opinions about controversial or specific
topics (for instance, ethnic marketing in the music industry, new ways of
discovering artists, role of the associations versus companies in the music
industry nowadays, etc.)
After the first interview, I observed that the first part of my interview guide
was unfortunately designed for interviewees working in a music-related firm, and
not volunteers or freelances… Questions like “How many employees are there in

49
your department” or “Has your company crossed a critical period over the past
years” indeed couldn’t be applied in these cases.
Then, for the non-professionals or freelances, I removed the first part and
asked the interviewees to speak about their personal path related to music instead.
The prospection
After that I had conceived the interview guide, the next step in the frame of
my qualitative survey was to prospect people to get interviewees. It was based on
two main elements: communication and initial contact…
I communicated toward my direct contacts to get in touch with people able
to take part on my study .I broadcasted messages on Facebook and I also used
word-of-mouth.
It was the most successful solution because I could get in touch with the
following people:
 Fabien Daneshvar, a former friend of mine that I hadn’t seen from the high-school
and who had now created his own collaborative label.
 Raphaelito Gomez, a friend of a friend that had played piano at a high level in a
music academy and who had taken part to live
performances.
 Martin Leroch, the son of a work colleague I my
internship who was studying music and was also
sound technician.
Alongside, I made a search on Viadeo and
LinkedIn with key words such as “music manager”,
“sound engineer”, and I also made searches by
company names… Yet I could not send a message to the people that I found with
my free LinkedIn and Viadeo accounts, so well that I had to search on the internet
to have their e-mail address or phone numbers.
Fig 3.6

50
None of this information was successful: No one responded to the e-mails
that I sent and I only got numbers of the switchboards of their companies.
I finally found within my Alumni network the first and only “music
professional” that I could interview in the frame of my study: Nicolas Renault,
Manager at Sony Music Entertainment. Before getting in touch with Mr. Renault, I
was quite disappointed by my alumni network because I tried to reach many of
them directly through e-mails but only a few answered to me, and almost every of
these ones answered negatively to my request.
To get in touch with these people, the initial contact was fundamental: I
explained well the purpose of my study, why I contacted them personally and not
any other instead. I also wanted to make sure that their opinion and knowledge
could be representative of most agents having the same occupation in the music
industry.
Then, when I finally had my contacts, I prepared the interviews and carried
them out:
Realization of the interviews
They were semi-structured interviews, either through face-to face or
telephone interviews. Semi structured interviews enable to collect deeply
explanatory data (M. Saunders, A Thornhill,P. Lewis, Research Methods for Business
Student). Therefore my aim was to have a strong insight in the way that agents of
the music industry, both professionals and hobbyists, perceive their industry
nowadays.
The interview with Martin Leroch, was my very first interview. I was really
enthusiastic to speak with someone both fond of music and skilled in technical
issues about music. I expected that he could give me a good point of view on

51
digitalization as he had taken part in the implementation of electrical systems for
music shows for several years. The interview lasted 50 minutes, at his place in a
relaxed atmosphere.
For this 1st
interview, I decided on a tape-recording, so as to focus on the
interview, be more efficient. Yet I had not considered the risks of technical
problems and that I would have to spend time on typing this up on my computer
afterwards. Finally, the matter of technical problem turned out to be tragic… My
phone had to be rebooted one week after the interview and I hadn’t typed up the
interview yet! It was the most important problem I had to deal with during the
elaboration of my master thesis.
My second interview was carried out with Fabien Daneshvar. It was at a bar
and the interview itself lasted 40 minutes, after that we had caught up on each
other’s news. Fabien was shortly graduated in History, he was dedicating most of
his time to the associative label that he created, in order to connect the different
artists from Brittany and especially from Rennes, and to make them known at the
regional scale.
This time I preferred to take notes instead of tape-recording them. I wrote
down the key words, the main ideas, and I expanded it just after the interview,
while they were still fresh (“à chaud”). It turned out to be way safer and time-
saving, even if the interview was maybe a bit less interactive.
I used the same method to carry out the third interview, with Raphaelito
Gomez, also a face-to-face interview. I had gotten in touch with him through
Facebook, thanks to a friend who connected us. I met him at his place and the
interview lasted 35 minutes. I was quite disappointed because this interview was
not as productive as I had expected. Raphael seemed to be passionate about music
and very skilled at piano but not very talkative and spoke mostly about himself,
specifically, so well that this was not representative: I could not extrapolate what he
said to other pianists and other artists.

