Value and Value Creation – Popular Music in the Digital Era: the Case of the Independent Music Industry in South Korea

Value and Value Creation – Popular Music in the Digital Era: The Case of the Independent Music Industry in South Korea

A thesis submitted to the University of Manchester for the degree of Doctor of Philosophy in the Faculty of Humanities

2014

Hwanho Choi

Manchester Business School People, Management and Organisations Division

Table of Contents

List of Tables ...... 5 List of Figures and Picture ...... 6 List of Abbreviations ...... 7 Abstract ...... 8

Chapter 1. Introduction ...... 11

Chapter 2. Value Creation and Co-Creation ...... 21 2.1. Introduction ...... 21 2.2. The Transition of Value and Value Creation ...... 22 2.2.1. Goods-Dominant (G-D) Logic: The Traditional Perspective on Marketing, Value and Value Creation ...... 22 2.2.2. The Transition from the Exchange Paradigm to Value Creation ...... 27 2.3. Service-Dominant Logic and Value as Consumers’ Creation ...... 34 2.3.1. The Development of Service-Dominant Logic and Value Co-Creation ...... 34 2.3.2. Value Co-Creation in the Digital Age ...... 38 2.3.3. Value as Consumers’ Creation ...... 41 2.4. Value Creation of Consumers ...... 44 2.4.1. Consumer Culture Theory (CCT) ...... 44 2.4.2. Consumption Community ...... 47 2.5. Conclusion ...... 52

Chapter 3. Media Development and Its Impact on Cultural Production ...... 55 3.1. Introduction ...... 55 3.2. Kittler: An Introduction ...... 56 3.2.1. The Discourse Networks of 1800 and 1900 ...... 58 3.2.2. The Discourse Network of 2000: Kittler in the Internet Era ...... 61 3.3. Social Media, and Cultural Production and Consumption ...... 64 3.3.1. The Emergence of the Social Media and Its Impacts on Life, Culture and Creativity...... 64 3.3.2. Participatory and Convergence Culture ...... 67 3.4. Conclusion ...... 74

Chapter 4. Production and Consumption of Popular Music ...... 77 4.1. Introduction ...... 77 4.2. Brief Industry Background: The Industrialization and Commercialization of the Music Industry ...... 80 4.3. The Traditional View on Value Creation in the Music Industry...... 91 4.4. Critiques of the Traditional View: The Convergence of Value Creation in the Popular Music Industry ...... 94 4.4.1. Consumption: Popular Music and the Audience ...... 94 4.4.2. Production: Creativity and Commercialism ...... 100 4.5. Value Creation in Popular Music in the Digital Age ...... 107 4.5.1. The Impact of the Internet on the Music Industry ...... 107 4.5.2. Innovation and Restructuring in the Music Industry ...... 113 4.5.3. The Democratization of the Music Industry ...... 116

4.6. Conclusion ...... 120

Chapter 5. Methodology ...... 124 5.1. Introduction ...... 124 5.2. Qualitative and Quantitative Research ...... 125 5.3. Research Topic ...... 129 5.4. Research Approach ...... 130 5.5. Research Design and Plan ...... 132 5.6. Qualitative Research ...... 134 5.6.1. The Quality of Qualitative Research ...... 135 5.6.2. Case Study ...... 138 5.7. Data Collection ...... 140 5.7.1. Secondary Data ...... 140 5.7.2. Primary Data: Interviewing ...... 140 5.8. Data Analysis ...... 146 5.9. Conclusion ...... 149

Chapter 6. The Music Industry in South Korea ...... 151 6.1. Introduction ...... 151 6.2. The Development of the Music Industry in South Korea: 1900s - 1990s ...... 152 6.2.1. The Emergence of the Music Industry: 1907 – 1945 ...... 152 6.2.2. The Formative Period of the Music Industry: 1945 to the early 1960s ...... 154 6.2.3. The Emergence of the Modern Music Industry: 1960s – 1970s ...... 156 6.2.4. The Period of Growth in the Music Industry: 1980s – 1990s ...... 162 6.3. The Rise of the Digital Age and the Pursuit of Globalization: 2000s ...... 167 6.3.1. The Rise of the Digital Music Market...... 167 6.3.2. The Dominance of Idols and the Pursuit of Globalization ...... 175 6.3.3. Value Creation in Popular Music in the Digital Age in South Korea ...... 179 6.4. The Emergence of an Independent Music Industry ...... 185 6.4.1. The Area around Hongik University ...... 185 6.4.2. What is Indie Music in Korea? ...... 187 6.4.3. The Rise of Independent Music Labels and Culture ...... 190 6.4.4. The Re-emergence of Independent Music ...... 193 6.5. Conclusion ...... 200

Chapter 7. Consumers of Independent Music in the Digital Age ...... 204 7.1. Introduction ...... 204 7.2. The Consumption Behaviour of Independent Music Consumers ...... 205 7.2.1. Information-Processing Approach ...... 207 7.2.2. Experiential Approach ...... 212 7.3. Frame Alignment Attitudes of Music Consumers Regarding Independent Music ....217 7.3.1. Fear (Minimizing Inappropriateness) ...... 218 7.3.2. Responsibility (Maximizing Appropriateness) ...... 223 7.4. Uses of Digital Communications Media ...... 226 7.4.1. Technical Effects...... 227 7.4.2. Acquisition ...... 230 7.4.3. Relationship ...... 234 7.4.4. Engagement ...... 239 7.5. Music Communities or Projects ...... 244 7.5.1. Physical Resources ...... 245

7.5.2. Social Resources ...... 250 7.5.3. Cultural Resources ...... 253 7.5.4. The Use of Digital Networks ...... 255 7.5.5. Continuous Resource Integration ...... 256 7.6. Conclusion ...... 259

Chapter 8. Independent Record Labels in the Digital Age ...... 262 8.1. Introduction ...... 262 8.2. The Impact of and Motives for Using Digital Communications Media ...... 264 8.3. Four Value Creation and Co-Creation Strategies ...... 265 8.3.1. Contacting ...... 266 8.3.2. Bonding ...... 269 8.3.3. Spreading ...... 275 8.3.4. Managing ...... 279 8.4. Concerns and Limitations Concerning Digital Communications Media ...... 284 8.4.1. Adaptability ...... 284 8.4.2. Uncontrollability ...... 285 8.4.3. Representability ...... 286 8.4.4. Applicability ...... 288 8.5. Conclusion ...... 289

Chapter 9. Discussion ...... 293 9.1. Introduction ...... 293 9.2. Summary of Literature Review ...... 294 9.3. Discussion of Research Findings ...... 297 9.3.1. Symbolic Consumption of Music ...... 299 9.3.2. Co-creative Consumption Community ...... 303 9.3.3. Consumer Sharing System and Co-creative Strategy of the Independent Music Sector in the Digital Age ...... 309 9.4. Conclusion ...... 315

Chapter 10. Conclusion ...... 317 10.1. Revisiting the Research Aims ...... 317 10.2. Limitations ...... 319 10.3. Implications for Theory and Practice ...... 321 10.4. Future Research ...... 324

References ...... 326 Appendix 1. Typical Interview Guide for Record Label ...... 357 Appendix 2. Typical Interview Guide for Music Audiences ...... 358 Appendix 3. Example of codes and themes developed using NVivo 9 ...... 359

(Word counts: 108,028)

List of Tables

Table 2. 1. The types of exchange ...... 23 Table 2. 2. The competing frames of value creation ...... 29 Table 2. 3. Inherent values in relationship and exchange marketing ...... 31 Table 2. 4. Services logic versus goods logic ...... 32 Table 2. 5. Limitations and implications of distinguishing characteristics of services ...... 33 Table 4. 1. US Market Share of Total Album Sales by Company (%)………………………………..83 Table 4. 2. UK Market Share of Album Sales by Company by Volume (%) ...... 84 Table 4. 3. Different Types of Consumption ...... 100 Table 5. 1. Features of the two main paradigms …………………………………………………………...126 Table 5. 2. Fundamental differences between quantitative and qualitative research strategies ...... 126 Table 5. 3. The difference in emphasis in qualitative versus quantitative methods ...... 127 Table 5. 4. Interviewees from the record labels ...... 142 Table 5. 5. Music consumer interviewees ...... 143 Table 6. 1. The items of the biggest expenditure on culture in 1997 (%)………………………….165 Table 6. 2. Number of records selling more than a hundred thousand copies, 2001 – 2010 171 Table 6. 3. The size of online music services by category, billion Korean won ...... 172 Table 6. 4. Ways of accessing music-related information, % ...... 173 Table 6. 5. Size of SM and YG Entertainment, billion Korean Won ...... 177

List of Figures and Picture

Figure 4. 1. Hypodermic syringe or direct effect model ...... 95 Figure 4. 2. Two-step flow model ...... 96 Figure 4. 3. Two-way text-audience relationship...... 96 Figure 4. 4. The traditional supply chain in the music industry ...... 109 Figure 4. 5. The supply chain in the music industry in the digital age ...... 109 Figure 4. 6. Traditional music distribution value chain ...... 109 Figure 4. 7. Digital music industry distribution ...... 110 Figure 6. 1. The size of the physical music markets, 1995-2010, billion Korean won………167 Figure 6. 2. The size of the digital music market, billion Korean won ...... 168 Figure 6. 3. The size of the global music market, million US dollar ...... 168 Figure 6. 4. Number of distributors, 2000 to 2004 ...... 169 Figure 6. 5. Number of retailers, 2000 to 2004 ...... 169 Figure 6. 6. Number of people buying records, % ...... 170 Figure 6. 7. The most popular genres of domestic pop music, % ...... 174 Figure 6. 8. Top five record labels in South Korea, billion Korean won ...... 174 Figure 6. 9. The preferred popular music genres in 2011, % (N=1226) ...... 175 Figure 6. 10. Market share of digital music services in the first half of 2012 ...... 180 Picture 6. 1. The early trademark of Okeh Records………………………………………………………… 153 Picture 6. 2. Lyrics that came with the record ‘Glorification of Death’ ...... 154 Picture 6. 3. The SP records of Oasis Records and KingStar Records ...... 156 Picture 6. 4. An advertisement for the club Nirvana ...... 160 Picture 6. 5. The first Campus Song Festival’s record, a live recording ...... 161 Picture 6. 6. The first record produced by an independent label ...... 190

List of Abbreviations

4Ps Product, Price, Place and Promotion AMA American Marketing Association CCT Consumer Culture Theory CJ E&M CJ Entertainment and Media Group G-D Logic Goods-Dominant logic ICT Information and Communication Technology IFPI International Federation of the Phonographic Industry IHPI Intangibility, Heterogeneity, Inseparability and Perishability IMF International Monetary Fund KISDI Korea Information Society Development Institute KOCCA Korea Creative Contents Agency KT Korea Telecom LP Records Long play records R&D Research and development S-D Logic Service-Dominant logic SNS Social Network Service SP Records Short play records

Abstract

The University of Manchester Hwanho Choi Degree of Doctor of Philosophy – PhD

Value and Value Creation – Popular Music in the Digital Era: The Case of the Independent Music Industry in South Korea

2014

This thesis investigates the production and consumption of the independent music sector in South Korea in the digital age. It examines the value of music and how it is created in the digital age. Thus, it suggests the impacts of the Internet for consumers and producers. The investigation is based on the view that there has been a transition to value co-creation by consumers and producers, away from the traditional view of value being produced by firms alone, and that this value can be symbolic, emotional and experiential. The thesis shows that this transition has indeed occurred in the music industry. To investigate value and value creation in popular music in the digital age, an in-depth single case study of the independent music industry in South Korea is conducted. Qualitative data was collected, using semi- structured interviews, from independent music consumers and independent record labels. This research reveals that consumers’ music consumption is made up of both information-processing and experiential behaviours. Their desire to minimize the inappropriateness and maximize the appropriateness of independent music and its culture contributes to its sustainment and expansion. This research also reveals the online practices of consumers, categorized into three themes: acquisition, relationship and engagement. In addition, the examination of music communities in South Korea shows that consumers are resource integrators. It reveals that the consumption communities are organized and maintained through various operant resources of the participants. The data from the independent record labels reveals that they are trying hard to interact with consumers and benefit from the new media. They are found to conduct four value (co)creation strategies: contacting, bonding, spreading and managing. Finally, this research shows that difficulties in utilizing social media can be categorized into the following: adaptability, uncontrollability, representability and applicability. The key contributions of this research are as follows: Firstly, it extends our understanding of the symbolic consumption of music. Secondly, it identifies a form of consumption community, which can be termed a ‘co-creative consumption community’. Lastly, it demonstrates the value (co)creation practices used by consumers and the strategies used by producers. These findings extend the existing knowledge and suggest new evidence that contributes to an increased understanding of the concept of value co-creation, and to consumer research in general. In addition, the findings will benefit marketers and producers, especially in cultural industries such as the music industry.

Declaration

I declare that no portion of the work referred to in the thesis has been submitted in support of an application for another degree or qualification of this or any other university or other institute of learning

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Acknowledgements

First, I want to express my gratitude to my supervisor, Professor Bernard Burnes.

Thanks to his support, guidance and encouragement throughout the PhD course, I have been able to complete this work. His insightful suggestions and constructive comments inspired and energised me throughout this journey. I also would like to thank my second supervisor, Dr Stephen Eldridge. His comments and insights helped me to improve the quality of this work.

I would like to thank to all interviewees for their participation, cooperation and interest in this study. This research was possible only as a result of their generous, voluntary participation. To all PGR staff members, thank you for your support.

I want to convey my appreciation to Dr Michael Jones at University of Liverpool.

His support and encouragement, dating back to my undergraduate years, have always been motivational for me.

Finally, I want to say thanks to my parents and sister. I appreciate their eternal support.

Chapter 1. Introduction

Traditionally, the value of a good was perceived as being determined by a firm, and value creation as being controlled at the firm level (Normann and Ramirez, 1993; Prahalad and Ramaswamy, 2002). Firms would focus on producing goods to entice customers who were pre-defined by their conventional market research. The value chain of the firms was organized so as to increase productivity and minimize costs. Therefore, the value creation processes were aimed at maximizing the firms’ effectiveness at delivering the produced value to consumers, thus gaining the maximum financial returns. This shows that value creation was based purely on the firm’s perspective, while the role of the consumers was barely considered. The consumers were located at the end of the firm’s value creation process and their consumption was not a big concern for firms, as long as they were able to sell their products to them. Therefore, the value of a good was defined in economic terms only. According to Lusch, “under the old logic, customers were viewed as operand resources; they were segmented, targeted, promoted to, persuaded, and somehow convinced to buy. In short, they were exogenous to the organization” (2007, p. 265).

This view on value and value creation has been challenged, more recently, by research that is termed the ‘service-dominant (S-D) logic of marketing’ by Vargo and Lusch (2004a) and ‘co-creating value with customers’ by Prahalad and Ramaswamy (2000, 2004). These studies show that consumers are active value creators and that value is co-created by consumers and producers. Lusch argues that, “under S-D logic, customers are active participants who bring needed skills or competences to the exchange process; in this context, they are operant resources and endogenous to the marketing process” (2007, p. 265). This suggests that value is also created through consumption activities rather than only being embedded in goods. Vargo and Lusch suggest that “goods are appliances, and the customer must add mental and physical effort to cocreate value” (2004b, p. 333). Therefore, according to this view, the role of marketing should be redefined as marketing is seen as having an interactive aspect that creates value. This implies that marketing should focus on “cultivating relationships with customers” rather than “hunting for customers” (Sawhney and Kotler, 2001, p. 392).

This phenomenon applies to cultural and media-related industries in the digital age, for example. Rather than viewing audiences as couch potatoes, they are regarded as active participants in the production and consumption of media content. With the rise of the Internet and social media, audiences can now express and share their emotions, experiences, and creativity without the limitations of time and space. This has enabled easier ways to communicate and share content. This calls for a different approach from firms, aimed at integrating their own activities with those of the active audiences. This participatory phenomenon has been greatly enabled by the rise of the Internet and digital communications media such as social media. Media audiences can now alter media texts, assign different meanings to them and share them with others. This emerging nature of the digital culture demonstrates the convergence of production and consumption in media-based and cultural industries. Accordingly, audiences are regarded as active participants and value creators (Benkler, 2006; Jenkins, 2006).

The music industry is no exception to this change; Jones writes that “music is sensitive to social and cultural change because it is an expressive, symbolic medium” (2012, p. 33). The predominant view has always been that the value of music is created by the producers, and consumers are just the recipients of this value. The music industry retained this notion that the value of music is only embedded in physical forms, even after the rise of the Internet and social media. Therefore, major labels were not good enough “to use information and knowledge to develop more customer-oriented and value-generating services for their customers and to create total service offerings out of physical products or services” (Grönroos, 2007, p. 11).

