The Future of Digital Music Services in Three Stereotypes

The digital music industry is struggling to provide all involved parties with a proper income. This paper investigates new initiatives to create and capture value from digital music. Literature sources were used to define the concept of digital music and to investigate how value creation and value capture are interweaved in business models. Focus group interviews with 90 people between the ages of 15 and 25 were successfully employed to provide 20 new business models. These models were subjected to grounded theory analysis. This analysis revealed three stereotypes for future music services to create and capture value from digital music. The first are socially focused business models that emphasise social interaction to stimulate discovery and sharing of music. Secondly, artist focused business models that create a closer artist – fan relationship. And finally extra value focused business models that bundle the sale of digital music with other products or services. The success of any of these stereotypes is concluded to be strongly dependent on the proper alignment of the value chain design.