Cultural Consumption, Diffusion of Innovation Theory, Digital Arts Engagement Services, Music Industry, Pandemic Crisis
k.kasaras [a] external.euc.ac.cy
Adjunct Academic Staff
School of Business Administration, European University of Cyprus
pdouros [a] uniwa.gr
Special Technical and Laboratory Staff, University of West Attica, Greece
73 [a] students.euc.ac.cy
School of Law, European University of Cyprus
Viittaaminen / How to cite: Kasaras, Konstantinos, Panagiotis Douros and Vasileios Benteniotis. 2022. ”Music Industry and Live Streaming Services. Challenges and Perspectives”. WiderScreen 25 (1-2). http://widerscreen.fi/numerot/2022-1-2/music-industry-and-live-streaming-services-challenges-and-perspectives/
The Covid-19 pandemic challenged global economies and the livelihoods of citizens. In this context, some sectors whose economic existence significantly dependent on public attendance, experienced the negative impacts of the pandemic. One of the most affected sectors was the music industry due to social distancing measures and lockdowns. Artists and cultural organizations had to reestablish their presence by adopting live streams. This essay supports the idea that these new patterns of services can become an opportunity to multiply resources for the music industry in the post-Covid period. In order to do so, it interprets the adoption of digital innovations by music listeners and concertgoers, which we do by synthesizing a rich set of literature from the institutionalization of cultural products and by tentatively applying the Diffusion of Innovation (DOI) Theory as it was developed by Everett M. Rogers (2003).
The Covid-19 pandemic challenged the very fundamental components of cultural industries. While the majority of cultural production paused, artists faced tremendous economic destruction, especially those whose incomes depend on performance. In general, the pandemic has had a serious impact on the cultural sector, professionals, audiences, and communities. The present essay argues that music consumption experience can be enriched through the acceptance of new digital technologies. These digital technologies – gradually introduced in the form of streaming – offer new audiovisual experiences and augment the context of cultural consumption. From the perspective of this essay, this is a new and continuously changing environment in cultural studies, mainly because consumers are progressively accustomed to digital experiences.
According to a recent OECD report dated 7 September 2020 ”the cultural and creative sectors (CCS) – along with the tourism sector – are among the most affected by the current crisis, with jobs at risk ranging from 0.8 to 5.5 % of employment across OECD regions” (OECD 2020). Regarding the music industry and for the time period between February and March 2020, the OECD estimates that the music and cultural sector has already lost GBP 50 million in the United Kingdom. Respectively, from the beginning of the year to August 2020, in the United States, the estimated damage is 10.2 billion USD. In addition, due to the worldwide massive cancellations of festivals caused by the pandemic crisis, one has to add to the overall losses from the absolute decrease in sponsorships. OECD (2020) estimates that the decrease in sponsorships to the industry as a whole is predicted to amount to USD 10 billion globally in 2020.
Due to the Covid-19 global lockdown, cultural and creative industries had to redefine their strategies and the positioning of their cultural services in order to maintain some input of resources. Moreover, new modes and patterns of consumption should be adopted already with the affiliation of digital cultural experiences. Inevitably, during the pandemic, digital arts engagement services (DAES) emerged as the only choice for dedicated consumers.
The music industry embraced live streaming in order to soothe the effects of the Covid-19 lockdowns despite the fact that issues concerning licensing and monetization are still under discussion. One could argue that the overall managerial positioning of these digital arts engagement services in cultural markets is still under consideration, mainly because during this period several attempts were made, with the majority of them not recording much success. However, not all attempts failed. In contrast, a few but quite successful examples were reported.
A benefit concert that was organized by Global Citizen of New York City and the singer Lady Gaga on April 18, 2020 was streamed online to the television global broadcast (Picture 1). Under the title ”One World: Together at Home”, the concert featured more than 70 celebrities and its main purpose was to support the World Health Organization and professionals working on the front lines of the pandemic ”battlefield”. The concert managed to raise nearly $128 million in order to support the fight against Covid-19 – $72.8 million of it to local and regional responders.
