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Aalto University School of Business Master's Theses are now in the Aaltodoc publication archive (Aalto University institutional repository)
School of Business | Department of Management Studies | International Design Business Management (IDBM) | 2014
Thesis number: 13720
Changing perception of value as a driver for industry transformation - case music industry
Author: Vainio, Velde
Title: Changing perception of value as a driver for industry transformation - case music industry
Year: 2014  Language: eng
Department: Department of Management Studies
Academic subject: International Design Business Management (IDBM)
Index terms: kansainväliset yhtiöt; international companies; musiikkiteollisuus; music industry; toimialat; business branches; muutos; change; kulttuurijohtaminen; arts management; liiketalous; business economics; mallit; models; verkostot; networks; ansaintalogiikka; wage trends
Pages: 60
Key terms: perceived value; business model; industry change; music industry; innovation; RCOV
Abstract:
The objective of this study is to better understand the dynamics of how and why industries transform and the role that value perception, innovation and business models play in that transformation. More specifically, we aim to get a better understanding of where the music industry is currently standing and where it is headed in order to make more informed decisions about new business ventures in this industry.

In the current debate over the future of music industry and whether the industry will in fact survive, there would seem to be an underlying confusion regarding what is considered as the music industry and the business of music in general. In other words, is the question about whether the music industry modeled according to the "old world" - with its power centralized around record labels and monetization based on imposed copyrights - will survive, or, whether there is business to be made in the future with music in general?

This thesis attempts to clarify this confusion by contrasting the past, the present and the future of music industry through the lenses of value perception and business models. A case company is studied and industry expert anecdotes are collected to form the qualitative empirical portion. By adapting the RCOV business model framework, we create collective meta-business models of the old and the new music industries to analyze and interpret the change that has taken place in the industry.

The results of this thesis show that the business models of music industry have changed from the linear value creation of the copyright-centered business towards artist-centered networked business models, where both consumers and artists have more power to decide what they want and how they want to be involved in the business. Also, because of the networked business models, the artist and consumer sides are beginning to form 'relationships' where they influence and co-operate with each other, generating and consuming value together. Artists need to understand the rules of social media and the related business models in order to make money in the new music business environment. The preference in music consumption has moved from owning music to having access to music. The current state and the future of the music industry would seem to revolve around the themes of medium-less production and consumption, increased access, new interactive value creation, and the new networked business models.
Master's theses are stored at Learning Centre in Otaniemi.