Although the major music firms have criminalized their own consumers and ignored the effects of digital technologies, based on the notion of piracy, it is clear that the rise of the Internet and social media have changed the way audiences experience and consume music (Condry, 2004). The actions such as suing pirates, which major labels have taken to prevent illegal piracy, have criminalised many activities music consumers participate in on the Internet. However due to the nature of the Internet some activities, such as sharing and remixing, should be seen as beneficial for

12 producers as well because the activities consumers take part in should be seen as promotional and creating extra value for popular music (Baym, 2012; Condry, 2004). Therefore, the study of how independent music consumers in South Korea use digital technologies to consume and experience music will show what the value of music for the consumers is in this age and how it is created, appropriated, confirmed and shared. This cannot be achieved by criminalizing music consumers in the digital age, which will simply prevent music industry players from understanding how customers use and engage with the technologies. Focusing on the piracy issue has eliminated music lovers from the music markets by criminalizing their activities. However, the music audiences have always been there. They have enjoyed and experienced music in many different ways, including in their daily lives, by attending performances and by communicating with other music fans and musicians. To understand music audiences in the digital age, we need to ask what the value of music is today, and we need to understand how audiences use digital technologies and tools to experience music.

Although the major labels tried to establish digital music services such as Pressplay (a joint venture between Sony Music Entertainment and Universal Music Group) and MusicNet (backing of EMI, BMG and Warner Music Group), this innovation failed due to several issues such as high prices (Hu, 2002; Michaels, 2011). For several years, so-called social media and viral marketing have been a central issue for music companies. However, firms have focused on delivering marketing messages by manipulating “fake grassroots” (Jenkins et al., 2013, p. 77) activities such as hiring influential bloggers rather than interacting and communicating with their consumers. The record labels who have noticed the impacts of social media and their fans use of it now understand it to be one of the key ways to promote their goods and interact with their customers. However, little research has been done into how record labels use digital technologies to interact with their fans and create or co-create value and meanings. This is another important dimension of understanding the music industry economy in the interactive and networked environment that prevails today.

An emerging approach to understanding value and value creation will be emphasized in this research. However, this research is not only based on an optimistic or utopian

13 perspective of consumers’ active roles in value creation and their creation of, participation in and production of cultural content. This research will explore what is actually going on in the music business industry with the rise of networked digital technologies. Particularly, the case study of the independent music industry is conducted. This balanced approach will demonstrate the value creation by consumers and producers, and suggest that the value of music is not only economic but also symbolic, experiential and emotional. Based on this approach, this research will show that value is co-created.

Chapter 2 discusses the concept of value co-creation with consumers. The literature also suggests that the value of goods is not only embedded in the goods themselves. However, the traditional understanding of companies as value creators and consumers as value receivers does accurately reflect the current picture of value creation (Vargo and Lusch, 2004). This is especially the case with the rise of the Internet and social media platforms (Wirtz et al., 2010). The review discusses that value is multi-dimensional as consumers create and share their own life stories and consumption experiences (Helkkula et al., 2012). This indicates that the value of goods does not only indicate the traditional economic aspect but also includes non- economic aspects such as experiential, emotional, and contextual values that consumers create and share.

To understand music consumers in the digital age, exploring the literature in media and cultural studies was useful as the music industry is a part of cultural industries. Chapter 3 suggests that in media studies, a similar concept like value co-creation with consumers in marketing exists. This is termed participatory culture (Jenkins, 2006). However, the research does not only emphasise the participation of media audiences. The research offers a convergence between corporate driven production and consumer driven creativity which is relevant in this interconnected age. The research also provides in-depth understanding of audiences of media content in this age. It shows that consumers of cultural and media content participate in the value creation of the content by firstly creating their own content using that produced by media companies of TV programmes or movies (Jenkins, 2006; Burgess and Green, 2009). Secondly, it is also practiced in their daily lives (Deuze, 2012). For example,

14 by using social media the consumers create and share their consumption of cultural and media content. This includes diverse simple activities such as sharing and commenting. The importance of the review is that if the review of marketing indicates the sorts of values that consumers create in this age, the media literature suggests how the value is created and shared in daily life contexts.

Chapter 4 discusses a classical understanding in terms of the production and consumption of popular music by Adorno and Horkheimer (1973). This chapter also outlines the transformation of the music industry in the digital age (e.g. Graham et al., 2004). In addition, it shows that consumers have become a part of value creation as supporters, promoters, patrons, and creative partners (Baym, 2011; Baym and Burnett, 2009; Wikstrom, 2009).

Although the review of Chapter 4 offers a fundamental understanding in terms of the popular music industry in the digital age, the existing literature cannot fully explain the importance of the daily involvements of consumers using the Internet and social media, and their value creation and sharing processes whilst doing that. In addition, the concept of value co-creation with consumers is a relatively new concept and therefore lacks empirical findings to support.

There are existing studies in organisation and innovation studies that have investigated the collaboration with consumers. The user-led innovation has investigated various setting, such as open-source software (Lakhani and von Hippel, 2003) and mountain biking (Lüthje et al, 2005). Another form of collaborative innovation that was suggested by Nambisan (2002) is VCEs (virtual customer environments) which are developed and managed by companies. For companies, the virtual space is to collaborate with their customers in new product development, testing existing products, and product support activities (Nambisan, 2002; Nambisan and Baron, 2009). The examples include IBM and Microsoft (Nambisan and Baron, 2009) and Ducati, the Italian motorcycle company (Verona et al, 2006).

However, research into collaborative innovation in the fields of organisational studies and innovation has tended to focus on the benefits that firms can gain

15 through consumers’ commitment and participation (Moeller et al, 2013). In addition, a provider-dominant research approach on collaboration studies and service research focuses on the engagement with the consumers and their value creation that normally takes place in physically bounded virtual spaces and occurs by direct interactions. This eventually subordinates the role of consumers as limited to donating their time and creativity for the firm’s benefit (Heinonen et al, 2010; Moeller et al., 2013).

The literature review suggests that in the digital age, value becomes multidimensional, not only in economic terms but also in non-economic aspects, and value creation is co-creational between producers and consumers, and between consumers. Holbrook defines customer value as “an interactive relativistic preference experience” (2006, p. 212). Helkkula et al. suggest that “value in the experience is an intrasubjective, socially intersubjective, context- and situation- specific phenomenon that is both lived and imaginary, constructed based on previous, current, and imaginary future experiences, and is temporal” (2012, p. 66). Therefore, value is individually defined and collectively formed. In the digital age, relationships do not indicate only direct person-to-person or producer-to-consumer relationships but also indirect relationships. This suggests the possibility that the value co-creation of popular music takes place in a virtual community on the Internet, where diverse, various actors such as consumers and producers participate. Therefore, it is influenced by the perspective of actor-to-actor interactions by Vargo and Lusch (2011). According to the perspective of Normann and Ramirez, this is a “value- creating system” in which “different economic actors – suppliers, business partners, allies, customers – work together to co-produce value” (1993, p. 66). Lusch et al. define that “a value network is a spontaneously sensing and responding spatial and temporal structure of largely loosely coupled value proposing social and economic actors interacting through institutions and technology” (2010, p. 20). Therefore, the community is not bounded or fixed; rather, it is a space where consumers and producers co-create the value of popular music by engaging in direct or indirect interactions and relationships. This forms value networks where value creation is networked between producers and consumers, and consumers. However, we know little about how consumers who are connected to the Internet and social media without temporal and spatial limitations are engaged with the consumption of

16 content such as music and music videos, and what values they create and share in the process. In addition, we know little about how record labels utilise social media and the values their consumers create and share to co-create value.

Therefore, the objectives of this research are

1) To investigate the value of music in the digital age 2) To examine the value creation of music in the digital age 3) To explore its implications for actors (e.g. consumers and producers) in the music industry

To do that, this research involves an examination, through a case study, of the independent music sector in South Korea. Although the study of the small industry sector is not conducive for generalisation to other settings, the aim of the study is to gain an in-depth understanding of this particular case, rather than to achieve the statistical generalisation to a population. Remaining part of the chapter outlines the structure of the remainder of the thesis.

Chapter 2 This chapter shows that value and value creation are not just produced and controlled by firms; rather, they are co-created with the consumers, who create value and assign meanings. The chapter argues that our perspective on value and value creation should move away from the traditional exchange paradigm under which the value creation of goods is entirely controlled by firms, to a new paradigm that emphasizes the interactional, relational and co-creational nature of value and value creation. Thus, the demarcation between producers and consumers is eliminated. Firms are required to understand consumption activities and experiences. With the rise of digital technologies, the co-creation of value is becoming an inevitable transition, as ordinary people can interact and communicate with other people and firms. Therefore, value is not only economic in nature and does not only occur through the exchange of a good. Rather, this chapter suggests that value can be symbolic, emotional and experiential, and is co-created.

Chapter 3 This chapter argues that the development of the media has influenced our lives, cultures and societies. To explain the issue, the chapter makes use of Kittler’s thesis on media that suggests that different media systems construct the discourse networks of each era. Kittler’s thesis suggests that the networked digital technologies define the present era by shaping society, culture and individuals. With the rise of digital technologies, individual participation and collective expression are possible. This has created a situation where the distinction between producers and consumers in cultural industries is blurred. Based on this, the convergence of top-down media production and bottom-up consumer creativity and participation is suggested. This chapter further suggests that the participation of media audiences and value co- creation between producers and consumers need not be entrepreneurial, such as audiences producing their own content; rather, it can include every activity that audiences engage in on the digital space, such as viewing, sharing and commenting, all of which create symbolic, emotional and experiential value.

Chapter 4 This chapter, firstly, discusses the development of the music industry from the early 1900s. Its industrialization and commercialization enabled record companies to control the production and consumption of popular music. This has been a central criticism in discussions of the music industry, and the focus of a thesis by Adorno and Horkheimer, one of the key works in the literature. However, this chapter suggests that the production and consumption of popular music has been shaped by dynamic relationships between producers and consumers. This aspect of the music industry is now being encouraged by digital technologies. With their rise, the value of music is being created by diverse experts from different industries. Moreover, musicians can control their own careers and music audiences can become value co- creators through various means. This chapter, therefore, shows that the value creation of music is not only produced by record firms and the value of music is not embedded in physical and economic terms.

Chapter 5 This chapter suggests an appropriate research paradigm and method for investigating the research questions of this thesis. It proposes that a qualitative research approach is appropriate and a case study a suitable method for achieving this. The chapter also explains why the specific research topic and research case were chosen. Next, it describes the data collection and analysis procedures. This involves, for the data collection, the types of data collected, how they were collected, when and from whom. For the qualitative data analysis, the use of the software, NVivo, is explained.

Chapter 6 This chapter analyses the development of the music industry in South Korea from the 1900s to the present day. In order to achieve this, various secondary data sources, such as news articles, research articles, reports and books, were collected, reviewed and analysed. The chapter shows how the production and consumption of popular music in South Korea has been influenced by various social, political, cultural and technological shifts. It also suggests that the rise of the Internet has significantly changed the nature of the music industry in South Korea, specifically the production and consumption of popular music. The rise of independent music in the late 1990s, and its re-emergence in the late 2000s, are also discussed.

Chapter 7 This chapter presents research findings from interviews with consumers of independent music in South Korea. The first section shows the various ways these music consumers consume and experience music. These consumption activities are categorized according to information-processing and experiential approaches. Next, the chapter suggests that the consumers share two attitudes, fear and responsibility, which lead them to contribute to the continuity of independent music. Their fear relates to their desire to minimize inappropriateness of the indie music and culture and their responsibility to maximizing their appropriateness. Then, the chapter identifies the different ways music consumers use the digital communications media. Finally, it demonstrates how communities or projects relating to independent music are organized and how they integrate the resources of the participants.

Chapter 8 This chapter presents the analysis of interviews with independent record labels in South Korea. It demonstrates the impacts of the Internet and new media on the labels. Firstly, it describes the record labels’ motives for using the new media. Secondly, it explains the strategies they apply in using it. They are found to follow four value (co)creation strategies in order to promote their music, interact with their consumers and learn from them. Finally, the chapter discusses the difficulties the labels face in using these strategies.

Chapter 9 This chapter, firstly, briefly reviews the literature review chapters and, then, discusses the implications of the research findings. The discussion section is divided into three themes: the symbolic consumption of music, co-creative consumption community, and the consumers’ sharing system and co-creative strategy.

Chapter 10 This chapter first revisits the research aims and discusses to what extent they have been achieved. Second, the chapter explains the limitations of the study. Third, it discusses implications for theory and practice. Finally, possible future research opportunities are suggested.

Chapter 2. Value Creation and Co-Creation

2.1. Introduction

The perceptions of how we should define marketing, value and value creation have changed from a firm-centric to a consumer-centric view, which suggests a value co- creation paradigm. Marketing used to be considered as activities performed by firms to deliver value to consumers. Consumers were depicted as value receivers and located at the end of the value chain of firms. However, the old perspective was soon challenged by a new view arguing that the traditional view was insufficient to explain what marketing is, what the value of goods or services is and how value is created.

The new perspective of value co-creation suggests that value is not just embedded in commodities produced by firms; rather, value is co-created through relationships and interactions between consumers and producers. This also requires a re-evaluation of consumption activities and consumers’ experience of consumption. The demand for an understanding of value co-creation and the consumption experience has been accelerated by the development of the Internet and social media. These new technologies offer producers the chance to interact with their consumers effectively and easily. In addition, the digital space has made it possible for ordinary people to be connected with each other in order to share their consumption experiences. This chapter will discuss these changes in the views on marketing and value creation. In addition, it will show why the value co-creation paradigm is appropriate for examining and explaining how value is created in this age.

Firstly, the chapter will discuss our traditional perceptions of what marketing is, what value is, and how value is created. This section will argue that the exchange paradigm of value was the core concept of marketing in the past. However, the section will argue that this concept is very limited in terms of its ability to explain what marketing is and how value is created. Due to this incompleteness, the subsequent section will show how our views on marketing have moved from one of value exchange to one of value creation. It will discuss the advantages the value creation paradigm has over the exchange paradigm. It will also discuss services

21 marketing, emphasizing the interactive and relational aspects of value creation and the importance of consumption. It will show how the early discussion of service and the new perspective on value creation changed our perceptions of value and value creation, and eventually led to the development of the new paradigm known as value co-creation.

The S-D logic of marketing that is replacing the goods-dominant (G-D) view emphasizes that value is co-created with consumers. This section of the chapter will show how S-D logic differs from G-D logic, and will discuss the former’s implications for marketing. In addition, it will explain how the development of the Internet and social media encourages the participation of consumers and enables firms to have relationships and interactions with them. In addition, rather than only focusing on the type of value co-creation where consumers participate within the setting of the company, this chapter will also discuss literature that focuses on value creation in the consumer sphere. To show how consumers consume, two research topics – consumer culture theory (CCT) and research into consumption communities – will be discussed.

2.2. The Transition of Value and Value Creation

2.2.1. Goods-Dominant (G-D) Logic: The Traditional Perspective on Marketing, Value and Value Creation

The definition and understanding of marketing has focused on the concept of exchange for many years (Vargo and Lusch, 2004a). Adam Smith defines value-in- exchange “as the power of purchasing other goods” (Ng and Smith, 2012, p. 213). The exchange paradigm was championed when the first revision of the definition of marketing by the American Marketing Association (AMA) made the term ‘exchange’ a central concept of marketing (Sheth and Uslay, 2007). The first revised version of the initial definition of marketing, released in 1985, stated that “marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives” (Keefe, 2008). Since then, this has been one of the

22 core concepts used to explain and understand marketing. Anderson et al. note that “the act of exchange is the consummation and confirmation of the marketing process, and brings the marketing concept to life” (1999, p. 9) and Bagozzi asserts that “exchange is a central concept in marketing and it may well serve as the foundation for that elusive ‘general theory of marketing’” (1975, p. 39). Bagozzi (1975) suggests three different types and three correspondingly different meanings of exchange (see Table 2.1).