52
The last interview occurred with an
alumni from the ESC Rennes, Nicolas Renault
who worked for Sony Music Entertainment
and who also gave me documents for my
master thesis, and I want to thank him again
for that. It was a phone call: he called me from his
office. Thus once again I took notes and retyped it just
after.
The interview lasted just 30 minutes because Nicolas was really in a hurry.
Yet it was very instructive and it gave me an overview of how the Majors companies
managed the crisis. Another problem is that the connection was quite low because I
was not home when he phoned me on my cell phone.
At the end, I just had carried out 4 interviews and the data that I could
gather was way not sufficient in the frame of a qualitative study. This is why I
shifted my objectives and I decided to use the interviews as a back up to analyze the
results of the quantitative survey.
3.4.2 Quantitative survey
It all started with the conception of the questionnaire.
Creation of the questionnaire
I first created my questionnaire (see appendix 5) based upon the
hypotheses I developed at the end of my literature review:
 H2: The agents of the music industry that were working closely to the Internet were
those that could bounce back and benefit from the digitalization, whereas those
whose core benefits were physical sales suffered from digitalization.
 H3: Heavy music listeners spend the more money on music.
Fig 3.7

53
 H4: Customers that give importance to the public image of an artist spend the more
money on music.
I created it on Google Doc (instead of platforms like Survey Monkey or Fluid
survey), because I had already carried out
surveys with this platform so I knew how it
worked. My sampling plan (“plan
d’échantillonage”) was based on
volunteering: I wanted to check consumers’
habits concerning music, whoever they were.
Anyway, as far as I know, no quota method
can be implemented on a Google form.
At the very beginning of the questionnaire, there was an introduction that
aimed at explaining the organizational context of this survey.
I wanted to implement a randomization of possible answers, so as to avoid
the random effect, but this was not possible with a tool like a Google form. This is
why my only solution was to check by myself that the 1st
possible answers hadn’t
been answered too often.
Concerning the socio-demographical data, I planned to ask the age, gender
and geographic origin. I let down the SCP (“CSP”) because I thought that this had no
real meaning when leading this survey worldwide: I thought, for instance, that a
professor in Nigeria would have less money to spend in music than a blue-collar in
France. Yet I should have kept this data to carry out crossed sorting (tri croisé)
within each country.
On that point, I made a big mistake concerning the geographic area… I first
planned to let the respondent chose his country within a list of all the countries
worldwide. Yet a friend of mine who did that told me that too many respondent
answered “Afghanistan” , the first country in the alphabetical order, so that it
represented a random effect.
Fig 3.8

54
Then I decided to let the respondent chose their continents instead of their
countries. It was a bigger mistake because, when the questionnaire was closed and I
looked the results, I saw immediately that Europe was overrepresented. What I
should have done is to let the respondents fill in a blank space concerning their
country of origin, and then recode it by myself at the end.
Validation and distribution of the questionnaire
My purpose was to carry out a rigorous and reliable survey… this is why I
decided to distribute my survey among a test sample of 10 friends. I asked them to
answer as if they were normal respondents and to tell me their global opinion
about it, whether they thought that the questions were consistent regarding my
hypotheses or not, and to report any trouble, incoherence or lack of information.
After that they all responded, they said to me that it seemed good and there
was not any problem with it. As there was no problem and no change to make on
the questionnaire, I could integrate their answers to my study.
Then I opened the questionnaire to everybody and I started to communicate
about it.
I had three main promotion channels to communicate about the questionnaire:
 E-mailing:
E-mailing was the simplest way to distribute my
questionnaire… I just had to send an e-mail to all my e-
mail contacts with a short message of introduction and
the hyperlink to access it.
 Word-of-mouth
I used also word-of-mouth to back my promotion effort. As I
decided on a CAWI questionnaire, I could not obviously administer any
questionnaire orally. But it was a good way to explain further the role of this
Fig 3.9