In addition, during the Covid global lockdown and more specifically on April 24, 2020, the famous online video game platform named Fortnite hosted a 10-minute virtual concert by US rapper Travis Scott (Picture 2). More than 12.3 million people globally witnessed a record-breaking virtual video game concert.
According to the previously mentioned OECD report, it is estimated that the majority viewed the concert via social media (i.e., Twitter, Facebook) and YouTube, underlining the potentiality of partnerships among gaming and creative industries.
The music industry has a vital and continuous relationship with media providers and events. In addition, the engagement of the music industry’s products with new digital environments has been a fact before the pandemic. These two are the keystones in order to build on and convert the pandemic crisis into an opportunity. Given this, the current essay argues that one has to associate the new emerging live streaming services with the theories of consumption of cultural products. From this perspective, emphasis is given to approaches for cultural markets, which argue that social influence is important in determining whether someone decides to buy or reject a product. In cultural markets, an ex-ante prediction of a successful product is either very difficult or impossible. This ambiguity is frequently surpassed by the involvement of music experts and opinion leaders who act on music networks.
In order to appreciate whether these new forms of consumption can lead to profit increase for the music industry, it is vital to understand the music consumer’s acceptance of digital innovations and perspectives. To generate understanding of these adoption issues, this essay uses the long-established diffusion of innovation theory of Everett M. Rogers (2003), which we complement with an interest in the institutionalization of new music consumption habits.
Institutionalization and the production of cultural artefacts
In the 1960’s, institutional theorists introduced the concept of open systems in the study of organizations (Powell & DiMaggio 2019). At the same time, organizations were placed in a cultural and social systems perspective (Douros 2020). Based on this, Peterson & Anand (2004) developed a new perspective on the production of culture. They argued that the symbolic elements of culture are significantly shaped by the social systems within which they are created, distributed, and preserved.
According to Peterson & Anand (2004), six social dimensions characterise rapid cultural change. These aspects are law and regulation; technology; industrial structure; organizational structure; occupational careers; and the consumer market. In practice, the dimensions overlap and should be seen as interdependent.
The Covid-19 pandemic made cultural organizations implement new digital technologies in order to support their products and services. This became a crucial sine qua non in order for institutions to survive and inevitably opened up completely new opportunities for newcomers and the re-organization of the industry. Finally yet importantly, the consumer perception and market were definitely also under change. Drawing on the above mentioned six production factors model as proposed by Peterson & Anand (2004), the pandemic can be seen as creating new conditions for cultural organizations: distinct law and regulation entered into force, technology was innovated, industrial and organizational structures changed in the long-term, careers were shifted, and the consumer market may be distinct in the future. This new setting has enhanced further the engagement of cultural institutions with media providers and new communication technologies.
Media events in relation to music industry (i.e. the Eurovision Song Contest, the Metropolitan Opera and Berlin Philharmonic broadcasts, BBC’s Desert Island Discs etc.) have been under consideration in Communication studies literature since the 1970s (Holt 2018). In fact, as Hirsch claims, ”the mass media constitute the institutional subsystem of the cultural industry system” (1972, 649).
In the early 2010s, YouTube – apart from being a video sharing platform – established a new culture of media events, by featuring live streams of performances. Respectively, a limited number of music festivals – like the Tomorrowland festival in Belgium – have started to develop digital services for their audience, often custom made, in order to mimic the particular in-person experience that a festival can create. As Holt argues the ”in-person communication is being valued in new ways because it is challenged by new technologies, particularly by the smartphone” (2018, 9). Consequently, the next big thing in music festivals is to establish new services orientated to consumer’s digital engagement.
Digital arts engagement services (DAES) in music industry have been applied in two types, in terms of extending the sensory experience mediating reality through technology. These are Augmented Reality (AR) or Virtual Reality (VR) (Wedel et al. 2020). Augmented Reality (AR) seeks to improve actual elements through technology, having as ultimate goal to “see and experience the real world mixed with various virtual objects, without losing the sense of reality” (Karamanoli & Tsinakos, 2015) while Virtual Reality (VR) is associated with personal computers and digital realms; providing experiences that are difficult in real-life (Breese & Vaidyanathan 2020).