Table 2. 1. The types of exchange Type Definition Restricted Two-party reciprocal relationships A↔B Exchange Generalized At least three actors’ univocal and reciprocal A→B→C→A Exchange relationships Complex A system of mutual relationships between at A↔B↔C Exchange least three parties Source: Bagozzi, 1975

It has been suggested that the meanings of exchange can be categorized into the utilitarian, symbolic and mixed types. According to Bagozzi, a utilitarian exchange, firstly, can be “referred to as an economic exchange” and is “built on the foundation of economic man” (1975, p. 36). Secondly, “symbolic exchange refers to the mutual transfer of psychological, social, or other intangible entities between two or more parties” (Bagozzi, 1975, p. 36). According to Levy, “people buy things not only for what they can do, but also for what they mean … symbol is a general term for all instances where experience is mediated rather than direct” (1959, pp. 118-119; emphasis in original). Lastly, it is a mixed exchange where both utilitarian and symbolic aspects are involved (Bagozzi, 1975) as people endeavour to obtain both economic and symbolic satisfaction. From Bagozzi’s categorizations of the types and meanings of exchange, exchange does not only refer to a dyadic and one-way relationship of a utilitarian nature. It also includes interactive relationships, and the involvement of symbolic satisfaction. However, the traditional marketing concept denoted the short-term transaction or exchange of value. In addition, Bagozzi offers a more detailed explanation of exchange but fails to show why and how value is created (Payne and Holt, 2001).

In the traditional perspective, marketing is seen as an activity done by a firm. The focus is therefore on marketing management: as Lusch points out, “marketing was about organizations marketing to customers” (2007, p. 261). This is related to the traditional view of the value chain as a within-firm activity (Porter, 2004). The value chain was widely believed to be managed and controlled by a firm in such a way as to produce and deliver value to consumers. The conventional perspective is that consumers are located at the end of the value chain and do not have any role to play in the value creation process itself (Normann and Ramirez, 1993; Prahalad and Ramaswamy, 2002). This is a supplier-centric concept (Gummesson, 2007). Information flow has largely been managed and controlled by a firm or the sellers of its products and has been considered part of its competitive advantage over its competitors (Evans and Wurster, 1997). Evans and Wurster explain the traditional economics of information as a trade-off between richness and reach. When information can be dispersed widely to reach broader consumer groups, richness of information is not achievable, and vice versa.

The assumption behind traditional marketing and value creation is that “firms can act autonomously in designing products, developing production processes, crafting marketing messages, and controlling sales channels with little or no interference from or interaction with consumers” (Prahalad and Ramaswamy, 2004, p. 6). Consumers who do not have enough sources of information regarding a product or service they are considering purchasing have tended to be forced to rely on sales experts or the information generated by the corporation selling the product or service. Using the industrial economy model, firms aim to reduce their costs of production and increase their internal efficiency (Prahalad and Ramaswamy, 2002). Firms operating in such conditions are able to produce goods for the mass market with the lowest possible prices, aimed at attracting more consumers (Kotler et al., 2010) and “the customers are themselves the target for corporate information and persuasion” (Wikström, 1996, p. 359).

According to Ng and Smith, “the notion of producing goods with exchange value has therefore made manufacturing the stalwart of economic life since the start of the industrial era” (2012, pp. 213-214). Vargo and Lusch (2004a), who suggest a new

24 perspective on marketing, S-D logic, argue that the traditional form of marketing largely focuses on operand resources, such as natural resources, and considers value to be something belonging to goods. The primary goal for a firm has been to increase its efficiency in order to produce and deliver standardized goods and maximize profits without paying much attention to consumer needs. This is a one-way process that delivers a produced good to consumers, rather than asking about the needs and wants of those consumers. Vargo and Lusch (2004a, p. 5) summarize G-D logic as follows:  The purpose of economic activity is to make and distribute things that can be sold.  To be sold, these things must be embedded with utility and value during the production and distribution processes and must offer to the consumer superior value in relation to competitors’ offerings.  The firm should set all decision variables at a level that enables it to maximize the profit from the sale of output.  For both maximum production control and efficiency, the good should be standardized and produced away from the market.  The good can then be inventoried until it is demanded and then delivered to the consumer at a profit.

The traditional marketing and economic concept in terms of consumption and value delivery between suppliers and receivers was inherited from the concept of value-in- exchange and goods-based marketing models (Grönroos, 2006b; Vargo and Lusch, 2004a). In the exchange paradigm, the goal of a company is to make a consumer buy its product, and retaining the current customers is not typically a big concern in such circumstances. However, in the current business environment, retaining the current customer is regarded as equally important as creating new customers (Grönroos, 2007). In addition, classic marketing mixes, such as the 4Ps (product, price, place and promotion), have been questioned in terms of their credibility and validity in dealing with marketing matters, as they are supplier-centric and put the customer needs second (Day and Montogmery, 1999; Gummesson, 2007). Furthermore, Grönroos (1994) criticizes marketing under the traditional framework as managing the toolbox of the marketing mix rather than understanding a firm’s market

25 relationships and customers’ needs. Thus, it fails to see that “marketing is a social process” (Grönroos, 1994, p. 14).

Diversified choices of goods and services, the individualism of modern society and rapid technological and social change have begun to require diverse ways of satisfying needs and demands (Day and Montgomery, 1999). Webster (1992), who examines the evolution of the organizational form from hierarchical and bureaucratic to flexible types such as networks and partnerships, asserts that the marketing function should be re-evaluated in the new forms of organizations that are emerging. According to Webster, “the focus shifts from products and firms as units of analysis to people, organizations, and the social processes that bind actors together in ongoing relationships” (1992, p. 10). Therefore, businesses should devote themselves to developing long-term relationships with customers, in order to communicate with them effectively and determine their needs, which can be critical resources for firms. Webster further argues that “these new responsibilities and tasks cannot be well understood by using only the traditional profit-maximizing optimization framework that has been the core of marketing theory for the past four decades” (1992, p. 12).

In a similar manner, Duncan and Moriarty (1998) suggest a communication-based model as a foundation for customer-focused marketing and argue that establishing a strong relationship with the consumer is important. To establish valuable relationships with consumers, communication is essential. They state that “communication is the human activity that links people together and creates relationships. It is at the heart of meaning-making activities” (1998, p. 2). Rust et al. (2010) point out that traditional mass marketing is no longer effective. They argue that companies should cultivate customers with whom they can create long-term relationships and offer them lifetime value; technological advancements mean that a company can now interact with its customers, gather rich data about them, and sustain long-term relationships with them.

In the marketing discipline, various suggestions have called for a new paradigm to include interactive and consumer-centric perspectives. This requirement has made the traditional marketing concept obsolete (Day and Montgomery, 1999). After the

26 popularity of functional ideas about marketing had faded away, suggestions such as service marketing, which called for breaking free from product marketing, began to emerge (Shostack, 1977; Vargo and Lusch, 2004a). Vargo and Lusch note that “marketing has shifted much of its dominant logic away from the exchange of tangible goods and toward the exchange of intangible, specialized skills and knowledge, and processes” (2004a, pp. 1-2). This also suggests that we need a new perspective on value creation, since the emerging paradigm of value creation is embedded in personal experience where value is co-created with service providers and beneficiaries (Prahalad, 2004; Vargo and Lusch, 2004a).

2.2.2. The Transition from the Exchange Paradigm to Value Creation

In 2004, the AMA announced a newly revised definition of marketing: “Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders” (Keefe, 2008). In this new definition, the term exchange has disappeared. The definition focuses on the “processes for creating, communicating, and delivering value to customers”. Sheth and Uslay (2007) point out that the new definition shows a change in the focus of marketing from the exchange paradigm to the value creation paradigm. They argue that the exchange paradigm can be examined through outcomes since the activity of exchange takes place in order to achieve desired outcomes and the framework for examining an exchange must therefore look at whether the exchange achieves the sought-after satisfaction.

They suggest that the exchange paradigm is not sufficient to explain the complex human interactions in society and offer the value creation paradigm as a replacement. According to them, the value creation paradigm has several advantages over the exchange paradigm. First of all, the exchange paradigm is too narrow as it cannot explain value creation beyond the simple notion of buyer and seller, while value creation can explain other concepts, such as value-in-use, which Adam Smith describes as “the utility of some particular object” (Ng and Smith, 2012, p. 213). Secondly, through the value creation perspective, structural holes between producers

27 and consumers can be filled, and the distorted view of marketing as a short-term practice, for example “deceptive, covert practices as the solution to make the numbers” (Sheth and Uslay, 2007, p. 304), can be altered as the value creation paradigm encourages long-term orientation. Thirdly, value creation is based on personal experiences and thus can expedite “the innovation rate, variety, and experience quality of marketing” (2007, p. 304). The fourth advantage relates to the way in which marketing and economic thoughts have been dominated by the utilitarian approach and the exchange paradigm has been dominated by the questions of “how” and “what” over “why”. However, the question of “why” is important for the notion of value creation as ‘the answer can reveal alternative solutions to customer problems and boost value considerably” (2007, p. 304). Fifth, as society is increasingly dominated by a service-based economy, ownership and possession, which used to be emphasized in the exchange paradigm, will become less important and the value creation paradigm will be able to accelerate the creation of new solutions. Finally, in the past there has been information asymmetry between firms and consumers. However the value creation perspective is based on dialogue, access and transparency (Prahalad and Ramaswamy, 2004). Therefore, both consumers and managers would be involved in responsible problem solving, and social responsibility would be outsourced to the individual; we can already see this starting to happen as consumers become more informed and active.

The transition of marketing thought away from its goods-based form has followed the rise of scholars who see the importance of services in society and business. This can be identified in past research. For instance, Shostack asserts that “the classic marketing ‘mix’, the seminal literature, and the language of marketing all derive from the manufacture of physical goods” (1977, p. 73). In addition, the Nordic School of services marketing argues that, based on the traditional marketing concept, there is no room for interaction and integration with the consumption process. Therefore, marketers experience the lack of understanding about consumption (Grönroos, 2006a). Prahalad (2004) also argues that traditional value creation is based on an exchange of goods between producers and consumers and claims that a new logic revolving around value creation, which is different from the industrial paradigm, is emerging (see Table 2.2).

Table 2. 2. The competing frames of value creation Traditional Assumptions of Value New Assumptions of Experience-Based Creation Value 1. Value is exchanged between the 1. Value is created at the point of firm and a customer. Value is exchange. created by the firm. 2. Value is co-created by the 2. Value is embedded in products consumer and the firm. and services (therefore 3. Value is embedded in experiences: innovation is about products products and services are carriers. and services). 4. Experience fulfilment webs are not 3. The value chain represents the sequential or linear value chains. value creation process. 5. Innovation is about experiences; 4. Innovation is about technologies/products/processes technologies, products, and are critical but not the goal. processes. 6. Customers make the key decision 5. Customers have a choice of and the associated tradeoffs. whether to “buy” or “not buy” and managers are there to persuade them. Source: Prahalad, 2004, p. 173

This pioneering movement has occurred in different parts of the world, including the US. Northern Europe has been a centre for it (Gummesson and Grönroos, 2012). Gummesson and Grönroos mention that “the Nordic School has attempted to expand service marketing in the direction of relationships networks and interaction taking marketing beyond the one-function approach manifested in the marketing mix and its 4Ps toolkit” (2012, p. 492). They define three different periods of marketing paradigms:

 pre-1970s: the goods paradigm  1970s–2000s: the services versus goods paradigm with a focus on differences  2000s–present: the service paradigm, based on goods/services integration and interdependency.

Until the 1970s, there was limited research output dealing with services marketing and it was scarcely even accepted as a research field from the traditional marketing perspective (Gummesson, 2007). However, from the 1970s, a challenge to goods- based marketing emerged via the introduction of services. From then, the research

29 initially focused on classifying the differences between services and goods marketing. The problem with that approach is that services are generally defined based on what goods are not (Gummesson, 2007). This is still based on the outdated categorization of all non-manufacturing sectors as belonging to the service sector (Grönroos, 2007).

Grönroos (2007) argues that this is misleading for two critical reasons: Firstly, “it neglects the hidden services of manufacturers and agriculture”, and secondly, “it views services as a ‘sector’ of the economy, not as a business logic and a perspective on how to create a competitive advantage” (p. 2). Due to the lack of credibility and irrelevance of differentiating between goods and services, the integration of goods/services recently emerged as a new field (Grönroos, 2007; Gummesson and Grönroos, 2012). The business environment has also moved from focusing on producing outputs to emphasizing the importance of service (Vargo and Lusch, 2008a). Gummesson and Grönroos point out the importance of the move: “In the 2000s, we are progressing towards a new science (or logic) of services as value creation, abandoning the production-centric goods manufacturing versus a service sector divide” (2012, p. 490).

Through the constant efforts of researchers in services marketing, an understanding about interaction, relationships and networks was developed and consumers are now regarded as active co-producers. Services marketing does not view one-off exchange as the core of marketing. Rather, it emphasizes relationships to facilitate continuous exchanges between producers and customers (Grönroos, 2007). There is a considerable difference, in terms of the goal of marketing, between the exchange paradigm and the relationship paradigm. In the exchange paradigm “the focus of marketing is to effectively distribute or deliver a preproduced value to customers” (Grönroos, 2007, p. 27) but in the relationship paradigm “the focus of marketing is value creation, or value formation, rather than value distribution, and the facilitation and support of a value-creating process rather than simply distributing ready-made value to customers” (p. 28). According to Grönroos (2007), the two paradigms also offer other differences in terms of the approach and content of marketing, as explained in Table 2.3.

Table 2. 3. Inherent values in relationship and exchange marketing Exchange Perspective Relationship Perspective Customers are seen as someone the Cooperation is required to create the marketer does something to, instead of value that the customer is looking for. does something for. Customers and suppliers or service Customers, as unidentified members of a providers are not totally isolated from segment, are exposed to a number of each other. The choice of that to buy in a competing products, and they are relationship depends to some extent on supposed to make independent choices mutual influences in the interactions. from among the available options. There is an interdependence between the two parties. Customers are seen instead as a resource Customers are seen as an antagonist who together with whom the firm can create a has to be persuaded to choose a valued solution that fulfils the customer’s particular option. needs and solves his problems. Source: Grönroos, 2007, p. 28-29

In a situation where goods render services and services render services (Lovelock and Gummesson, 2004), the focus of service research, according to Edvardsson et al. (2005), has moved from differentiating between goods and services to the “differences in how we want to portray value creation with customers (and other stakeholders) where the customer’s perspective is emphasized” (p. 118). In this sense, “service is a perspective on value creation rather than a category of market offerings” (Edvardsson et al., 2005, p. 118). Meanwhile, Grönroos (2007) asserts that an understanding is required about the different logics of business and marketing, namely services and goods logics (see Table 2.4). Therefore, services marketing is looking at services from the customers’ perspective (Edvardsson et al., 2005), where it is important to “support customers in a value-creating way” (Grönroos, 2006a, p. 323). Meanwhile, the activities of consumption are regarded as important value- creating activities (Grönroos, 2006a).

Table 2. 4. Services logic versus goods logic Service logic Goods logic Value-supporting process. Value-supporting Nature of the offering resource. A process where a set of A resource which the resources interact with customers use, possibly customers, aimed at together with other Perspective supporting their processes resources, with the in a value-creating way. purpose of creating value for themselves. To facilitate processes that To make goods as Business logic support customers’ value resources available to creation. customers for their use. Co-producer and co- Sole creator of value. Customer’s role creator of value. Provide a service process Provide customers with and co-produce and co- goods as a resource and Firm’s role create value in customers’ sole producer of this consumption process. resource. Source: Grönroos, 2007, p. 56

The important contribution of the Nordic School is that it introduced a new perspective from which to look at marketing and services. In addition, it offered a fresh view on the role of consumers and their consumption activities. Gummesson and Grönroos emphasize the contribution of the Nordic School as follows: “Its starting point is service as a phenomenon in its marketing context. When mainstream research asks how service fit into existing marketing models, Nordic school research asks how concepts and models that support the understanding of service marketing should look like” (2012, p. 491). Therefore, unlike the traditional approach, in which a corporation targets consumers or markets to gain profits, the Nordic School approach is to cultivate an understanding about consumers and markets (Gummesson, 2002).

The early services marketing research identified the following characteristics of services that differentiate them from goods: intangibility, heterogeneity, inseparability and perishability (IHIPs) (Gummesson, 2007; Lovelock and Gummesson, 2004; Zeithaml et al., 1985; Vargo and Lusch, 2004b). The discussion of why the characteristics of the IHIPs are inaccurate, and contradict the market and consumers, and what the inverted implications are, is summarized in Table 2.5.