55
questionnaire and to speak about my GAP to the potential respondents, before
sending them the questionnaire on the internet.
 Social networks
I used Facebook as a massive communication channel on the internet. I first for sure
invited all my Facebook friends to answer the questionnaire, but I also targeted
different groups to post messages.
I quickly saw that it was difficult for me to reach the respondents aged 13-17
years and those above 65, so I targeted different groups on Facebook and on the
internet (like the official Facebook fan pages of people popular among the
teenagers, even if they have nothing to do with music).
The respondents answered to the questionnaire by waves, corresponding to
the relaunches that I made on the social networks. The chart below indicates the
number of daily responses. Every peak corresponds to the relaunches that I made
on Facebook.
Fig 3.10

56
I had a feedback on my questionnaire by 2 teenagers, and according to them, it was
too difficult for such a target. This is a real shame that I had so few respondents
within this age category because teenagers are really sensible to new technologies
and especially for innovations linked with entertainment.

57
4. Results & analysis
4.1 Qualitative survey
It was very difficult for me to gather sufficient information to lead a serious
qualitative study. This is why I decided, at the very end of the elaboration my
master thesis, to shift strategy and to use the qualitative survey as a support for my
quantitative survey: I will display the results of the quantitative study and use the
results of the quantitative study as a support for the analysis.
As a recall, you can see the interview guide (appendix 5).
The only hypothesis that was supposed to be validated by the qualitative
survey was the H2: “The agents of the music industry that were working closely to
the Internet were those that could bounce back and benefit from the
digitalization, whereas those whose core benefits were physical sales suffered
from digitalization.” My quantitative survey dealt with this subject in a few
questions, and will cross notably the results of these questions to the answers that I
had during the interviews of my qualitative study.
4.2 Quantitative survey
4.2.1 Validity of the results
After accepting responses to the Google Form, a summary of the answers
was available (see appendix 6). Yet, this summary of the answers could not be
rigorously validated for me as the Google Form includes no process for validation:
 I could not eliminate the contradictory answers.
For instance, there was 4 people out of the 165 respondents who said that they

58
have never acquired illegally a cultural product (including music), but said that they
had already acquired music illegally.
 I could not carry-out validation tests.
 I could not eliminate respondents that systematically answered the first answer.
This is why I wanted to export the data on Excel, check the relevance of the
answers by myself and then draw my own charts and plots.
The first thing that I carried out is the elimination of the respondents that
answered inconsistently. Therefore I checked 3 elements:
 Which respondents systematically answered the first answer?
I checked this by filtering the first questions, one after each other, on the Excel file.
And I saw that nobody had still answered the first possible choice from the 3rd
question. So this point was validated.
 Which respondents answered contradictory to the questionnaire:
o Those who answered No at Q4 and Yes at Q5 (Q4: Have you ever downloaded a
cultural product illegally? ; Q5: Have you ever downloaded music illegally?).
NB: see the whole questionnaire in appendix 5.
This is why I erased 4 respondents out of the 165 (only 161 left after that
operation).
o Those who answered No at Q4 or Q5 and something else than 0 (never) at Q7
(“How often do you acquire music through P2P softwares?”) …
When the survey was lead, there was indeed no mean of acquiring legally music
through P2P softwares.
Yet every respondent that had answered No at Q5 had also answered 0 at Q7.
So I hadn’t to erase any answer and this point was validated.
According to K. Malhotra and F. Birks60
, here are the reasons why a
respondent can be discarded (I give the status of my work on each point) :
60
David F. Birks , Naresh K. Malhotra, « Marketing reserach, An Applied Approach », Prentice
Hall/Financial Times, 2007 - 835 pages