Virtual Reality use is very common in gaming. Live performances within gaming platforms were held before the pandemic (The Guardian.com 3.2.2019), but also during the Covid-19 global lockdown (the above-mentioned Fortnite’s virtual video game concert by Travis Scott).
An Augmented Reality example is the one of the performance of Tupac Shakur at Coachella 2012, some fifteen years after his death (Picture 3). This performance boosted Tupac’s record sales to such an extent, resulting to his return to the top of The Billboard Top 200 for the first time in a decade (Caulfield 2012; Billboard 2020).
Also, in 2019 September 7th, the Lyric Opera of Chicago did a unique, one-night-only concert experience along with a digital hologram of the Greek famous opera singer Maria Callas (Picture 4), 64 years after her final appearance here and 42 years after her death (Lyric Opera.org 2019). According to the journalist Hedy Weiss ”you really had to be in the Lyric audience to understand the full impact of this dazzling experience. Suffice it to say that when the svelte and glamorous Callas first walked onto the stage in a lemon-yellow gown (with even the subtle click of her heels audible) the audience erupted in applause and a collective gasp of stunned delight and amazement” (Wttw.com 2019).
Last but not least, quite recently Sir Paul McCartney made history with his ”a duet” with John Lennon in the city of Spokane (U.S.A.) on April 28, 2022. He performed a version of the song I’ve Got A Feeling which appears on The Beatles’ last album, Let It Be, next to a clip of Lennon singing in a 1969 gig.
According to Hirsch and Gruber, ”control over the distribution of many cultural products became reintermediated, shifting to the companies which control the technology platforms through which they are now accessed by consumers” (2013, 3). Nowadays artists and cultural organizations perform on Twitch, Facebook, YouTube Live and other platforms, having their performances accessible either live or prerecorded. Based on this, several event ticketing sellers and organizations worldwide have already added e-tickets for online access to music concerts and theatrical performances. Such events are gaining publicity, but it is still unclear whether they manage to send a clear signal that will cut through the noise, due to the fact that these digital practices at their initial level contain a high degree of uncertainty. However, as Hirsch argues, ”the competitive advantage lies with firms best able to link available input to reliable and established distribution channel” (1972, 646).
This unique structural characteristic of creative industries – along with the assumption that uncertainty in quality is an inherent characteristic of cultural goods (Kretschmer et. al. 1999) – create a fluid environment for them. Economists and marketers have suggested a three part classification of Search, Experience and Credence (SEC) for goods and services, which is based on the ease or difficulty with which consumers can evaluate or obtain information. Cultural goods are ”credence goods” (Kretschmer et al. 1999), which means that quality cannot be ascertained with certainty, or with reference to stable, external criteria, even after consumption. In contrast, ”search goods” and ”experience goods”, quality can be confirmed before and after consumption respectively. In other words, consumers may be unable to appreciate the quality of their cultural products precisely (Darby & Karni 1973). In addition, compared to search and experience goods, these cultural products and services are unique, due to the fact that they do not provide a direct utilitarian function to their users, since they are ”goods that are valued for their ’meaning’” (Lawrence & Phillips 2002, 431). Their value derives from symbolic qualities which are defined by consumers’ interpretation of the products (Beckert et al. 2017).
Cultural organizations need to manage the process of symbolic creation and the quality problem. This is a key challenge for an organization that usually gives rise to the creation of entities that Emons (1997) describes as ”fraudulent experts”, who exploit the inability of consumers to discern quality and offer appropriate services. Such experts are art critics, influencers (Johnstone & Lindh 2018) specialists (McCroskey et al. 1975), mavens (Verboord 2021) and cultural intermediaries that act as gatekeepers in the system. In cultural markets, organisations have at least an obvious objective. According to Yin and Phillips (2020), cultural organizations need to manage critical market agents, e.g. mavens, connectors and salesmen, apart from the selection system of experts. They can have a crucial role in the word-of-mouth social epidemics that define trends.
