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DUTCH MUSIC to YOUR EARS” a St Udy to Design New Activities for Buma Cultuur to Deal with the Regime Shift Effects in the Dutch Music Industry

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DUTCH MUSIC to YOUR EARS” a St Udy to Design New Activities for Buma Cultuur to Deal with the Regime Shift Effects in the Dutch Music Industry “DUTCH MUSIC TO YOUR EARS” a st udy to design new activities for Buma Cultuur to deal with the regime shift effects in the Dutch music industry. supervisors : Dr. D.L.M. Faems (University of Twente) Dr. ir. K. Visscher (University of Twente) P. Smidt (Buma Cultuur) author : J.J. Schütz date : 23 rd of October , 2009 1 Copyright by xkcd 2 “Dutch music to your ears” a study to design new activities for Buma Cultuur to deal with the regime shift effects in the Dutch music industry. Jasper Schütz 3 Management summary Digitalization of media and internet developments have created new online music distribution possibilities, which have affected the music industry. The purpose of this research has been to find new activities that Buma Cultuur can deploy in order to deal with this regime shift in the music industry. The research constraint defined that these new activities should not require any radical reorganizations. Music industry actors can deploy coping strategies to deal with a regime shift situation. These strategies can be defensive, adaptive or a combination of both strategies. A coping strategy effects model has been developed to determine the opportunities and threats of each strategy. Data triangulation processes have been used to compare documents, news sources and the transcripts of interviews with Dutch music industry actors. The results have been used to define the coping strategies of international music industry actors and to define the effects of these coping strategies. The results have also been used to determine which new activities of Buma Cultuur would benefit the Dutch music industry actors. From the various sources of data, it is now understood that the major music companies, the independent music companies and the artists have all deployed coping strategies. The opportunities and threats that resulted from these strategies were different for each music industry actors. The interviews with the respondent have resulted in many new activities that Buma Cultuur can deploy to support Dutch music industry actors. New activities have been suggested in the areas of music promotion, knowledge support, trade support and artist support. The current opportunities and threats of the Majors, Indies and artists have been combined with the suggestions for new activities. This has resulted in three roles that Buma Cultuur can deploy to support Dutch music industry actors. ‘The major record company support role’ focused on activities that support Majors through new business model creation, finding new cooperation partners and promoting music copyright. ‘The Independent music company support role’ aims for activities that assist Indies in creating global exposure for their artists, support experimentation and exploration and support talent exposure. ‘The artist support role’ sets up activities that create national exposure for Dutch artists, support self distribution, fan binding and dealing with new actors. This role also engages in activities to create international visibility for artists. To implement the results of this research, Buma Cultuur should choose one of the roles. This will effectively support either the Majors, the Indies or the artists in the Dutch music industry. But since Buma Cultuur has always been able to maintain support for all music industry actors, some activities from each role can be deployed. Although some struggles exist among the roles on the subjects of copyright protection and self distribution of artists, three activities have been found that benefit the major music companies, the independent music companies and the artists at the same time. These three activities are recommended for direct implementation. 4 These three new activities are: 1. Start creating exposure for Dutch music through all possible online channels Many new promotion channels have become available since the arrival of internet. With global competition increasing, Dutch music can easily become less visible to consumers. Buma Cultuur can use its experience and resources to create exposure for Dutch music that is otherwise unavailable to Dutch artists. 2. Setup and support experimental and visionary activities Buma Cultuur has the organizational and financial structure to setup and support various experimental events and programs. Current experience in events can be used to create visionary events and to support initiatives deployed by other actors. Visionary activities can set an example for other business actors and can even assist in the creation of a new business model in the Dutch music industry. At the same time, new activities will be avoided which can also be set up by other music business actors. 3. Support the development of better Dutch artists Buma Cultuur can create long term visibility for Dutch artists by increasing the overall quality of Dutch music through education and excellence. Since it is currently unclear which business model will become dominant, all music actors can benefit most through successful Dutch artists, as these successful artists can promote themselves. To successfully start the implementation of these recommended activities, it is advised to start with small, unique activities that deliver quick results. During the first activities, current expertise and skills should be used. As the implementation progresses, new capabilities should be created. Expertise of network relations should be embraced and all available channels can be considered for activities. The right type of activities are deployed when no interference with competitive music business processes is caused. 5 Preface I would like to take this opportunity to thank my supervisors from both the University of Twente and Buma Cultuur. Dries Faems and also Klaasjan Visscher have been most supportive in my choice to focus on the changes in the music industry. Peter Smidt of Buma Cultuur has enabled me to interview many Dutch music actors, which has been a very uplifting experience and a great way to discover the Dutch music industry. Without their contributions and expertise, this thesis would not have been possible. Furthermore, I would like to express my gratitude to the respondents for their time and knowledge, to Roel for proofreading the thesis and to xkcd.com for supplying the very appropriate cartoon. … and last but definitely not least, much love to my girlfriend for all her support, my parents for their endless patience and ‘Erve P0nXn0R’ for the final inspiration to finish it all. 23 rd of October, Enschede 6 Table of contents Management summary ............................................................................................................................. 4 Preface ...................................................................................................................................................... 6 Chapter 1 – Introduction ..................................................................................................... 9 1.1 Changes in the music industry ............................................................................................................ 9 1.2 The Dutch Music Industry ................................................................................................................. 10 1.3 Buma Cultuur .................................................................................................................................... 11 1.4 Research Questions .......................................................................................................................... 11 Chapter 2 - Regime Shifts .................................................................................................. 13 2.1 Sociotechnical innovations ............................................................................................................... 13 2.2 Regime shift dynamics ...................................................................................................................... 13 2.3 Summary ........................................................................................................................................... 15 Chapter 3 - Coping strategies ............................................................................................ 16 3.1 Organizations and regime shift ......................................................................................................... 16 3.2 Defense Strategy ............................................................................................................................... 17 3.3 Adaptation Strategy .......................................................................................................................... 18 3.4 Strategy combinations ...................................................................................................................... 21 3.5 Coping strategy effects model .......................................................................................................... 23 3.6 Summary ........................................................................................................................................... 25 Chapter 4 - Methodology .................................................................................................. 26 4.1 Research Method .............................................................................................................................. 26 4.2 Research setting ...............................................................................................................................
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