59
1) Incomplete questionnaire.
On this point there was no risk as I checked that every required question was
correctly displayed on the Google form.
2) The respondent did not fully understand or follow the instructions.
On this point I had several problems to face…
First, I decided to check for every question and erase every respondent that
had exceeded the maximum number of authorized possible answers.
I was astonished and really disappointed to see that 27 respondents had
answered 3 or more answers to the first multiple choice question (It was clarified “2
answers maximum”). And 24 respondents had answered also too many possible
answers at the following Multiple answers question, within whom only 4 people
were the same as those who answered too many possible choices previously!
I would have had to erase 47 more responses if I wanted to follow exactly
the rules that I decided. Yet it was way too many data erased and I decided to keep
these responses, even if it lead to a bias because people who followed the rules
might have added other responses if they could.
I think that so many people had answered with a bias because the mention
“2 answers maximum” was not visible enough, put I could not do anything else with
a Google doc.

60
The second element on this point is that the question “How often do you
acquire music through Direct Download?” was not understood as I had expected by
the respondents. I meant “How often do you acquire music ILLEGALLY through
Direct Download?” but many respondents had understood that I was speaking
about direct downloads in general. So well that several respondents who had
answered “no” to the question “Have you ever downloaded music illegally?”
answered something else than “never” to the Direct download question. Yet, their
other answers were consistent, and it was obvious that this was my fault: my
question was not clear enough. Then I decided to code manually their answers as if
they had answered “never”.
3) The questionnaire is received after the investigation period.
About that matter, there was no problem as the questionnaire displays
automatically the following message when the questionnaire has been turned-off…
Fig 4.1

61
4) The respondent is not qualified for participation.
No problem here too because this questionnaire was opened to everyone.
But the related problem is that I could not manage to have a representative sample
of respondents.
Otherwise, to finish with the different data validation parameters:
I checked if there was any duplicated line in my excel File and it was OK. Yet,
the problem is that someone could have had answered twice or even more. There is
no way to check this with a Google form.
There was a few missing data because I settled the Google form so as it
compelled the respondents to answer the required question but they were free not
to answer the other. Then I had to check if they hadn’t answered the questions
because they were too lazy to respond seriously to the questionnaire or just
because they were not concerned by the question.
It turned out that they were just not concerned by the questions so this
point was validated.
To finish with the checking, I had a serious doubt about 9 respondents who
seemed not to have really answered seriously (for instance: questionnaire globally
inconsistently filled in, seemed to have answered at random (e.g. cyclic answering,
Fig 4.2

62
like first choice, then second, then third, etc.), or very strange comments at the very
last question “Any comment or suggestion about the survey or the evolution of
music consumption?”). Thus I erased these 9 answers.
At the very end of my checking, there were 156 responses left. It has no real
incident because the respondents hadn’t been recruited on a quota method. This
just lowered a little the representativeness of my survey, but with much more
reliable respondents.
4.2.2 Results of the quantitative survey
4.2.2.1 Principal results and general trends
To begin with, it is important to know that the results, trends and charts
provided in this sub-section (4.2.2.1) are based on the summary of responses
provided by Google (see the whole summary of responses in appendix 6)
It is interesting to see that the profile of the respondents give us key indications
concerning the kind of people that can be reached through a CAWI massively
promoted via social networks:
 The respondents were overwhelmingly aged between 18 and 25 years old (67%),
whereas I had hardly any respondents aged between 13 and 17 (2%) and over 60
years old (1%).
 The number of respondents was balanced concerning the gender (51% women vs.
49% men)
Fig 4.3

