Streaming Killed the Download Star! How the Business Model of Streaming Services Revolutionizes Music Distribution

Abstract

This article focuses on modern music distribution and investigates the business models of music download shops compared to streaming services. For that, a literature review as well as interviews with various industry experts representing different stakeholders of music distribution were conducted. It is shown that the business model of music streaming services differs fundamentally regarding the revenue streams compared to music download shops. Further differences can be identified in terms of new customer segments, which are attracted by new channel characteristics, new payment models, as well as due to closer customer relationships. In total, this study particularly contributes to the understanding of the future potential of streaming services and highlights the need for download shops to review the long-term stability of their business model.

Keywords: Music Industry, Music Distribution, Music Streaming Services, Business Model Innovation

JEL Classification: M10