Table 2. 5. Limitations and implications of distinguishing characteristics of services Dimension Dispelling the Myth Perspective Inverted implication Intangibility Services lack the Services often have The focus on Unless tangibility tactile quality of tangible results. manufactured output has a marketing goods. Tangible goods are is myopic and advantage, it should often purchased for goods-oriented. be reduced or intangible benefits. Consumers buy eliminated if Tangibility can be a service even when a possible. limiting factor in tangible product is distribution. involved. Intangibles such as brand image are more important. Heterogeneity Unlike goods, Tangible goods are Homogeneity in The normative services cannot be often heterogeneous. production is viewed marketing goal standardized. Many services are heterogeneously in should be relatively consumption. customization rather standardized. than standardization. Inseparability Unlike goods, The consumer is Only manufacturing The normative services are always involved in benefits from marketing goal simultaneously the “production” of efficiency of should be to produced and value. separability. maximize consumer consumed. Separability limits involvement in value marketability. creation. Perishability Services cannot be Tangible goods are Value is created at The normative goal produced ahead of perishable. the point of of the enterprise time and Many services result consumption, not in should be to reduce inventoried. in long-lasting the factory. inventory and benefits. maximize service Both tangible and flows. intangible capabilities can be inventoried. Inventory represents an additional marketing cost. Source: Vargo and Lusch, 2004b, p. 327

In articles by Lovelock and Gummesson (2004) and Vargo and Lusch (2004b), the authors question the validity of the four characteristics of services that have been the focus of the discussion of services marketing and argue that they are not universally applicable for explaining what a service is or is not and the differences between goods and services. A survey of eleven leading services research scholars also confirms that IHIPs are not regarded as a valuable tool for defining services and

33 questions their validity and relevance (Edvardsson et al., 2005). Arguing that services marketing is no longer regarded as a niche case of marketing, Lovelock and Gummesson call for a new paradigm, and that “services marketing and goods marketing should be reunited under a service banner” (2004, p. 37), which, they note, would be consistent with the S-D logic of Vargo and Lusch (2004a).

Along with Lovelock and Gummesson (2004), Vargo and Lusch (2004b) also argue that services marketing is based on the traditional marketing thought of the goods- based model, despite the tremendous efforts made by various academics in services marketing. Vargo and Lusch (2004b) point out that what is required is not that services marketing breaks free from goods marketing rather that all marketing breaks free from the traditional marketing concept based on manufactured goods and the exchange of output. They further argue that services are still regarded as what goods are not, and warn that “attempting to define service by contradistinction from tangible goods both prohibits a full understanding of the richness of the role of service in exchange and limits a full understanding of the role of tangible goods” (2004b, p. 326).

2.3. Service-Dominant Logic and Value as Consumers’ Creation

2.3.1. The Development of Service-Dominant Logic and Value Co- Creation

In 2007, the AMA once again proposed a new definition: “marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large” (Keefe, 2008). In this definition, the critical issue is that marketing is no longer seen as an activity limited to within an organization, which had been one of the central criticisms of the previous 2004 definition (Gundlach and Wilkie, 2009). Instead, the new definition indicates marketing’s impact on society and how it is performed by diverse actors in a market, including consumers. Michael A. Lotti, Chairperson of the AMA Board, celebrated the new definition, declaring that it “is

34 not a definition of marketing management, it’s a definition of marketing” (Keefe, 2008, p. 29).

According to Sheth and Uslay (2007), the new definition encompasses the exchange and value creation paradigm; they claim that the future of marketing will be defined as value co-creation. Grönroos (2006b) remarks that the introduction of the new definition in 2004 shows that interaction has become an important concept in marketing, making the co-creation of value possible. Lusch (2007) indicates that we are entering a new era, characterizing the history of marketing philosophy as follows: “To market” means that the primary mission of marketing is taking things to market, “market(ing) to” means that the primary mission of marketing is identifying customers and marketing to them, and “market(ing) with” means that the primary mission of marketing is collaborating with customers to cocreate value.”

From the emerging new perspectives on marketing and the changes in the perceptions of value creation, a new concept was developed by Vargo and Lusch in 2004a, called the S-D logic. Their article attracted international attention and initiated research on marketing based on the alternative view (Gummesson, 2007; Gummesson and Grönroos, 2012). Vargo and Lusch assert that “marketing has moved from a goods-dominant view, in which tangible output and discrete transaction were central, to a service-dominant view, in which intangibility, exchange processes, and relationships are central” (2004a, p. 2). Despite the emergence of the new marketing perspective, there have been misunderstandings about the new concept of marketing. In a later work, Vargo and Lusch mention that “academic marketing continues to point firms toward producing services instead of producing goods, rather than providing service. It continues to suggest that all that is needed is a change in the unit of output from the tangible to the intangible” (2008a, p. 256).

The S-D view emphasizes the importance of intangible resources, relational aspects and value co-creation. According to Vargo and Lusch (2004a, p. 5), the service- centred view comprises the following:  Identify or develop core competences, the fundamental knowledge and skills of an economic entity that represent potential competitive advantage.  Identify other entities (potential customers) that could benefit from these competences.  Cultivate relationships that involve the customers in developing customized, competitively compelling value propositions to meet specific needs.  Gauge marketplace feedback by analysing financial performance from exchange to learn how to improve the firm’s offering to customers and improve firm performance.

Marketing is no longer understood as a mere activity used to maximize a firm’s profitability and efficiency by delivering products to customers. Rather, it is regarded as “a continuous series of social and economic processes that is largely focused on operant resources with which the firm is constantly striving to make better value propositions than its competitors” (Vargo and Lusch, 2004a, p. 5). The view of differentiating between goods and services is no longer applicable as “goods are distribution mechanisms for service provision” (Vargo and Lusch, 2004a, p. 8) and “people exchange to acquire the benefits of specialized competences (knowledge or skills) or services” (p. 7). In this new concept, “service is defined as the application of competence (knowledge and skills) for the benefit of another party” (Vargo and Lusch, 2008a, p. 256) and “the term service is used as synonymous with value” (Gummesson, 2007, p. 117). Gummesson and Grönroos point out that the contribution of S-D logic lies in “dissolving the good/service divide” (2012, p. 482), while Gummesson remarks, “the service-dominant logic suggests service (in the singular) as the core concept replacing both goods and services” (2007, p. 117). Unlike the traditional view that value is embedded in a product, the new view is that value is always co-created with customers (Vargo and Lusch, 2004a). According to Vargo and Lusch, “the customer becomes primarily an operant resource (coproducer) rather than an operand resource (“target”) and can be involved in the entire value and service chain in acting on operand resources” (2004a, p. 11). In G-D

36 logic, service is regarded as units of outputs and the focus is on its exchange value but in S-D logic service is considered to be a process and its use-value is emphasized (Ng and Smith, 2012; Vargo and Lusch, 2008a).

Traditional assumptions of value creation and the role of producers and consumers have been challenged by the new perspectives on marketing practice (Prahalad and Ramasawmy, 2000, 2004) and the new marketing logic (Vargo and Lusch, 2004a, 2008b) that value of goods is not created solely by producers in the market, but is co- created by the consumers of products and services (Zwick et al., 2008). This challenges the idea of a distinctive demarcation between producers and consumers (Vargo and Lusch, 2004a; Prahalad and Ramaswamy, 2000). The value chain in a firm, which had previously been described as a linear process, is now seen as networked and distributed to other parties (Achrol and Kotler, 1999; Lusch et al., 2010). The theory of value co-creation with consumers suggests that direct dialogue and interaction with the consumer is critical. Moreover, customization, through which consumers can choose between different options of a product that have been pre-selected by the firm, is no longer enough in this age; instead, consumers want to co-create according to their needs and experiences (Prahalad and Ramaswamy, 2000, 2002, 2004).

The distinction between producers and consumers is eliminated. Value, in these circumstances, is co-created with diverse actors who are all resource integrators (Vargo and Lusch, 2004a, 2008b). It can thus be said to be actor-to-actor, and these actors and their relationships define unique contexts (value-in-context) (Chandler and Vargo, 2011; Vargo and Lusch, 2011). Lusch et al. (2010) argue that, in the value network with other suppliers or consumers, a firm needs to learn to provide value propositions that can constantly satisfy customer needs in a networked economy, as “value is not obtained in the economic exchange of market offerings but rather through their use and within a context” (Lusch et al., 2010, p. 21).

2.3.2. Value Co-Creation in the Digital Age

We are now witnessing the age of consumer participation and user creativity. For example, the car manufacturing company, General Motors, has taken advantage of social media recently, using a blog to communicate and interact with consumers and promote its latest model (Li and Bernoff, 2008). Advanced technologies now encourage consumers to enter into dialogue with corporations or other consumer groups. Evans and Wurster (1997) point out that with the rise of the Internet, information flows freely and is thus no longer wholly controlled by firms. As such, firms should regard consumers as co-creators of value (Prahalad and Ramaswamy, 2000, 2002, 2004). Unlike the traditional model of value creation, which can be described as information asymmetry, the current rise of the Internet suggests “the age of information democracy” (Sawhney and Kotler, 2001, p. 386; emphasis in original). According to Normann, “they (customers) are no longer anonymous markets and receivers/sinks. And the critical competence moves from production competence to relationship competence” (2001, p. 23; emphasis in original).

The rise of social media forms and business models has accelerated the participation of consumers (Wirtz et al., 2010). In the digital space, due to its open characteristics, information is shared and distributed in a way that could not have been imagined previously, when information was governed within the firm and processed through the value chain (Evans and Wurster, 1997). The development of information technology means that a corporation is able to interact with its consumers and increase the effectiveness of its consumer relations management, which can lead to improved credibility of the corporation and thereby to further success or sustainability (Bernoff and Schadler, 2010; Grönroos, 2007; Wikstrom, 1996). Normann (2001) also acknowledges the importance of managing consumer relationships. The view is that managing consumer relationships can be a source of financial returns and, more critically, that all business starts with communication with the consumers. Gummesson (2002) also points out that the rise of information technology has enabled firms to have electronic relationships (e-relationships) along with human relationships (h-relationships). However, he continues, this does not mean we can completely ignore the h-relationships; rather, we must integrate both as “the more tech, the more need for touch” (2002, p. 49).

Social media, specifically, and the Internet, more broadly, can therefore be a means of listening to and understanding consumers’ issues and needs. For instance, musician Dave Carroll, whose guitar was broken during a flight with United Airlines, used social media to complain about the company when it failed to deal with the problem. He created a song and a cheap music video to express his humiliation by and frustration with United Airlines (Bernoff and Schadler, 2010). The music video became a phenomenon on YouTube, viewed by more than 900 million users. Thus, in a world where negative publicity is so easily disseminated, developing strategies and managing communication with consumers has become critical. By failing to make an effort to remain in constant dialogue with its consumers, any corporation is liable to face serious problems. On the other hand, a company that can manage this communication effectively through both electronic and human relationships will be able to co-create extra value with its consumers, whether this is related to products or services.

Modern technologies and consumers’ use of them offer an entirely different perspective on marketing and the value creation process. The direct communication and interaction, and the offering of personalized experiences, as explained by co- creation theory (Prahalad and Ramaswamy, 2000), can be a way for a corporation to learn about the social, economic and cultural aspects of its markets and consumers, which can give it a competitive advantage (Vargo and Lusch, 2004a). According to Wikström, “In order to exploit the consumers’ knowledge, experience, expectations, wants and needs, and to get some insight into their priorities, their visions and their way of living, there has to be some sort of interaction. And as the consumers become part of the value-creating activities, their specific brands of knowledge will be available on a continuing, day-to-day basis. At the same time, the company possesses knowledge which can be of value to the consumers in their own value- creating process. From this interaction, a mutual learning process is born” (1996, pp. 360-361).

Through the learning process, a firm may be able to gain social knowledge (Sawhney et al., 2005) which can replace or complement traditional value creation.

According to Chandler and Vargo (2011), the relationship between an actor and a context is interdependent and relationships between actors can be direct or indirect. Resource integration with another actor is dependent on the context of the actor. As resources are exchanging continually between actors, context itself is continually varying and so are markets. The actor-to-actor concept, therefore, is dynamic and networked (Vargo and Lusch, 2011). Chandler and Vargo argue that “context is an important dimension of value co-creation because it frames exchange, service, and the potentiality of resources from the unique perspective of each other, and from the unique omniscient perspective of the entire service ecosystem” (p. 45). Broader perspectives on value creation, and emphasis on actor-to-actor relationships, shed light on the theory of the market (Vargo and Lusch, 2011). The limited understanding of markets suggests that “the market is everywhere and nowhere in marketing” (Venkatesh et al., 2006). Vargo and Lusch (2011) argue that the theory of the market will be able to show the systematic and dynamic nature of value creation in society and bridge the fragmented views in marketing.

The contextual nature of value co-creation has been enhanced by the rise of social media forms (Lusch et al., 2010). Consumers who communicate and share information with other consumers are now regarded as a “new source of competence for the corporation” (Parahalad and Ramaswamy, 2000, p. 80). The convergence of industries and technologies is shifting the traditional boundaries of products and services (Prahalad and Ramaswamy, 2003). Networked technologies and active consumers enable the co-creation of experiences and value between firms and consumers (Lusch et al., 2010; Prahalad, 2004; Prahalad and Ramaswamy, 2003; Ramaswamy, 2011), which can “accommodate a wide range of individual context- and-time-specific needs and preferences” (Prahalad and Ramaswamy, 2003, p. 15). For instance, people obtain and share health care related information on the Internet (Prahalad and Ramawamy, 2002), and collaboration between health care providers and patients is important to have innovative health care services (Nambisan and Nambisan, 2009; McColl-Kennedy et al., 2012). In addition, studies of collaborative innovation with consumers have shown that companies develop VCEs (virtual customer environments) to allow customers to express their creativity and

40 commitment for companies. By allowing customers to participate, companies gain benefits in new product development, testing existing products, and product support activities (Nambisan, 2002; Nambisan and Baron, 2009, 2010).

By engaging in such activities, a firm can gain the flexibility needed to adapt to the changing business environment, and customers’ knowledge and skills thus become valuable resources for it (Prahalad and Ramaswamy, 2000). This is a market that acts as a forum in which diverse actors participate to co-create human experience (Ramaswamy, 2011). The notion of co-creation offers an “understanding of markets as socially constructed configurations” (Vargo, 2011, p. 220). This might suggest a concept of ‘value-in-social-context’ (Edvardsson et al., 2011). Edvardsson et al. suggest that “value is not only determined by individual perceptions of value-in-use, but also by wider social perceptions” (2011, p. 334). From this perspective, “value has a collective and intersubjective dimension” (2011, p. 333).

Consumers can now overcome constraints in terms of space and time, and can form communities to interact with each other (Kozinets, 1999). It is not uncommon now to see co-creation playing an important role, not only among business partners but between producers and consumers. In these circumstances, value creation is not governed by a firm; rather, it needs to be seen as a collective work, whose stakeholders include diverse businesses and consumers (Frow and Payne, 2011; Layton, 2007, 2011; Lusch and Webster, 2011). Value creation, therefore, is not a revolutionary process but an evolutionary craft working (Frow and Payne, 2011).

2.3.3. Value as Consumers’ Creation

Holbrook defines customer value as “an interactive relativistic preference experience” (2006, p. 212). This definition implies that value is phenomenological and that customers become active value co-creators by experiencing goods or services, as “a company’s offering, be it intangible, tangible or a combination of the two, is merely value unrealised” (Ng and Smith, 2012, p. 225). The latter authors note that S-D logic has adopted the notion by characterizing customers as value co- creators who realize value-in-use rather than as value co-producers which requires

41 the customer’s involvement in creating the company’s offering. This view certainly shows that there are different value creation spaces. For example, one is the company’s and another is the customer’s (Grönroos and Voima, 2013).

As was briefly mentioned in Section 2.1.2, in services marketing, consumption activities are regarded as important value-creating processes (Edvardsson et al., 2005; Grönroos, 2006a, 2007). Based on that view, recent articles point out that one limitation of S-D logic is that it still emphasizes that firms have a leading role over customers in the value-creating process. Thus, customers need to be invited by a firm to co-create value, and the view overlooks consumers’ own value-creating activities in their own sphere, whether physical, emotional, mental, individual or social (Grönroos, 2011; Grönroos and Voima, 2013; Heinonen et al., 2010; Helkkula et al., 2012; Schembri, 2006). In addition, Schembri (2006) argues that S-D logic’s premise that the customer is always a co-creator of value is based on the situation where the customer should be active participants for organizations. For Schembri, this situation enforces customers as service recipients.

The processes of consumption include not only during-consumption activities but also those that occur before and after consumption (Grönroos, 2007). Value is constructed by past, current and imaginary future experiences (Helkkula et al., 2012). This not only involves interactions between a customer and a good or a service, but also the customer’s personal interests, ongoing life and ever-changing contexts beyond their interactions with a service provider (Heinonen et al., 2010; Helkkula et al., 2012).

