The object of this bachelor thesis is to analyze if windowing could work as an eligible distribution model for the music industry. Methodically, it includes a literature overview based on the use of windowing within the movie industry, where this distribution model has been applied for several decades and still finds application today. The report procures a conceptual framework for sequential distribution and its success factors, supplemented by the examination of necessary knowledge regarding the music business and respective aspects such as the current distribution practices. It provides an approach for a possible configuration of windowing as a distribution model for the music industry. The analysis of eligibility itself is conducted with help of an evaluation of the chances and risks that would go along with an implementation of the distribution model.
Findings lead to the general possibility of windowing in the music industry, but point out that applying this distribution model is accompanied by a high number of risks that have to be carefully traded against the potential gains reached by these actions. This thesis recommends to pay attention to different factors such as genre and target market and to examine which specific player within the supply chain should benefit from the changes in the distribution model.
Like in most industries, managers in the music industry have to ensure the profitability of their business model and are forced to adjust their decisions and actions while steadily paying attention to the changes and development on the market. As the behavior of music consumption has changed rapidly since the beginning of the 21st century, profitability is highly endangered by new distribution channels with their special requirements and lower revenues.
Table of Contents
1 Introduction
2 Conceptual Framework
2.1 Sequential Distribution in the Movie Industry
2.2 Success Factors
2.3 Distribution Models in the Music Industry
2.3.1 Classification of Current Distribution Practices
2.3.2 Ownership, Access and Context Model
2.4 Approach for Windowing as a Distribution Model for the Music Industry
3 Application of Windowing in the Music Industry
3.1 Analysis of Capability for the Music Industry
3.1.1 Chances of Windowing
3.1.2 Risks of Windowing
3.2 Current Practical Appearance of Windowing in the Music Industry
4 Conclusion
Objective and Research Focus
The primary objective of this thesis is to critically analyze whether the sequential distribution model, known as "windowing" from the film industry, can be effectively applied to the modern music industry to address profitability challenges and the so-called "value gap."
- Analysis of sequential distribution frameworks within the movie industry.
- Evaluation of current distribution practices and market shifts in the music sector.
- Examination of success factors for implementing windowing, including consumer expectations.
- Assessment of chances and risks, specifically focusing on cannibalization and music piracy.
- Comparison of current streaming exclusivity models (Service Windows, Tier Windows).
Excerpt from the Book
3.1.1 Chances of Windowing
The cannibalization effect that was presented in chapter 2 is a crucial aspect leading to contemplating successive release of new music to the audience. Prasad, Bronnenberg and Mahajan (2004, qtd. in Hennig-Thurau et al. 2007, p. 65) point out that “cannibalization effects can be either complete or partial, depending on consumers’ perceptions of substitutability between movie channels”. As digital music exhibits a very high degree of substitutability, windowing could be a working concept to lower the cannibalization effect.
Another argument supporting the idea of windowing is demonstrated by Luan and Sudhir (2006, p. 2), who assume that customers with the desire for an early use of a new product are usually more willing to pay a higher price at this early stage. They exemplified this phenomenon by the current practice on books, which start with a high quality, hard cover version that is followed by a paperback version with lower quality. An adaption for the music industry could involve an initial physical record, fully equipped with a booklet, bonus tracks, and merchandising, as it is common in form of box-sets within the rap music genre (Amazon 2016). A subsequent release through streaming services would not contain these extras. Hence, the initial release in the first channel could be viewed as “an ‘insider experience’ for the more hardcore fans” (Darker 2016). The success of exclusivity has been proved in recent examples of music releases on a specific streaming service with initially excluding others, consequently subscription numbers have more than doubled (Digital Music News 2016a). Furthermore, services offering both free and paid subscription models could decrease the share of free users by applying sequential release windows and motivate those users to change into the more profitable paid channel (Wlömert and Papies 2016, p. 325).
Summary of Chapters
1 Introduction: Introduces the economic challenges of the music industry, specifically the declining physical sales and the rise of digital streaming, establishing the context for analyzing new distribution models.
2 Conceptual Framework: Establishes the theoretical foundation by examining the windowing model in the movie industry, defining key success factors, and classifying current music distribution practices including the ownership and access models.
3 Application of Windowing in the Music Industry: Analyzes the practical potential of windowing by weighing the opportunities for increased profitability and fan engagement against significant risks like piracy and negative consumer reaction.
4 Conclusion: Summarizes the findings, suggesting that while windowing is theoretically possible, its successful implementation depends heavily on genre specifics, market-level data, and careful management of consumer expectations.
Keywords
Windowing, Music Industry, Sequential Distribution, Streaming, Piracy, Cannibalization, Consumer Behavior, Distribution Channels, Value Gap, Digital Sales, Profitability, Subscription Services, Exclusivity, Music Marketing, Ownership Model.
Frequently Asked Questions
What is the core focus of this bachelor thesis?
The thesis explores whether the "windowing" distribution strategy—commonly used in the film industry to release products sequentially across different channels—is a viable solution for the music industry to address declining profitability and market shifts.
What are the central themes discussed in this work?
The central themes include the transition from ownership-based consumption to access-based streaming, the risks of cannibalization between distribution channels, and the impact of consumer expectations on release strategies.
What is the primary research question?
The research asks if windowing serves as an eligible and promising distribution model to mitigate the industry’s "value gap" and protect business models in an increasingly digital environment.
Which scientific methodology does the author apply?
The author employs a comprehensive literature review, synthesizing research on the movie industry's sequential distribution with current music industry data, complemented by an analysis of recent practical industry examples.
What topics are covered in the main body of the text?
The main body covers the conceptual framework of sequential release, the economic challenges of streaming, an analysis of chances and risks for implementation, and a review of existing exclusive release practices (Service Windows, Tier Windows).
Which keywords best describe this research?
Key terms include Windowing, Music Industry, Sequential Distribution, Streaming, Piracy, Cannibalization, and Consumer Expectations.
How does the "wear-out" effect impact distribution decisions?
The "wear-out" effect describes the shrinking interest in a product after its initial release; postponing releases in specific channels through windowing may lead to decreased consumer appeal and a drop in overall firm value.
Why might windowing in the music industry lead to increased piracy?
The thesis explains that if consumers are denied access to music in their preferred channel, they are more likely to turn to illegal torrent sites to acquire the content, as illustrated by the case study of Kanye West’s album release on Tidal.
Are there specific differences between the movie and music industries regarding windowing?
Yes, the thesis notes that while both are experience-based products, the music industry faces higher challenges with licensing and a higher prevalence of piracy, making the transfer of the movie industry model more complex.
What is the final recommendation regarding the implementation of windowing?
The author recommends that industry executives exercise caution, as success depends on individual factors like music genre, consumer willingness to wait, and the ability of labels to coordinate strategies without fueling piracy.
- Arbeit zitieren
- Sebastian Strootmann (Autor:in), 2016, Is Windowing a Promising Distribution Model for the Music Industry?, München, GRIN Verlag, https://www.grin.com/document/489125