63
 The data concerning the geographic origins could not be crossed with other
questions as 93% of the respondents were Europeans
When I arrived at the analysis step, I had no time left to cross the socio-
demographical data with the other results, and there was no assumption on these
data in my hypotheses.
Yet I think that it would be interesting to cross these data with the other
questions in further studies on that topic, so as to refine the exact profile of the
respondents.
Otherwise, it seems that most respondents were a very least interested in music
(only a third of them listen to less than one hour of music per day).
Fig 4.4
Fig 4.5

64
Only 5% of them don’t listen to music on the internet, confirming that our group
of respondents was already interested in the new technologies and on especially in
online music.
On that point, 85% of them had already acquired music illegally. I wanted to
know which way of illegal music acquisition was the most popular , but
unfortunately, none of them was outstanding:
Fig 4.6

65
These 3 questions were too precise and I should have had a general question
about the frequency of illegal music acquisition, so as to use it and to gather the
results in a variable for advanced analyses.
To solve this issue, I created a fourth variable on Excel, stemming from these 3
questions, which gathered the maximum frequency of download for those 3 items
(for instance the 4th
variable called “X” would be worth 4 for someone who
answered “1” at Direct downloads, “3” at P2P softwares and “4” at data retrieval).
Then I analyzed the correlation of this 4th
variable with the variable describing the
amount of money spent in musical products per year for each respondent, so as to
confirm/infirm the hypothesis according to which the people who download the
more are also those who spend the more money on music.
I will go further on this point in the next section (advanced analysis).
I asked the respondents, which was the music shape that they spend the money
in, with a single-answer question proposing 5 answers:
 Digital files
 CDs
 cell phone ringtones
 Music on demand
 Other (small blank to fill in)
The first results were not satisfactory, as 12% of the respondents had answered
something else. I decided then to recode the results of the category “others”,
Fig 4.7

66
because I saw that I had forgotten to propose the vinyl and the proposal “I don’t
buy music”. Then I got the following plot:
A surprising result: The CDs are still largely the musical products that are bought
the most, and if we add up the results of Vinyl, the physical sales amount to 67% of
the respondents.
Concerning the places of purchase, I decided once again to recode the results
because the category others represented 7%.
Coding: I was focused on the place/platform of purchase ( I mean paying
acquisition), so well that I coded the responses “other” as follow:
 No answer, “all of them”, illegal downloads; I don’t buy music, etc.  These
answers were erased because they didn’t give me any information on the
place/platform of purchase.
 Spotify, Deezer, Orange, etc…  Legal download websites
Fig 4.8
Fig 4.9

67
The problem is that there was no distinction between music on
demand/monthly subscription music and legal download platforms when the
question was created and even after the recoding. But it enabled me to see the
proportion of digital and internet related sales versus the traditional distribution
channels.
If we add-up the digital sales and the e-tailers, the subtotal of the internet
related sales amount to 27,4%, whereas the traditional distribution channels,
dedicated to the physical sales, represent 72.6%.
In the next part of the questionnaire, I focused on the purchasing of the devices
and accessories. I wanted notably to see if there was a shift in the money spent:
from the content (music) to the platform of listening (MP3, smartphones, etc.).
Yet, a respondent made a very interesting remark on that point: the question of
the money spent in music-related devices was biased, because most devices that
play music nowadays have also other functions and music can be a secondary
function or even less important. For instance, a respondent who like gaming or
watching videos can change his laptop every 2 or 3 years and spend a lot of money
in it. Yet a laptop can play music but it is not its primary function for most people.
Fig 4.10
14%
14%
20%
43%
10%
e-tailers / Vendeurs par Internet (ex:
Amazon.com, eBay, PriceMinister)
Legaldownload websites / Sites de
téléchargement légaux (ex:
iTunes, VirginMega)
Recordshops / Disquaires
specialisedhypermarket ( ex: Virgin
Megastore, FNAC, etc..)

Master Thesis Moran HANANE-To what extent has digitalisation changed the music industry

Master Thesis Moran HANANE-To what extent has digitalisation changed the music industry

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