The service perspective on business argues that it is not always possible to co-create value with customers. Instead, it may be said that a service provider can have the chance to co-create value with its customers. It is always the case that customers can be active or passive, and their activities can have either positive (value-creating) or negative (value-destroying) impacts (Grönroos, 2011; Grönroos and Voima, 2013). In addition, under the value-in-use perspective, “value is created by the user for the user” and “the customer as the user and integrator of resources is a value creator” (Grönroos, 2011, p. 288). Besides these suggestions for filling the gap in S-D logic,

S-D logic itself also acknowledges the gap by characterizing the transition from a goods focus to a services focus (Vargo and Lusch, 2008a) as follows: “From thinking about the purpose of firm activity as making something (goods or services) to a process of assisting customers in their own value-creation processes...from thinking of customers as isolated entities to understanding them in the context of their own networks...from thinking of consumers as targets to thinking of customers as resources” (p. 258; emphasis in original).

In the perspective of value creation by customers, that value is realized and fulfilled by actual usage and experience, while a firm’s role is value facilitation, and the goal of marketing is to support the value creation of customers (Grönroos, 2011; Grönroos and Ravald, 2011).

The view that stresses the value creation of customers emphasizes the importance of interaction as it argues that value co-creation can only occur through interaction (Grönroos, 2011; Grönroos and Ravald, 2011; Grönroos and Voima, 2013). Ballantyne and Varey (2006, 2008), and Grönroos (2006a, 2007, 2008) stress that the importance of value creation during consumption lies in the way that value-in- use can be realized. The relationship between producers and customers is emphasized: Ballantyne and Varey (2006, 2008) suggest dialogical interaction, and Grönroos (2006a, 2007, 2008) mentions interactive marketing. According to Grönroos, a firm needs to support customers’ value creation because “consumption of service is process consumption rather than outcome consumption” (2007, p. 58). In the end, this can facilitate “customers’ value creation in their everyday practices” (Grönroos, 2008, p. 300) and can lead to the process of “learning together and hence to knowledge renewal” (Ballantyne and Varey, 2006, p. 346) so that “a mutual learning process is born” (Wikström, 1996, p. 361). Therefore, according to Grönroos (2011), the production and consumption are converged.

In a similar manner, but somewhat differently, Gummesson (2006, 2008a) suggests that, rather than the customer-centric approach advocated by the above authors, the concept of balanced centricity is needed, in which all stakeholders in a network are considered. Gummesson suggests that it is necessary to have so-called ‘many-to-

43 many marketing’, which, unlike one-to-one marketing, consists of “supplier networks interacting with customer networks” and “addressing the whole context of a complex world” (2006, p. 349). In this context, there is no clear line between suppliers and customers, and all relationships are interrelated in the form “B2B2C2C2B2B…” (p. 350). Although they label it with different terms, the issue that all of the above commonly emphasize is the importance of consumers’ value creation and the identification of the consumer’s value-creating space.

As examined before, with the development of information and communication technology (ICT) and the global popularity of social media forms in which the users have significant power, the firm needs to pay attention to the value creation of the customers. In the networked environment, consumers are better situated to exchange and spread their experience and usage of products or services without geographical and time restrictions (Helkkula et al., 2012; Kelleher and Helkkula, 2010; Prahalad and Ramaswamy, 2004). Thus, today’s consumers can create and co-create value with others, leading value to be seen as socially intersubjective and individually intrasubjective (Helkkula et al., 2012). The digital space itself can be a place where interactions between producers and customers occur.

2.4. Value Creation of Consumers

2.4.1. Consumer Culture Theory (CCT)

In consumer research, various research papers have been published addressing the “sociocultural, experiential, symbolic, and ideological aspects of consumption” (Arnould and Thompson, 2005, p. 868). Arnould and Thompson (2005) synthesize this entire research tradition under a single term, ‘consumer culture theory’ (CCT). They suggest that “it refers to a family of theoretical perspectives that address the dynamic relationships between consumer actions, the marketplace, and cultural meanings” (p. 868). CCT research’s historic foundation is studies that investigated consumers’ social, cultural and experiential consumption experience and activities (Hirschman and Holbrook, 1982; Holbrook and Hirschman, 1982). Grönroos mentions that “in consumer culture theory customers’ active contribution to the

44 creation of value from products and other marketing and distribution factors by symbolic meaning creation is recognized” (2006b, p. 401). Therefore, the research field shows how consumers create value and meanings through their lives and experiences. In CCT, consumers are regarded “as interpretive agents rather than as passive dupes” (Arnould and Thompson, 2005, p. 875).

According to Arnould and Thompson (2005, 2007), CCT research can be categorized according to four interrelated theoretical interests: 1) consumer identity projects, 2) marketplace cultures, 3) the sociohistoric patterning of consumption and 4) mass-mediated marketplace ideologies and consumers’ interpretive strategies. The first of these shows how consumers construct identities that “forge a coherent if diversified and often fragmented sense of self” (Arnould and Thompson, 2005, p. 871) using market materials. Although consumers are depicted as active and independent identity seekers or makers, some research argues that the identity construction is formed via the power of market rather than with the complete freedom of the consumers (Arnould and Thompson, 2005). For instance, Kozinets’s (2001) study of Star Trek fans shows how the fans construct identities and meanings in their life through consuming the entertainment product. Under the second stream, according to Arnound and Thompson (2005), some CCT research shows consumers’ willingness to form solidarity and to engage in collective rituals based on their interests or hobbies. This research stream investigates research settings such as consumption communities or subcultural consumption. It also shows how consumers construct their own identities in response to the dominant life customs and mainstream cultural styles. In the third stream, the sociohistoric patterning of consumption shows the influences of social structures and institutions such as class, gender, community and ethnicity on consumers’ consumption (Arnould and Thompson, 2005). The fourth research stream examines consumer ideology and consumers’ interpretive strategies. Here, the authors point out, “consumers are conceived of as interpretive agents whose meaning-creating activities range from those that tacitly embrace the dominant representations of consumer identity and lifestyle ideals portrayed in advertising and mass media to those that consciously deviate from these ideological instructions” (p. 874). This stream is aligned with

45 digital media research on creative and active media users (Arnould and Thompson, 2007).

The CCT research shows how consumers consume and how they construct meaning from their consumption and create value through the consumption experience. It also shows how consumption activities are influenced or guided by commercial settings, and cultural, historical and social norms and structures. CCT research ultimately shows us the dynamic interaction between consumers’ interpretive, hedonic and emotional consumption in their lives and marketplaces, which includes diverse features such as cultural producers, social structures, marketers and media (Arnould and Thompson, 2005; Hirschman and Holbrook, 1982; Holbrook and Hirschman, 1982; Kozinets, 2001; Muñiz and O’Guinn, 2001; Schouten and McAlexander, 1995). CCT research shows that “consumption is a historically shaped mode of sociocultural practice that emerges within the structures and ideological imperatives of dynamic marketplaces” (Arnould and Thompson, 2005, p. 875).

Arnould (2007) suggests that CCT research and S-D logic share some conceptual foundations. For example, Arnould (2007) suggests that CCT research has provided empirical evidence of consumers’ value creation and their co-creational role. This is consistent with the sixth foundational premise of S-D logic, “the customer is always a co-producer”, which was later changed to “the customer is always a co-creator of value” (Vargo and Lusch, 2004a, 2008b). As has been shown above, CCT is a consumer-centric approach and consumers’ use of resources, knowledge and experience are regarded as key features in their construction of their consumption experience. Thus, consumers are engaged in value co-creation with a firm by using operant resources, including cultural, social and physical resources (Arnould, 2007; Arnould et al., 2006; Arnould and Thompson, 2005).

Goulding et al. point out that CCT has benefitted from studies of marketplace cultures that “explore the many ways that consumers interact with consumable resources to establish emotional and hedonistic social relationships” (2013, p. 1). Moreover, CCT does not consider individual decision making, as most consumer research in marketing does. Rather, CCT addresses socialized, collective, networked,

46 community driven and interactive value creation and co-creation with firms (Arnould, 2007, Goulding et al., 2013). As Vargo and Lusch put it, “consumer culture theorists (CCT) have looked beyond the customer's buying decision and interaction with the firm to the customer's context by focusing on the customers' network, including the broader marketplace and culture, and their interplay in creating experience, meaning, and action” (2011, p. 184).

2.4.2. Consumption Community

Consumption communities can be categorized into three different types: subculture consumption, brand communities and consumer tribes (Canniford, 2011; Elliott and Davies, 2005; Goulding et al., 2013). Research on consumption communities looks at “the diverse ways that consumers establish socialisation and personal relationships in consumer culture” (Canniford, 2011, p. 58). It is argued that different consumption communities differ in terms of their qualities and characteristics (Canniford, 2011; Elliott and Davies, 2005; Goulding et al., 2013). The importance of understanding about consumption communities is they demonstrate the diverse ways that consumers are engaged with market materials and actively seek, construct and express their consumption experiences. Cova et al. argue, “they do not consume things without changing them; they cannot ‘consume’ a good without it becoming them and them becoming it; they cannot ‘consume’ a service without engaging in a dance with the service provider, where the dance becomes the service. Participatory culture is everywhere” (2007, p. 4). Here, the authors were actually explaining consumer tribes, specifically, but the quotation could also describe consumer communities as a whole.

Looking at the first type of community, research on subcultural consumption shows marginalized and somewhat eccentric consumption behaviour and communities (Canniford, 2011). This is not a form of consumption that is commonly accepted within mainstream society or culture. Rather, subcultural consumption has been depicted as countercultural and comprising groups of people who are resistant to the dominant norms and culture (Canniford, 2011; Elliott and Davies, 2005; Goulding et al., 2013). Various styles of subcultural consumption have been investigated, such as

47 gay culture (Kates, 2002), entertainment products (Kozinets, 2001), musical genres such as punk (Fox, 1987) and hip-hop (Arthur, 2006), and bike culture (Schouten and McAlexander, 1995). Schouten and McAlexander define subcultural consumers as “a distinctive subgroup of society that self-selects on the basis of a shared commitment to a particular product class, brand, or consumption activity” (1995, p. 43).

Canniford (2011) suggests that there are three key features of subcultures of consumption: the community is cohesive, the participants are committed and they have a resistant character. Based on these characteristics, the subcultural consumer community can be described as an organized and structured community of like- minded and dedicated people who share a similar, distinctive culture and express a voice that is resistant to the mainstream culture or mundane life. However, other research suggests that defining subcultural communities by this rigid standard is often not applicable. For instance, some communities’ members show temporary commitment and the relationships between the members of some communities are based on weak ties (Canniford, 2011). Canniford (2011) therefore suggests that explaining subcultural communities requires a different theoretical description.

The second type, the brand community, is formed by people who share a love of a particular brand either in digital space or offline at local events (Canniford, 2011; McAlexander et al., 2002; Muniz and O’Guinn, 2001). This is a different form of community to the subcultural community as “brand communities do not typically reject aspects of the surrounding culture’s ideology” (Muniz and O’Guinn, 2001, p. 414). Muniz and O’Guinn define the brand community as “a specialized, non- geographically bound community, based on a structured set of social relationships among admirers of a brand” (2011, p. 412). The different types of brand communities that have been investigated include Jeep owners (McAlexander et al., 2002), Volkswagen’s New Beetle and Star Wars (Brown et al., 2003) and Apple Newton product (Muniz and Schau, 2005). One study by Schau et al. (2009) investigated nine different brand communities in different industries, including users of Lomo and Holga cameras, a Mini Cooper community and a band community for Tom Petty and the Heartbreakers.

As with other types of communities, brand communities have consciousness of kind, shared rituals and traditions, and a sense of moral responsibility to the community (Muniz and O’Guinn, 2001). The first of these, according to Canniford (2011), indicates that a brand is central as the members are grouped due to their devotion to the brand, and the enduring relationships between the members occur because of the brand. The second refers to the fact that the members are keen to share the history or legacy of the brand and their consumption experience with others. Through the process of keeping and developing rituals and traditions, the culture of the community is maintained (McAlexander et al., 2002; Muniz and O’Guinn, 2001; Schau et al., 2009). Thirdly, the members of a brand community share a moral responsibility that helps to sustain and expand the community, and to support the consumption experiences of other members (Canniford, 2011; McAlexander et al., 2002; Muniz and O’Guinn, 2001; Schau et al., 2009). These characteristics of the brand community show that it is formed of networked relationships and activities among the brand lovers through which they create and develop the value of the brand and its community. From this perspective, the use of operant resources is critical and the value of the community is co-created, not only by its members but also with the marketers (McAlexander et al., 2002; Muniz and O’Guinn, 2001; Schau et al., 2009).

The third type is consumer tribes. Canniford points out that recent research shows that communities do not devote themselves to a focal brand. Instead, “socialisation is established through weaker levels of commitment to a more nebulous collection of loosely associated brands, products, activities and services” (2011, pp. 62-63). This is one of the central points in locating the consumer tribe in the consumption community context. Fournier and Lee (2009) show that consumer communities are formed around shared lifestyles or interests rather than a brand. They point out that “people are more interested in the social links that come from brand affiliations than they are in the brands themselves” (pp. 106-107). These are communities of people with diverse backgrounds in terms of age, class and gender (Elliott and Davies, 2005). According to Elliott and Davies, “unlike a brand community, the tribe is characterized by a ‘volatility of belonging’, which means that homogeneity of behaviour and formal rules are eschewed” (2005, p. 139).

There are four features that differentiate consumer tribes from the first two types of communities (Canniford, 2011; Cova et al., 2007; Goulding et al., 2013). Firstly, tribes are multiple in the sense that consumer tribes are formed of people who also participate in different tribes (Cova et al., 2007). Unlike the subcultural and brand communities, tribes are not dominant in the participants’ lives. Rather, they can be described as a temporary escape from their daily working lives (Goulding et al., 2002).

Secondly, tribes are playful. For people in tribes, commercial products or services are toys. Characteristics that commonly occur in other forms of communities, such as the long-term moral responsibility of the brand community participants or the reverence to social hierarchies and core products in the subcultural communities, do not feature in consumer tribes (Canniford, 2011; Goulding et al., 2013). Consumer tribes actively use the resources offered by the marketplace. Canniford says that, in tribes, “value is found in the possibility to reinvigorate passions and generate social links” (2011, p. 64). Cova et al. also assert that “Consumer Tribes rarely consume brands and products – even the most mundane ones – without adding to them, grappling with them, blending them with their own lives and altering them” (2007, p. 4).

Thirdly, tribes are transient. Goulding et al. point out that, “connected to these features of multiple identity and play, tribes emerge, and disappear as combinations of people and resources alter” (2013, p. 5). In these circumstances, the consumption experience is unpredictable, complex and emergent. Therefore, the impacts of one particular experience can vary as what used to be critical becomes trivial (Canniford, 2011; Goulding et al., 2013).

Fourth, tribes are entrepreneurial. For tribe members, market products are resources to express their own creativity. For example, Harry Potter fans make and share the games they produce and Star Trek fans produce their own shows and share them on the Internet (Goulding et al., 2013). Another example is the development of new brands. Outdoorseiten is a European website for people who share a passion for

50 hiking and camping. The website started off by sharing information and knowledge about a shared interest and lifestyle but the community later developed its own brand of outdoor products, including tents and backpacks, to meet the community members’ needs (Fournier and Lee, 2009). Cova et al. (2007) describe this phenomenon as a power shift from producers to consumers.

According to Goulding et al., “unlike subcultures, tribes are not enduring subversions of dominant institutions and, unlike brand communities tribes do not seek iconic brands as loci for consumption experiences. On the contrary, within tribes, the social links established between consumers–or consumer-to-consumer linking value–are more important than whatever is being consumed” (2013, p. 6). However, sometimes it is difficult to draw the line between these communities and define a specific community as one particular type. Rather, Canniford argues, the “boundaries within and between all kinds of communities are permeable” (2011, p. 70). Therefore, a more open approach to defining consumption communities is required, one which allows them to contain a mixture of aspects from different types.

Consumption communities show the active role consumers play in engaging with constructing individual or social consumption experiences. This will be useful in offering an understanding of the indie music consumption community in South Korea, which is the context of this research. The indie music community in question is physically located in Hong-Dae, South Korea, but is digitally dispersed. The reviewed literature on consumption communities and CCT will offer insights into this indie music community and the way its consumption experience is formed. In addition, this review of the literature on value co-creation, S-D logic and value creation by consumers will help show how the value of music is created in the networked society. To understand more about how today’s consumers and fans are engaged with cultural materials in the digital age, in the next chapter, the literature on digital culture and media will be reviewed.

2.5. Conclusion

This chapter has discussed the transformation that has taken place in terms of what marketing is, what the value of goods or services is, and how value is created. First of all, the chapter discussed the traditional view on value and value creation. The next section showed the change from the exchange paradigm to the value creation paradigm, initiated by criticism that the exchange paradigm was insufficient. The call to move away from the dominant view was made by academics who saw the importance of services in society and business. Those researchers emphasized the relational and interactional aspects of value creation, and recognized consumption activities as part of the value creation process. However, the research discipline failed to break free from the traditional concept of marketing. Thus, Vargo and Lusch (2004a) suggest a transition from the old G-D view to a new marketing concept, S-D logic. Under this logic, marketing is argued to be a set of activities used to co-create value with consumers, and value is not just embedded in the commodities produced by firms.