However, due to the rise of digital, horizontal and complex networks of cultural production, distribution and consumption based on mechanisms of collaborative filtering and social recommendation, we are experiencing a major reversal of the traditional mechanisms of filtering and influence (Kasaras et al. 2012). This indicates the increased importance of networks in cultural consumption. Consumers trust reviews made by other consumers and distrust traditional advertising, and firm-related reviews (Willemsen et al. 2011). Online user-shared information diffuses rapidly like a virus, producing social contagion phenomena (Luarn et al. 2014). This means that the more people talk about a product or a service, the more word-of-mouth encourages additional consumption. This practice leads to ”winner takes all” types of markets (Frank & Cook 2010; Liu et al. 2015; Prakash et al. 2012), where success breeds success. The demand, price and value of a good or a service dependents mainly on the number of people who have already consumed it.
Scholars examine human networks in order to interpret informational cascades. Networks have structures and topologies that allow, filter and sometimes deny the flow of information. According to Kostka et al. (2008, 185) ”the underlying network structure decides how fast information can spread and how many people are reached”. Social network theories emphasize that trait similarity as a friend selection criterion, can increase the clustering coefficient of the social network (David-Barrett 2020). Scholars use the term homophily when defining trait similarity (McPherson, Smith-Lovin & Cook 2001). Homophily describes the tendency of people to associate and bond with similar others and develop similar cultural tastes (Mark 1998). Mark (1998) argues that people with similarities keep close ties, which constitute networks that in most cases become the main sources of information. This is especially true for younger people who use more interpersonal contacts for gaining information (Verboord 2021). Given the fact that cultural goods cannot be ascertained with certainty (even after the consumption), this indicates the increased importance of networks in cultural consumption.
As mentioned previously, the case study of Fortnite’s virtual video game concert by Travis Scott was a smash hit. This success can be explained either from the popularity of the artist, or, by the fact that computer games are a significant phenomenon of the current popular culture (Bullerjahn 2011) which has enabled people to enjoy interacting with both friends and strangers. Most significantly, online gaming has created huge Social Gaming Networks (SGNs), ”defined as computer networks that are simultaneously inhabited by multiple players for the purpose of playing game”, (Alturki 2020, 97383). According to Johry et al. (2021, 140) ”games industry has emerged as a key player in entertainment, with an estimated 2.7 billion players across the globe by the end of 2020, independent of gender, age, and geographical regions”. Moreover, during the Covid-19 a remarkable rise in the sale and consumption of digital games has been recorded, which – as stated by Johry et. al. (2021), demonstrate that they have a pivotal role as a source of entertainment and social interaction during the pandemic. Howe et al., underline, that ”the fact that many modern video game designers have realized the success of social networking sites and attempted to foster the same emphasis on communication and connections in video games” (2018, 2). Video games networks can be proved a solid ground for the application of digital arts engagement services (DAES), mainly because these groups are agents for emotional connection of players through relational maintenance.
Taking all these into account, a new strategic development should be evaluated under the consideration of all these new features and realities that appeared into the pandemic and shaped the digital environments along with the oddities and characteristics of cultural markets. Which means that firms and organizations in cultural industries should dare to take one step forward and develop strategies of promotion in the digital environment, in order to maintain their competitiveness and to follow new consumption patterns related to social epidemics.
Researching the impacts of pandemics on music production
The adoption of the new streaming services is in the focus of contemporary research by professionals and academics related to cultural products. A recent funded project by the Arts and Humanities Research Council (AHRC) in UK (Culturehive.co.uk 2021) suggests that digital arts engagement has been extensive: e.g. “one in three watched online performances, while future engagement beyond Covid-19 is expected to hold up since that 37% say they will watch content online in the future”. Another survey conducted by eMusic (Musicweek.com 2020) has revealed that three in four of its music listeners in the US and UK found music to be very important during lockdown and half of them have viewed performances livestreamed free of charge since the start of the pandemic. In addition, the majority of the respondents claimed that they would not feel confident in rushing back to traditional live performances once restrictions are lifted.
United Talent Agency commissioned a consumer study (Pollstar 2020) on ”Media and Entertainment in the Time of Coronavirus”. This study showed that 90% of concertgoers felt compelled to replace the live music experience while under lockdown restrictions in the time of the pandemic, with 28 % of those having paid to watch a livestream. Most importantly it revealed a strong shift towards a wide array of virtual events. More than one in four argued that they’ve already attended a virtual concert and approximately seven in ten concertgoers who watched a livestream concert during the lockdown, replied that they plan to continue doing so even after live music events return.