Understanding value co-creation with consumers is a key requirement in this digital age, in which consumers can use digital technologies to express and share their own consumption experiences and to communicate with producers directly. Therefore, the value of goods or services in this age is not limited to the traditional sense of an exchange; rather, their value includes use and symbolic values. This chapter has also suggested that understanding consumers’ own value creation and sharing processes is an important aspect of understanding value creation in the digital age.

This review of the literature on value co-creation, S-D logic and value creation by consumers will help to show how the value of music is created in the networked society. The review carried out in this chapter suggests that firms are not the only actors creating the value of music, and that music consumers are not simply the value receivers of the firms. However, there is lack of research and understanding in terms of the production and consumption of popular music in the digital age, based on the perspective of value co-creation. The impacts of digital media on the music industry have been discussed extensively in the media and in academic research. Unfortunately, the piracy issue has dominated the discussion of the impacts of digital

52 media on the music industry (Condry, 2004). Limiting the discussion of the music industry in the digital age to piracy is a firm-centric approach based on the traditional means of value and value creation, because the focus of the piracy issue is the economic effects of piracy, and thus it is based on a view that value is produced by firms and the role of consumers is to buy. This view fails to see the dynamic value creation of, not only economic, but also non-economic value. The value of a product or service is not created only when it is exchanged, in monetary form.

In the digital space, the product or service gains value when it is experienced and shared by consumers (Lusch et al., 2010; Prahalad and Ramaswamy, 2003; Ramaswamy, 2011). In the digital age, relationships do not only indicate direct person-to-person or producers-to-consumers relationships, but also indirect relationships. For instance, one person’s view or experience of music can influence others before, during, or after the consumption of music. This implies that the value co-creation of popular music takes place in a virtual community on the Internet where diverse actors such as consumers and producers participate. The community is not bounded or fixed rather it is a space where consumers and producers are co- creating the value of popular music by engaging direct or indirect interactions and relationships. This approach will overcome a provider-dominant research approach on collaboration studies and will service research which shows that the engagement with the consumers and their value creation normally takes place in physically bounded virtual spaces and occurs through direct interactions, and sees the role of consumers as limited to donating their time and creativity for the firm’s benefit (Heinonen et al, 2010; Moeller et al., 2013). Exploring the non-economic and non- traditional means of value must look at the diverse ways music audiences engage with music and create its value. Therefore, a discussion is required of what the value of music is and how it is created in this networked age.

Consumption communities show the active role consumers play in constructing individual or social consumption experiences and identities. This will be useful later in offering an understanding of the indie music consumption community in South Korea, which is the context of this research. The indie music community in question is physically located in Hong-Dae, South Korea, but is digitally dispersed. The

53 reviewed literature on consumption communities and CCT will offer insights into this indie music community and the way its consumption experience is formed. In the next chapter, in order to understand more about how today’s consumers and fans are engaged with cultural materials in the digital age, the literature on digital culture and media will be reviewed.

Chapter 3. Media Development and Its Impact on Cultural Production

3.1. Introduction

The previous chapter showed that value co-creation is an appropriate concept through which to investigate questions such as what marketing is, what the value of goods or services is, and how value is created. In addition, the chapter emphasized the rise of the Internet and social media, which have enabled value creation by consumers. The development of the Internet and social media has increased the possibilities for direct relationships between firms and consumers, consumer participation and consumers’ active value creation. The chapter shows that, in the digital space, the value of goods or services has not only economic value but also contains personal emotional and symbolic value, as users share their emotions, experiences, and opinions. By doing so, consumers construct their own consumption experiences that can be shared with other people. This eventually leads to the construction of self and the socialisation of the individual in the digital space.

The development and evolution of media have had significant impacts on our lives, culture and society. In an extreme way, it can be said that our development of our culture and society could not be explained without them. This can be seen in the case of the music industry, for example. In the history of the music industry, the development and evolution of various forms of media, including LPs, CDs and MP3 have had significant impacts on the way music is produced and consumed. The rise of the Internet and social media has changed many aspects of our lives, culture and society. Gadgets such as laptops and mobile phones, and diverse media services such as social media and digital content providers, are now essential parts of our lives. One critical feature of new media such as social media is how they encourage the participation of people (Burgess and Green, 2009). The new technology offers much easier ways to do so. People can share every bit of their lives, their opinions and their creativity with other people. Therefore, the new technologies enable the construction of both self and collectivity. In addition, individuals can be cultural producers and value creators. Therefore, the traditional dichotomous view between producers and

55 media audiences does not accurately reflect the relationships between them in the Internet era (Jenkins, 2006). However this argument does not completely disregard the role of media producers and companies. Convergence between the media firms and audiences would be an appropriate way to understand the current media landscape. Based on this initial perspective, this chapter will look at the impact of the development and evolution of media technologies on our lives, culture and society, and on media production and consumption.

To analyse the issue, firstly, Friedrich Kitter’s theory on media will be examined. Using his account, the importance of media technologies to the construction of culture and society will be revealed. Based on Kittler’s theory on media and his historical analysis of media development and its impacts, this chapter will emphasize the importance of media technologies in this age, which will enable a construction of the discourse networks of this age. The second section of this chapter will assess the implications of the rise of the Internet and social media for cultural production and consumption, everyday life and creativity. This will suggest the significance of media use and media technologies in everyday life, and emphasize the significance of audience participation and the blurring line between producers and consumers. In addition, the section will suggest that a dichotomous view of the power of media corporations and audience participation is not sufficient for examining the current landscape of cultural production and consumption in the digital media environment. A review of the literature on digital culture would suggest that the co-creation of value between producers and consumers, as discussed in the previous chapter, must be acknowledged in the context of cultural industries and cultural production and consumption.

3.2. Kittler: An Introduction

Friedrich Kittler, a German media theorist and philosopher, describes the media’s influence on our lives, culture and social structure. In his books, Discourse Networks, 1800/1900 (1990), Gramophone, Film and Typewriter (1999) and Optical Media (2010), Kittler analyses how changes in media systems have influenced the shaping of discourse in one era. In an extreme sense, his argument can be looked at as radical

56 media determinism, rather than as a humanistic approach investigating how man uses media in his social context. Winthrop-Young and Wutz comment on the basic underlying premise of Kittler’s thesis as follows:

“Just as the formalist study of literature should be the study of ‘literaturiness’, the study of media should concern itself primarily with mediality and not resort to the usual suspects – history, sociology, philosophy, anthropology, and literary and cultural studies – to explain how and why media do what they do. It is necessary to rethink media with a new and uncompromising degree of scientific rigor, focusing on the intrinsic technological logic, the changing links between body and medium, the procedures for data processing, rather than evaluate them from the point of view of their social usage” (1999, p. xiv).

Kittler argues, “media determines our situation” (1999, p. xxxix). In this sense, Kittler (2010) rejects McLuhan’s (2001) thesis, by arguing that man is not a main agent of media, rather the reverse situation is likely. According to Winthrop-Young and Wutz (1999), media are the main focus of Kittler’s theory and they are main determinants of human’s thinking system. Therefore, the way media technologies are introduced and progressed in our society reflects the changes in our lives and culture. For instance, the technological development of the 45rpm record was one of the contributors to the rise of independent music in the 1950s, as the form of record enabled easy distribution for small record labels, something previously only affordable to larger companies (Peterson, 1990).

Moreover, Kittler (1999, 2010) sees that technology itself is proliferating. Technology itself is progressed by creating another technology, so man’s subordination to technology is increasing. According to Kittler, “Gutenberg’s letterpress made the techniques that superseded it – from photography to the computer – possible in the first place. It was the unique medium that set other media free” (2010, p. 67). Talking about the previous argument of Kittler, Winthrop-Young explains that “humans are at best along for the ride; more precisely, they are the nodes, and operators necessary to keep the process going until the time arrives at

57 which media are able to interact and evolve without any human go-between” (2011, p. 65).

3.2.1. The Discourse Networks of 1800 and 1900

Discourse networks, according to Kittler, denote “the network of technologies and institutions that allow a given culture to select, store, and process relevant data” (1990, p. 369). Peters points out that Kittler’s theory is based on a tenet that “media are data processor … His aim is to use history to inform philosophical reflection about techniques of sending, saving, and calculating” (2010, p. 12). Therefore, each different era has different technological media to set the discourse in that era. It is not based on continuity; rather it is based on severance from the previous epoch (Kittler, 1990). Wellbery refers to Kittler’s theory as “the story of a finitude … a history of the present” (1990, p. x). An original German title on discourse networks, Aufschreibesysteme, is literally translated as systems of writing down or notation systems (Wellbery, 1990). Wellbery points out that “a notation system or, as we have chosen to translate, a discourse network has the exterior character – the outsideness – of a technology. In Kittler’s view, such technologies are not mere instruments with which ‘man’ produces his meanings … Rather, they set out the framework within which something like ‘meaning’, indeed, something like ‘man’, become possible at all” (1990, xii).

The discourse network of 1800 was operated by language and alphabetization. Its medium was the Mother (Kittler, 1990) and it was related to social changes in the eighteenth century. Winthrop-Young notes that “the emergence of the bourgeois nuclear family with its near-total relation of women to the private sphere redefined and promoted the role of the mother as the principal caregiver” (2011, p. 31). The mother’s mouth and voice became the media used to educate children. According to Kittler, “around 1800 a new type of book began to appear, one that delegated to mothers first the physical and mental education of their children, then their alphabetization” (1990, p. 27). Wellbery also points out that the discourse network of 1800 defines the Mother as a key figure of discourse. It is the era of “spiritualized

58 oralization of language…the process of alphabetization came to be associated with the Mother as an embodiment of Nature” (Winthrope-Young and Wutz, 1999, p. xxiv). In the discourse network of 1800, “writing served not only as a storage medium for everyday spoken language, but also as a very slow broadcast medium after the practice of inscribing on walls or monuments was superseded by the use of papyrus and parchment. … Because writing combines storage and transmission in a unique way, its monopoly held sway until media made letters and numbers, images and sound technically mobile” (Kittler, 2010, p. 47-48).

The alphabetization in the discourse network of 1800 was able to provide the senses of optical and acoustic experience “aided by compulsory education and new alphabetisation techniques; the book became both film and record around 1800 – not as media-technological reality, but in the imaginary of readers’ souls” (Kittler, 1999, p. 6).

In a book on optical media, Kittler (2010) demonstrates the interrelations between technologies and the body. It shows how the development of acoustic optical media technologies liberated our senses and our bodies. The rise of different optical media did have a different impact on data sending, processing and storing. The emergence of new optical media technologies is interrelated with the history of data processing. For instance, camera obscura, which made linear perspective possible, was created for sending data. It did not have a device to store the image, so it borrowed a painter’s hand. What this means is that man – in this case, the painter’s hand – became an appliance of a technological media (Kittler, 2010). The rise of the technology had broader impacts on the epoch, in different fields such as religion, arts and literature. Kittler shows how optical media relate to religious reformation, the rise of modern theatre and the emergence of romantic poetry (Kittler, 2010). Therefore, for Kittler, it is not man but the media technologies that have made possible the development of new media technologies, and social and cultural changes. A medium creates a new situation in a broad range of social, religious and artistic fields, and also leads to the development of a new form of medium.

There were fundamental changes in data communication and processing around 1900, with the rise of media such as the gramophone, film and the typewriter. However, in the discourse network of 1900, it consisted of “random generators that produce[d] discourses without sense or thought” (Kittler, 1990, p. 229). The impact of the use of one of the new media technologies, the typewriter, is obvious from the experience of Nietzsche, one of the first philosophers to use a typewriter. Kittler quotes Nietzsche as follows: “our writing tools are also working on our thoughts…They turn from the agency of writing to become an inscription surface’ (1999, p. 210). According to Kittler, writing, for Nietzsche, was no longer a natural extension of humans, bringing forth their voices, souls, and individuality through their handwriting. Kittler argues that “technologically possible manipulations determine what, in fact, can become a discourse” (1990, p. 232).

In this age, “language no longer originates from the Mother’s mouth…Language is no longer a homogenous transparent medium…Women are no longer mothers and makers of meaning” (Winthrop-Young, 2011, p. 71). Woman who used to be muses in the discourse of 1800 lost their status and became typists who were not expected “to express their innermost thoughts and feelings, but to transcribe endless streams of information authored by others” (Partington, 2006, p. 61). For Kittler, the discourse network no longer solely depends on the “symbolic mediation” of language; rather, the discourse network appears as other forms of the “effects of real” phenomena, such as sound and visualization (Winthrop-Young and Wutz, 1999, p. xxvii-xxviii).

Taylor and Harris comment on the distinction between the discourse networks of 1800 and 1900, stating, “unlike the writing of 1800, which was determined by sense, the new media of Network 1900 stored noise, in other words data, that had no relation to the sense a subject might locate within it” (2005, p. 77). Kittler (1999) uses Lacan’s methodological distinction to explain his choices of media forms. In his philosophy on media, Lacan’s symbolic becomes typewriter, imaginary is film and real represents gramophone. According to Kittler, the symbolic “encompasses linguistic signs in their materiality and technicity…Lacan designates ‘the world of the symbolic [as] the world of the machine’… the imaginary implements

precisely those optical illusions that were being researched in the early days of cinema…Lacan recorded infants’ jubilant reactions to their mirror images in the form of documentary footage … it [the real] forms the waste or residue that neither the mirror of the imaginary nor the grid of the symbolic can catch” (1999, p. 15-16).

Kittler argues, “the methodological distinctions of modern psychoanalysis clearly coincide with the distinctions of media technology. Every theory has its historical a priori” (1999, p. 16).

Another difference between the discourse networks of 1800 and 1900 is that the media technologies of 1900 made it possible to store time (Kittler, 1999; Kramer, 2006; Taylor and Harris, 2005). Kittler notes, “we have been in possession of storage technologies that can record and reproduce the very time flow of acoustic and optical data…Texts and scores – Europe had no other means of storing time…all data flows, provided they really were streams of data, had to pass through the bottleneck of the signifier” (1999, p. 4-5). In this sense, “time is no longer a universal form of our perception or experience, but rather it becomes a universal form of technological accessibility” (Kramer, 2006, p. 106). Due to the media, current events, in the form of moving images, photographs and sound recordings, can be stored and made available on television and in the cinema. As a result, they were free from the restrictions of time and space (Kramer, 2006).

3.2.2. The Discourse Network of 2000: Kittler in the Internet Era

In this age, digital media devices operating in digital networks, such as computers and mobile phones, become the Mother and the discourse networks of the twenty- first century. Winthrop-Young and Wutz suggest transition to “an electronic ‘systems network 2000’ ” (1999, p. xxx), while Kittler states that “people will be hooked to an information channel that can be used for any medium” (1999, p. 1). This can transmit any form of media without the restriction of time and space. The digital media technologies in this era become meaning makers and value processors. In digital space, subjects like history, the arts and politics are circulated and transmitted, in various forms, such as writing, visual images and sound. The

61 networks have made communication and interaction possible with other users, and we do not know exactly who they are or what they do. Without access to networks and devices like computers and mobile phones, communication in the digital space cannot offer any value. This is why some researchers argue about the issue of a digital divide on both a national and an international level (Hesmondlahg, 2013; van Dijk, 2006; Webster, 2006).

It is the digital technologies and devices that have enabled forms of collective intelligence, creative expression and communities. We upload our opinions, photos and videos to the networked space because we know that it will be transmitted in the digital space. In an extreme sense, it is our eyes, ears and brains that store and transmit every little thing in the form of every media technology that we cannot remember. Media technology is already a substitute for our diaries and schedules, for books, and other aspects of life. For companies and individuals, this carries potential risks as behaviour is well documented. Looking for new rules in many different fields, such as law, business and politics, on the networked space might be necessary because, as Kittler suggests “a medium is a medium is a medium. Therefore it cannot be translated. To transfer messages from one medium to another always involves reshaping them to conform to new standards and materials” (1999, p. 265). To understand the new media and its influences, the old rules would not be a solution; rather new standards are required.

It is the discourse network that makes the 2000 network different from the 1800 and 1900 ones, according to Kittler’s classification. In one sense, it might be a mixture of the discourse networks of 1800 and 1900, as the discourse network of 2000 creates a new language expression (e.g. the mobile language) and creates and circulates new literature (e.g. blogs and Twitter). In addition, there is data processing and the communication of audio sound and visual images. Websites such as YouTube, MySpace and Flickr suggest new ways of sending, processing and storing visual and audio data.

However, it does not seem completely natural to address this issue without considering man and his use of media in this age. Although Kittler says, “what

62 remains of people is what media can store and communicate. What counts are not the messages or the content” (1999, p. xl), in one respect, it is all about content and messages in the digital space. However, the importance of Kittler’s work rests on the fact that the boundary between man and media technologies become blurred as our social and cultural lives depend on various media technologies since, “we live in media, rather than with media” (Deuze, 2011, p. 143; emphasis in original).

The complete disregard of man in the history of the development of technological media forms is quite hard to accept at face value but does suggest a fresh approach to understanding relations between media, society and man. According to Gane, “Kittler’s primary interest is in technology and its power to introduce changes into (post-)human life and culture, not vice versa…it analyses the very technologies that make both the social and meaning possible” (2005, p. 38). In addition, it also provides an understanding in terms of the networked technologies in this age, as the brief explanation in the previous section suggested. For Kittler, sociology was not of great concern, but his works show the impact of the different technological media on our society, culture and lives. Winthrop-Young argues, “if technology in the broadest sense of the word is history, then the internal dynamics of an autonomous technological evolution are both the driving force and the shape of all the secondary social dynamics that are impacted by it” (2011, p. 139). Although his theory is based on a view of the technological aspects, his detailed analysis strongly suggests social and cultural aspects.

The importance of Kittler’s thesis is that it offers a view that media of a different era is critical to understand the construction of society and culture. The medium of each era is not based on continuity rather it is based on ruptures. Each different era has different technological media to set the discourse in that era. Therefore, to understand a new medium in a different era requires new understandings. From Kittler’s perspective, it enables us to understand implications of the emerging media such as social media in this age. Based on the perspective, the following sections will discuss the impacts of the Internet and social media on cultural production and consumption, and our lives.

3.3. Social Media, and Cultural Production and Consumption

3.3.1. The Emergence of the Social Media and Its Impacts on Life, Culture and Creativity

Unlike Web 1.0, Web 2.0―which was popularized by Tim O’Reilly and, unlike the industrial information economy, is a networked information economy―has been described as harnessing collective intelligence, promoting participation and encouraging human creativity (Benkler, 2006; Levy, 1997; Madden and Fox, 2006; O‘Reilly, 2007; Ritzer and Jurgenson, 2010). Ritzer and Jurgenson differentiate Web 1.0 and Web 2.0 as follows: “Web 2.0 is defined by the ability of users to produce content collaboratively, whereas most of what exists on Web 1.0 is provider- generated” (2010, p. 19). Audience participation in the media is not a completely new feature, as can be witnessed from letters to the editor or newspaper ombudsman in journalism, and homemade video clips on television, for example (Deuze, 2007; Uricchio, 2004b). Consumer participation is also widespread in everyday life, for example in using ATMs, filling up with petrol at the gas station, or using fast food restaurants (Ritzer and Jurgenson, 2010).

However, the rise of many-to-many communication forms has enabled easy ways to share and distribute information about everyday life and digital materials such as photos or videos, and to interact with other participants and enthusiasts through digital spaces such as social networking sites, blogs and virtual communities (Beer, 2008; Benkler, 2006; Gauntlett, 2011; Ritzer and Jurgenson, 2010; Uricchio, 2004a, b). To be precise, it is not a completely new phenomenon as media always existed (Poster, 2004). According to Poster, “media are neither new nor supplementary but essential to human culture, profoundly influencing what and how symbols, sounds and images are produced, distributed and received” (2004, p. 417). Social media or social network service (SNS) such as MySpace, Facebook and Twitter is a part of the development of Web 2.0. However, two different terms, Web 2.0 and social media, are often used interchangeably (Manovich, 2009). Boyd and Ellison define social media as “web-based services that allows individuals to (1) construct a public or semi-public profile within a bounded system, (2)

articulate a list of other users with whom they share a connection, and (3) view and traverse their list of connections and those made by others within the system. The nature and nomenclature of these connections may vary from site to site” (2008, p. 211).

With the rise of social media forms, two contrasting features have arisen, individualism and collectivism. While emphasizing individual creativity and expression in people’s daily lives, collectivism and networks are also highlighted. Kevin Kelly (1997) termed this era as “the network economy” because it is not computers alone that have contributed to speeding up our lives; it is also communication and relationships between computers that have done so. Wellman (2002) points out that the social world, which used to be described as “little boxes” of people, such as homes, community or work, can now be defined as social networks. In the networked society, boundaries between groups and individuals are not vivid, and interactions between diverse others occur (Wellman, 2002). However, networks and relationships are not limited to the digital space but are connected to offline and existing social networks (Beer, 2008; Boyd and Ellison, 2008). Castells (2000) also emphasizes that, in the network society, what is critical is not the role of knowledge and information but the networked digital technologies. In the network society, information and knowledge is self-expanding as the technologies enhance and accelerate the production of knowledge and information (Castells, 2000).

In this age with its variety of media technologies, we live in media not with media (Deuze, 2009, 2011, 2012). Life without media cannot be imagined. In the everyday life of every individual, media technologies such as personal computers, tablet PCs and mobiles such as smartphones make it possible to integrate with media. All life activities are mediated through technologies and media use (Beer, 2008; Burgess and Green, 2009; Livingstone, 2009; Manovich, 2009). Personal digital materials, such as music, movies, photos and documents, can be accessed through digital service providers such as social media websites, digital music services and cloud systems. The e-banking system allows people to access their accounts and the e-government system provides services through the digital space, so that a person is not required to visit these actual sites. We communicate with other people while walking along the

65 street or doing other work.

Fragmented and heterogeneous consumption patterns of each individual can be shared (Poster, 2004). By using the digital media, a consumer can “express one’s identity”. Therefore, “consumption is part of self-construction” (Poster, 2004, p. 416). We can acknowledge who we are, what we do and where we are through social media services. Deuze argues that “media [acts] as the air we breathe…[and makes] an unmediated life inconceivable – even impossible. Media and life are mutually implicated” (2012, p. 28). It is not the technological environment that enables collective action. Instead, the latter is rooted in what the media make possible, “producing a sensemaking lived experience of who we are as more than just me, myself and I…Our world – as in our sense of self – in a media life perhaps must be seen as a world in which we truly have individual and collective control over reality” (Deuze, 2012, p. 261). The coexistence of individualism and collectivity in this age is also pointed out by Wellman (2002). The author sees that “this is a time for individuals and their networks, and not for groups” (2002, p. 11). In an environment of “computer-supported social networks”, Wellman points out the rise of “networked individualism” (2002, p. 11; emphasis in original). With the technology of social networks, the traditional sense of communities of kinship and local networks is replaced by communities of interests and global networks (Wellman, 2002).

The phenomenon of ordinary people’s participation in and use of the media in their daily lives has not only been popularized by websites such as YouTube, MySpace and Flickr, where cultural materials and everyday creativity are shared. It has also emerged in various forms in different sectors, such as digital democracy, e- government and computer software (e.g. Linux) (Beer and Burrows, 2010; Fuchs, 2009; Gauntlett, 2011; Klinenberg and Benzecry, 2005). The participation of ordinary people and their expressions of creativity have been variously termed as wikinomics (Tapscott and Williams, 2006), common-based peer production (Benkler, 2006), participatory culture (Uricchio, 2004a, b; Jenkins, 2006), produsage (Bruns, 2006), collective intelligence (Levy, 1997), craft consumption (Campbell, 2005) and the prosumer (Toffler, 1980; Ritzer and Jurgenson, 2010). These concepts all share the idea that the traditional division between producers and audiences has been

66 blurred, and that audiences have become active value creators.

Cover argues, “a digital environment promoting interactivity has fostered a greater capacity and a greater interest by audiences to change, alter and manipulate a text of a textual narrative, to seek co-participation in authorship, and to thus redefine the traditional author-text-audience relationship” (2006, p. 140). Dueze also comments that “it is the privilege of our times to use media to make art with life” (2012, p. 264). Furthermore, due to the interactivity and the networked environment, Benkler (2006) sees the rise of a non-market and decentralized cooperation system, standing against the commercial market system. Therefore, “today’s users of information are not only today’s readers and consumers. They are also today’s producers and tomorrow’s innovators” (Benkler, 2006, p. 38).

In this circumstance, in which individuals in networks become producers and creators of their lives and culture, Dueze asserts, “we have to let go of seeing media as influence machines that will eventually make us disappear, instead considering media as part of our lives to the extent that they will make us visible (again)” (2012, p. 264). Therefore, what is regarded as an important feature is not what the media technologies can do for us but what we can do through the media technologies and how we live in the mediated life. This is not a life limited by the development of media technologies. It is a life that we actively construct through media. With the development of media, we are in a much easier situation than before. Using newly emerged media, we express our own identities and share our life stories and photos. In addition, some people express their creativity and commitment by creating user- generated content such as music videos or digital content that suggests solutions for various housekeeping issues or DIY works (Burgess and Green, 2009; Gauntlett, 2011).

3.3.2. Participatory and Convergence Culture

The implications of cultural production outside of the traditional media landscape are critical. Uricchio asserts,

“by embracing bottom-up dynamics, they will better reflect a wide range of social values, not just the ruling elite. By addressing cultural production that takes place outside of confines of corporate media, they will assume a much wider range of social granularity” (2007, p. 24).

For the young generation, expressions of their creativity are not special activities belonging to the traditional sense of creators such as media producers, musicians, authors and painters. According to Currah, several empirical studies of youngsters suggest that they “view information as a ‘malleable’ resource that should be open to re-mixing, editing and peer-to-peer sharing” (2007, p. 470). The Pew Center for the Internet and American Life suggests that 64 per cent of American teens devote themselves to the creation of content and 39 per cent spread media content (Lenhart et al., 2007).

With the digital media technologies and attitudes to materials, consumption activities become another means of production. Poster argues that perceptions of consumption, which used to be described as a passive activity in the era of modernity, has changed in the postmodern era, so that “consumption is not simply a purchase of an object fixed in its meaning but a resignification of that object…in every one of the acts of consumption, meanings are constructed and life is thereby organized and configured” (2004, p. 413). Campbell (2005) defines the active consumer as “the craft consumer”, who indicates his own personal creativity and expression using particular commodities or objects. It is the “aestheticization of everyday life” (Campbell, 2005, p. 39) in the realm of “an ever-widening ‘desert’ of commodification and marketization” (ibid, p. 37).

In addition, the reason for consumer participation can also be understood through the idea of gift economies. We are not only economic beings but also social beings who have needs outside of commodities and commercial standards. The needs that the market does not offer can be satisfied by gift economies (Currah, 2007). Marcel Mauss (1990) suggests that gift exchange can be categorized into three different obligations: the giving, the receiving and the reciprocation of a gift. According to Mauss, gift economies should be seen as a total social phenomenon, “which rests upon a complex mixture of locally defined aesthetic, economic, moral, religious and

68 even mythological themes” (Currah, 2007, p. 473). In the digital age, gift economies structure the way we create and share information and knowledge, and express individual creativity (Currah, 2007).

Some argue that user participation is a way of exploiting free labour to achieve commercial objectives, and that it is still corporate power that controls information (Allen, 2008; Fuchs, 2009; Scholz, 2008; Terranova, 2000; Van Dijck, 2009; Van Dijck and Nieborg, 2009). Fuchs defines user creativity and participation in cyberspace as a “prosumer commodity / produser commodity” (p. 82), arguing that “the category of the prosumer commodity / produser commodity does not signify a democratization of the media towards participatory systems, but the total commodification of human creativity” (p. 82). Similarly, Allen also criticises Web 2.0, saying that it “validates a kind of advanced, promotional entrepreneurial capitalism that binds users to profit-making service providers via the exploitation of those users’ immaterial labour” (2008).

However, Gauntlett (2011) argues that the use of data, such as personalized advertisements extracted from users’ activities in the digital space, is better discussed and understood in ethical than economic terms. For instance, Mayer-Schonberger’s (2009) book, Delete: The Virtue of Forgetting in the Digital Age, describes the nature of the web, stating that what we do on the Internet is always remembered and discussing the negative impacts this can have on our lives. In addition, the argument of free labour marginalizes the opportunities we have gained from the control of the traditional media structure. Uricchio argues, “our cultural knowledge and assumptions are grounded in the traditional centralized media. … [The media companies] have long exercised a near paternalistic control over media production and circulation” (2007, p. 18). The criticism is that this will eventually subordinate our role once again in the Internet space to that of passive recipients rather than active participants.

On the contrary, other authors see the phenomenon as gaining freedom and autonomy from corporations (Campbell, 2005; Poster, 2004; Ritzer and Jurgenson, 2010; Zwick et al., 2008) rather than as exploitation. Zwick et al. claim, “the

69 ideological recruitment of consumers into productive co-creation relationships hinges on accommodating consumers’ needs for recognition, freedom, and agency” (2008, p. 185). Poster maintains, “bits and pieces of any other cultural object may be inserted into or blended with the one in question. The cultural object loses thereby its fixity and the ‘consumer’ becomes not a user but a creator” (2004, p. 418). What motivates the consumer is evidenced by the studies of Benkler (2006, 2011), Gauntlett (2011) and Pink (2010), which show that intrinsic motivation, such as satisfaction, creativity and sociality, may be the most powerful encouragement to participation, rather than monetary returns and rewards.

The criticism that the gift and commodity economies are problematizing each other is not constructive, although the networked digital environment has provoked continuous power battles between media corporations and emerging trends termed as ‘free culture’ and ‘digital freedom’ (Banks and Humphreys, 2008; Currah, 2007; Jenkins, 2004; Jenkins and Deuze, 2008; Poster, 2004). Rather, we need to see this as a convergence between the gift and commodity economies, markets and non- markets, production and consumption, or between grassroots creativity and commercial industries (Banks and Humphreys, 2008; Barbrook, 1998; Burgess and Green, 2009; Currah, 2007; Deuze, 2007, 2009; Jenkins, 2004, 2006; Jenkins and Deuze, 2008; Rose, 2012; Uricchio, 2004a). Barbrook states, “the gift economy and the commercial sector can only expand through mutual collaboration within cyberspace. The free circulation of information between users relies upon the capitalist production of computers, software and telecommunications. The profits of commercial Net companies depend upon increasing numbers of people participating within the hi-tech gift economy” (1998).

Uricchio suggests there are three forms of convergence: “the convergence of media ownership and production; the convergence of texts across media forms; and the convergence of media audience, or better said, the ability of audiences to read texts across media forms” (2004a, p. 140). Deuze similarly suggests three forms of convergence: “convergence of place, as in the sites of media production; convergence of identity, as in notions of professional identity versus the cult of the amateur; convergence of experience, as in the way people interact with, give

70 meaning to, and even actively make their media as a window to the world” (2009, p. 473).

The convergence between the top-down commercial approach and bottom-up creativity gains momentum through each party’s interest in capitalizing on or negotiating the possibilities of digital space (Castells, 2007; Jenkins, 2004; Jenkins and Deuze, 2008; Uricchio, 2004a). Deuze (2007) shows, through four case studies in different fields (journalism, marketing, games and advertising), how media work in commercial creative industries is shared and negotiated between traditional media workers and audiences so as to co-create value. Moreover, other research using different cases shows the convergence through forms such as YouTube (Burgess and Green, 2009), reality TV programmes and Hollywood films (Jenkins, 2006) and the BBC TV programme, Doctor Who (Perryman, 2008). Banks and Humphreys (2008) propose that audience participation might not be a simple case of the exploitation of free labour but rather a dynamic open environment in which to produce co-creational value between producers and consumers. According to Jenkins and Deuze, “convergence therefore must be understood as both a top- down corporate-driven process and a bottom-up consumer- driven process. Media companies are learning how to accelerate the flow of media content across delivery channels to expand revenue opportunities, broaden markets and reinforce consumer loyalties and commitments. Users are learning how to master these different media technologies to bring the flow of media more fully under their control and to interact (and co-create) with other users. Sometimes, these two forces reinforce each other, creating closer, more rewarding, relations between media producers and consumers. Sometimes the two forces conflict, resulting in constant renegotiations of power between these competing pressures on the new media ecology” (2008, p. 6).