Finally, the pre-Covid research by Maasø (2016) on the integration of music-streaming services at a music festival in Norway (Øya festival), analyzed how livestreaming coverage of a festival influenced a large population of music listeners and especially, how few concertgoers experienced this influence. The main outcome of the research suggests that despite the fact that the practice of livestreaming has been applied before the pandemic, the emphasis had primarly remained on live experiences in the ”traditional” sense (Vandenberg et al. 2021).
The pandemic as an opportunity
Music tech companies need to respond to livestream business logistics (i.e. ticketing, investments on advanced technological features to upgrade the shared experience, etc.). The creation of this new task could become a milestone in Research and Development (R&D) for services in cultural production. This is an open field for entrepreneurship and for the development of a new market, where various newcomers and competitors can attack a provisional leader’s weakness.
The wide usage of digital environments during the pandemic, along with the continuous and dynamic familiarization of employees, students, consumers etc. create a new setting. Before the development and adoption of DAES by music industry it is crucial that this setting should be explored in order to become an asset for an integration of new digital orientated services. Under this light, the consequences of the pandemic crisis in music industry should be revalued through the notion of creative destruction conceptualized by Schumpeter (1950), which is a reversal of the established order brought about by entrepreneurs. Entrepreneurship in Schumpeter (1934, 66) is defined as ”new combinations of inputs… [Which] cover the following five cases: (1) The introduction of a new good… or a new quality product; (2) The introduction of a new production method…; (3) Opening a new market…; (4) The conquest of a new source of supply for raw materials…; [and] (5) The implementation of a new organization of any industry”. Digital technology industries incline to disruptive innovation. Mainly because the rates of adoption of new technologies and digital services are considered as highly fluid and volatile, due to their interaction with their users (Flew 2018).
Harvard Business School Professor Clayton Christensen (2003) was one of the first scholars that cited the concept of disruptive innovation. This idea refers to the ways in which new digital disruptive technologies can lead to a market total restructuring. Under this scope, Funk (2018, 12) argues that ”the architecture of software (and its overall performance) is a key factor in the success of most electronic products, and as the Internet of things spreads to mechanical products, software will become a key factor in competition among them and their economic feasibility”.
The term ”Internet of Things” (IoT) broadly refers to the extension of the Internet into the physical realm and has become commonplace in both the vernacular of technologists and consumers (Breese et al. 2020). According to Turchet et al. (2018, 61994) ”in the Internet of Things, ‘Things’ refer to embedded systems that are connected to the Internet, which are able to interact with each other and cooperate to reach common goals”. Recently, the term ”Internet of Musical Things” (IoMusT) has been introduced by authors (Hazzard et. al. 2014) as an emerging field that expands the experience of music technologies.
A definition on the IoMusT is given by Turchet et. al.: It is ”the ensemble of interfaces, protocols and representations of music-related information that enable services and applications serving a musical purpose based on interactions between humans and Musical Things or between Musical Things themselves, in physical and/or digital realms” (2018, 61995). The Internet of Musical Things (”IoMusT”) appears in various applications like smart studio production, haptic devices, augmented and immersive concerts with virtual experience, audience participation and communication etc. In other words, it allows users to easily share data for audio production and of course music creation. These are the reasons why the IoMusT experiences are attracting both artists and audiences around the world and most importantly why it has become more prevalent during the age of COVID-19 where many live musical events, like concerts, are no longer possible in the ”traditional way”. The IoMusT provides the means for entrepreneurs and pioneers to develop disruptive services and to reverse the established order.
According to recent research, as previously presented, livestreaming cultural performances are commonly known to fans, with an increasing importance of social media in promoting events (Danielsen & Kjus 2019; Chen & Lei 2021). Directly connected to this digital arts engagement, is to what extent these virtual attendances in the post-Covid period will become an opportunity to multiply resources for cultural industries. Therefore, the first question is how these new modes and patterns of consumption will be taken up or even better how they get perceived as compatible to consumer’s needs and expectations, as they are shaped today.
Previous research highlighted the ”symbols of social relationship” which are feelings of collectivity generated during a cultural event (Collins 2004) and the creation of a sense of community that binds participants together in a larger culture (Frith 1996). In addition, the thrill of physical proximity to the performer and social interaction have been found to be important to participants (Paleo & Wijnberg 2006; Pitts 2005). To what extent this can be applied to online events (Vandenberg et. al. 2021) is an issue still to be explored. Consequently, the second research question refers to the extent that these livestreamed performances can fulfill ritual characteristics, creating social ties and feelings of community.
An analytical approach for future research
Considering all the above, one has to provide an explanation on how the new services can become an opportunity for music industry to multiply resources, at the post-Covid-19 period. In order to do so, this paper suggests the use of a qualitative approach by using focus group interviews in order to explore participants’ experiences as well as expertise. Focus groups are useful for bringing together mainly homogeneous groups of participants with experience on a given topic on which they can share detailed information. They are considered flexible by nature, and they allow for the exploration of consumer reactions to new services concepts.
However, the ways that these livestreaming services can be adopted by audiences should be highlighted. Despite the fact that the discussion on understanding the technology adoption process is extensive (Molinillo & Japutra 2017), a standard textbook and reference for the implementation and promotion of consumer products, among others, in a new technological environment, is the Everett Rogers’s Diffusion of Innovations (2003). Rogers proposes a model for what he named ‘diffusion studies’ by which he wishes to explain how innovations (ideas, behaviors or objects) are taken up in a population or in other words how they get perceived as new and adopted by the audience.
The adoption of an innovation is apparently related to subject interpretations and it is characterized by uncertainty on decision-making. As Rice and Pearce (2015) argue, the diffusion of innovations theory describes a broad set of factors (i.e. psychological, individual, relational, innovation attributes, communicative skills etc.) that affect this uncertainty and thus adoption. However, all these are also interrelated to a set of demographics factors (i.e. age, sex, education), relevant social and economic status, family status and of course technological skills (digital divide – van Dijk 2005). According to Rice and Pearce, ”unequal adoption of communication/information technologies generally relates to differential participation in social, informational, and economic activities, as influences and as outcomes” (2015, 402).
All these underline the need of an analytical approach that will be based on qualitative data and that will lead to a deeper understanding on the potentialities of the adoption of new streaming services in music industry.
This essay suggests that the wide usage of digital environments during the Covid-19 health crisis, alongside with the continuous and dynamic familiarization of populations, create an open field for entrepreneurship in music industry. It is also argued that music festivals and concerts participation connote cultural ritual ties and create social ties and feelings of community. Respectively, online networks and communities contain comparable components and conditions. Therefore, it is crucial to interpret to what degree these livestreamed performances can fulfill ritual characteristics and support feelings of community. Moreover (and at a second level), it is important to understand and analyze the differentiating ingredients that online communities have, in relation to ”traditional” networks of concertgoers.
Everett Rogers’s Diffusion of Innovations theory is used extensively in order to interpreter the rate at which consumers are likely to adopt a new product or service, or in other words, the rate at which new ideas and technology spread. This is why, it is considered here, as the appropriate research model so as to highlight the consumers’ adoption intention on music livestreaming services. Additionally, it is of great interest to associate possible differences in the adoption of new services that may be related to different socio-demographic characteristics of the consumers and to explore whether fans of different music genres will record different attitudes regarding their adoption.
Given the above-mentioned, this essay has set the theoretical framework for a future consumer research, into organisations from both public and private sector of Greece that have already established live streaming concerts. The first one is the Athens Concert Hall Organisation, which is a non-for-profit organisation administered by the Greek Ministry of Culture. Also known as Megaron, it is still the biggest and most prestigious Concert Hall in Greece and it is considered as a very busy and remarkable creative arena for cultural and educational activities, an arts Centre with great impact and stable audience. The annual programme consist largely of classical music and opera, music works from all over the world, music by younger composers, jazz and many pop artists as well as dance, and the visual arts. Finally, another prestigious organization coming from the private sector is the Christmas Theater. As the largest stage in Athens, it hosts concerts from all music genres and it is considered as a very popular concert venue for all ages.
All links verified 11.8.2022
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