According to Castells, “while there is oligopolistic concentration of multimedia groups, there is, at the same time, market segmentation, and the rise of an interactive audience, superseding the uniformity of the mass audience” (2000, p. 12). Therefore, the two contrasting features of the current media environment, the power of media corporations and the audience participation, exist together. Jenkins (2006) claims that, although grassroots creativity provides diversity in terms of cultural value, the

71 influence of the traditional media should not be discarded. Rather, the virtuous cycle between the consumer-driven process and the corporate-driven one is desirable. Currah also comments, “market-based innovation will eventually foster the development and stabilization of models, which simultaneously enable ‘consumers’ to access and build upon creative works more easily, while also permitting the ‘producers’ of industrial creativity to earn economic returns on their assets” (2007, p. 490). Companies can therefore also gain benefits by allowing users freedom and creativity (Currah, 2007; Manovich, 2009; Ritzer and Jurgenson, 2010; Rose, 2012). As Ritzer and Jurgenson point out, “to a large degree, companies do not seek to dictate how prosumers use the sites because they do not have to and, if they did, the quality of what would be produced on the sites would likely decline” (2010, p. 31- 32). In addition, restraining the freedom and creativity of users would affect the quantity of content produced. For instance, one of the critical reasons for YouTube’s success is that users have the freedom to upload any videos they like and express their individual creativity (Burgess and Green, 2009). In the process, the quality and the quantity of content have increased and this has enabled the site to attract enormous numbers of users from around the globe.

The implications of user participation and value co-creation with consumers in the cultural and media industries are that, “when a commodity produces a sufficiently compelling experience environment, consumer communities will evolve beyond a company’s control, thus directly co-creating value and providing the firm with a new terrain of profit” (Thrift, 2006, p. 290). The particular case of Psy’s Gangnam Style shows that content developed for a domestic market can gain worldwide popularity. In the social media environment, co-creation and participation by consumers also rests on the ways in which participants spread feedback, information and media content. This can include diverse activities such as criticising, quoting, liking, commenting, responding, sharing and viewing, along with the activities of content production (Burgess and Green, 2009; Green and Jenkins, 2011). This is a different measure from the traditional sense of the prime objective of a firm being to sell products to consumers and of the firm monitoring market reaction through sales figures and market research alone (Thrift, 2006). Thrift (2006) argues, the market becomes a part of the value chain that enables communication and relationships

72 between producers and consumers.

The diverse activities of users, from passive participation to active production, indicates that “audiences do important work as audiences and not simply as producers” (Green and Jenkins, 2011, p. 110). Burgess and Green comment on how YouTube’s value is created: “various forms of cultural, social, and economic values are collectively produced by users en masse, via their consumption, evaluation, and entrepreneurial activities” (2009, p. 5). Green and Jenkins argue that the implications of users’ activities are as follows: “their choices, their investments, and their actions determine what gets valued” (2011, p. 110). Therefore, defining audience participation needs to include the broad activities done by the public, whether as producers or audiences and as creators or distributors. In the case of the circulation of content, it also requires a convergence of interests between producers and audiences because, if one side refuses to spread the content, then the content will not reach audiences in the first place nor will it circulate through the networks of audiences (Green and Jenkins, 2011).

The co-existence and convergence of top-down production and bottom-up participation is mutually beneficial and involves mutual reliance. This situation suggests not only the creation of economic value but also of symbolic value (Castells, 2000; Potts et al., 2008). In the case of cultural industries, the process mainly produces symbolic goods. Therefore, symbolic value is critical as economic value is derived from cultural value and the value of goods is dependent on the ability to invoke emotional responses in consumers (O’Connor, 2000). Potts et al. suggest that there are social network markets in which individual choice is determined “in the context of a complex social system of other individual choices” (2008, p. 169). Under this perspective, production and consumption are determined in social contexts and networks where “the interrelationship among agents, networks and enterprise is dynamic and productive; all are engaged in the mutual enterprise of creating values, both symbolic and economic” (Potts et al., 2008, p. 170). Castells also argues, “Because of the inclusiveness and flexibility of this system of symbolic exchange, most cultural expressions are enclosed in it, thus including the formation of what I call a culture of

‘real virtuality’. Our symbolic environment is, by and large, structured by this flexible, inclusive hypertext, in which many people surf each day. The virtuality of this text is in fact a fundamental dimension of reality, providing the symbols and icons from which we think and thus exist” (2000, p. 12-13).

For people who participate in the individualized network society, economic value creation and exchange is not the only desirable option. Symbolic value creation and exchange is also an important part of value creation and consumption.

3.4. Conclusion

This chapter has shown the impact of media on our lives, culture and society. The development and evolution of media have changed how it is produced and consumed. The review of Kittler’s thesis has shown that the development and evolution of media technologies have influenced the construction of different discourse networks. Each discourse network is constructed by the different, dominant and revolutionary media forms prevailing in the era in question. Kittler’s argument shows the critical influence of media technologies on human beings, the social structure and cultural development. This influence is also important to an understanding of the impacts of new media such as the Internet and social media. These new media have changed many aspects of the ways in which we live, communicate and interact. Media technologies have become an essential part of our lives.

The review of digital media production and consumption has shown that ordinary people can be active value creators in this age. Through social network media, people can express and construct their own identities and be socialized. These two issues, individual identity construction and collectivism, are not separate activities. They are linked and integrated in the networked digital space. The review of the digital media literature has also suggested that, although ordinary people become active value creators, the role of media producers or companies cannot simply be ignored. This chapter has also argued that companies would benefit from encouraging audience participation and freedom, because the value of goods is not limited to a traditional means of consumption but can be realized and increased

74 through activities such as evaluating, sharing and expressing creativity. In this environment, value is not limited to economic terms but also includes non-economic aspects that are created and shared by people.

The review of digital media studies showed that value co-creation is happening in the cultural industries. The review also demonstrated that media audiences actively construct their own identities by engaging with digital media technologies. Through the networked digital technologies, they share what they do, like and consume with others. The participation and engagement of people with the digital media has become a critical part of the networked media age. The success of a content or media service cannot be determined only by traditional economic standards such as sales figures or revenues. In the digital space, diverse other activities by users, aimed at sharing emotional and symbolic value, can be critical.

These understandings of media production and consumption in the digital age offer critical implications for understanding the music industry in the digital age. Music, which is an intangible form, has been produced and sold in physical formats. For music companies, the success of artists has been measured by economics terms such as charts and sales. However, the development of digital technologies has changed almost everything in the industry. Since the rise of the Internet, which has enabled digital music files to be shared freely, the dominant discourse has been that the value of physical sound carriers has been destroyed. Piracy has been a dominant issue in discussions of the impact of the Internet on the music industry, although there is no consistent evidence that piracy has had a negative effect on the industry.

However, based on the review presented in this chapter, we can argue that the value of music is not just embedded in the music itself, and to be purchased by consumers; rather, the value of music also includes the symbolic and emotional value that music audiences create and share. Therefore, the value of music in the digital age is (being) co-created by producers and audiences, especially in the independent music community. In the digital age, the value of music does not only have an economic exchange aspect but is also multi-dimensional due to the creation of non-economic

75 values that consumers create and share. These are the issues that will be discussed in the next chapter.

Chapter 4. Production and Consumption of Popular Music

4.1. Introduction

Chapter 3 discussed the impacts of media on our lives, society and culture. The revolutionary media forms in any era become the dominant intermediaries through which information and data are transmitted, and influence the ways in which culture and the arts are produced and experienced. This has been the case in the digital age as well. Revolutionary and creative media forms such as the Internet and social media have changed the ways in which we engage with culture and society, and conduct our personal lives. The previous chapter showed that, in the digital age, cultural production and consumption are not separate activities in which producers produce content and consumers simply consume it. Rather, a convergence has occurred between production and consumption leading to the co-creation of the value of media content (Jenkins, 2006). This convergence does not only mean direct interactions or relationships between producers and media audiences. Content produced by media corporations must be valued by audiences. The audiences give meanings and values to the content through a variety of methods, such as sharing, commenting and expressing creativity.

The analysis of the production and consumption of the music industry in Chapter 4 is influenced by the discipline of cultural studies in Britain. This is because the aim of cultural studies is to investigate “culture as an activity” (Gitlin, 1997, p. 25), in particular settings and people, although it would also be fruitful and important to analyse the music industry while engaging with different approaches such as business and legal perspectives (Albarran et al., 2006; Aris and Bughin, 2005; Caves, 2000; Chan-Olmstead, 2006), and media economics (Albarran et al., 2006; Doyle, 2013; Picard, 2002). The academics of the field have analysed the music industry from a sociological perspective. The inception of this field was influenced by the British New Left coming from working classes and socially marginalised groups such as gays or lesbians (Gitlin, 1997). The British cultural studies are indebted to the culturalist approach that stood against the structuralists.

The culturalists put emphasis on the human experience of culture and criticised structuralism that sees culture as an outcome of structures (Turner, 2003). However, British cultural studies try to combine both approaches and see that culture is formed while the power of structures and human experience compete and compromise each other (Kim, 2010, p. 89). Kellner notes that “cultural studies insists that culture must be investigated within the social relations and system through which it is produced and consumed, and that analysis of culture is thus intimately bound up with the study of society, politics, and economics” (1997, p. 103). The implication for the academic field is that “British cultural studies has developed a distinctive mode of research, a mode which allows it to meet its objective of analysing the articulation between cultural processes and structures in specific historical conjunctures” (Turner, 2003, p. 225). In addition, cultural studies pay great attention to “the construction of everyday life” (Turner, 2003, p. 230) that has been ignored by the tradition of elite culture (Kellner, 1997). It’s goal was to explore a ‘counterhegemonic’ notion against the dominant and ruling social classes and cultural production (Kellner, 1997). However, the field of cultural studies has been criticised due to several issues.

The first limitation of cultural studies is that they have been dominated by research of ‘an uncritical celebration of mass-popular cultural consumption’ (McGuigan, 1992, p. 49). This tendency eventually fails to pursue their initial objective of combining the traditions of structuralism and culturalism. Due to this failure, the tradition of cultural studies often “ignores the social, political, and economic frame within which popular culture is produced” (Turner, 2003, p. 188). The studies that simply focus on audience reception fail to understand that contemporary culture is negotiated between the production side, such as advertising and promotion, and the consumption side. Kellner argues that “obviously, for celebrities or products to be popular they must resonate with the audience’s experiences and fantasies, but the culture industries pay people incredible amounts of money to research precisely what will sell and then aggressively market this product” (2001, p. 401).

The second limitation is its fetishism of the popular (Kellner, 2001). Due to this tendency, Gitlin (1997) argues that the discipline of cultural studies has lost its initial objectives such as devaluing the hierarchy of value and paying attention to the

78 periphery. This argument is valid as some cultural studies have focused on massively popular cultural products such as Star Wars or celebrities such as Madonna. The fetishism of the popular in cultural studies eventually brings the distinction between popular and elite, or popular and unpopular. This shows that their criticism towards high/low distinction in culture has been replaced (Kellner, 2001). In addition, the focus on ‘popular’ culture ignores the important movements in cultural and arts history such as modernist and avant-garde art (Kellner, 2001). In terms of this limitation in cultural studies, Gitlin argues that “what now certifies worthiness is the popularity of the object, not its formal qualities” (1997, p. 31).

The third concern for cultural studies is about its uses of methodologies (Ferguson and Golding, 1997). Morley (1997) argues that much work in cultural studies is conducted using the ethnographic research strategy. The ethnographic research focuses audience reception and their interpretation of textual meanings. Therefore, the main discussion of the studies focus on micro issues rather macro issues, such as the structure of the cultural industries (Morley, 1997). In this regard, Morley criticises the lack of concern in terms of “socio-economic determination” (1997, p. 122). In addition, there are questions in terms of the methodological rigor, suggesting that the studies of reception naively study audiences’ relationships with media texts alone, failing to account for broader considerations of the audiences’ lives (Turner, 2003). Turner argues that “cultural studies is criticized for raiding other disciplines for bits and pieces of their methodologies without sufficient respect for (or knowledge of) the theoretical integrity of those methodologies” (2003, p. 226).

This chapter will present, firstly, the development and industrialisation of the music industry, by showing how record companies have controlled the music markets over the years. The second section will show that the argument of the industrialisation of culture industries has historical roots and is an important thesis, in light of the views of Adorno and Horkheimer on cultural production and consumption. However, it will then suggest that the view is not valid as it fails to recognize the dynamic nature of the production and consumption of popular music. The next section will discuss how audiences experience popular music on various types of occasion, and how the production of popular music is shaped and influenced by different actors, record

79 labels, musicians and consumers. Based on this, it will be shown that the value of popular music is created by different actors and the convergence of production and consumption. The final part of this chapter will explore the changes that have taken place in the music industry since the advent of digital technologies. This section will discuss how the music industry has evolved, and how the value of music is created in the current, digital age.

4.2. Brief Industry Background: The Industrialization and Commercialization of the Music Industry

Defining the popular music industry is not easy. Generally two terms, the record industry and the music industry, are used interchangeably. However, the two terms can convey different meanings as they have different scopes. The limitation of the term record industry is that it only captures the production and distribution of recording materials, ignoring other important parts of the business, such as publishing and live music (Hesmondhalgh, 2007; Tschmuck, 2012; Williamson and Cloonan, 2007). Therefore, it would be correct to say that the record industry is a part of the music industry. However, the term music industry fails to capture the diverse means of value creation from different sectors, such as education, instrument manufacturers and dealers, merchandising and emerging music-related businesses such as digital music services, music-related mobile application developers and digital music marketing firms. In this sense, Williamson and Cloonan (2007) point out that the term music industries is more appropriate than music industry to describe the sector. Hesmondhalgh (2007) also uses the term music industries in the plural. In addition, as the term music industry fails to include the various other industries related to music, the media, policy makers, academics and the public often wrongly believe that the music industry consists only of major recording labels. Due to this problem, the voices of other industries are ignored and the issues of the major companies, such as piracy, are understood to be the main issues of the music industries in general (Jones, 2012; Williamson and Cloonan, 2007). To define the industry in the context of the market for popular music, the music industries would be an appropriate term.

The emergence of the music industry at an industrial level emerged in the eighteenth century, when the interplay between the publishing business and the emerging public music concert culture began (Tschmuck, 2012). Tschmuck describes this era as follows: “concert and opera promoters arranged successful public performances of music; music publishers subsequently distributed these performances in forms of sheet music and adaptations for various instruments” (2012, p. 9). The domination of music publishers and concert promoters continued in the nineteenth century and they acted as gatekeepers in the music market, thus two businesses controlled business practice and had the power to rule the market (Garofalo, 1997; Tschmuck, 2012). Before the emergence of the phonograph as a popular medium for reproducing music, the power of the music publishing industry was very great (Gronow, 1983; Tschmusck, 2012). For example, Tin Pan Alley “publishers controlled the mainstream of US entertainment music and had enough power to turn songwriters, lyricists, and singers into stars” (Tschmuck, 2012, p. 10).

The music industry that we see today was already established in the early 1900s and still retains many of its original characteristics, although there have been changes. Already, in the early 1900s, US and European companies such as Colombia and Victor/Gramophone operated their businesses at a global level (Gronow, 1983; Tschmuck, 2012). Until 1914, three major companies, Colombia, Gramophone and Edison, held a large market share, but this soon changed as, by 1919, 166 companies competed in the US market (Alexander, 1994; Tschmuck, 2012). According to Alexander (1994), this was enabled by two factors. The first was rapid technological innovation (from 1890-1910), which contributed to lowering the costs of reproducing recording materials, and the other was the expiration of key patents (1914). Due to the lower entry barrier to the market, small companies were able to enter. The emergence of the small companies changed the focus of the industry from selling luxury phonograph furniture, which was the big companies’ goal, to creating content for phonographs, which was pursued by the emerging small companies (Alexander, 1994; Tschmuck, 2012).

The industrialization and commercialization of the music industry in the modern era provided opportunities for record labels to distribute and market their music, not

81 only at a national but also a global level. The industry was operating in various regions and countries even then and, therefore, many of the current major labels can be traced back to before the twentieth century (Bishop, 2005; Gronow, 1983; Tschmuck, 2012). The global markets and financial returns have attracted big corporations to the music industry. Many have expanded their market power in an attempt to control global music consumption. This has been made viable through various strategies used to market their products, including market segmentation and star marketing. These two strategies are used “to keep control of unreliable demand” (Frith, 2001, p. 35). Hesmondhalgh terms these two strategies as formatting cultural goods (Hesmondhalgh, 2007). The market segmentation strategy is used to reach audiences with different musical tastes, including World Music and sub-cultural forms such as Heavy Metal and Punk Rock. These emerging musical genres started to be commercially promoted (Frith, 2001; Tschmuck, 2012). Michael Jackson and Madonna are strong examples of the use of star-making, which has led to the global dominance of a few superstars backed by a few dominant global corporations in the music industry (Frith, 2001; Garofalo, 1999; Tschmuck, 2012). Superstars have helped the record labels to diversify their revenue streams through cross-media marketing and selling back catalogues (Garofalo, 1999). Garofalo points out that the record labels have become more “exploiters of rights than producers of records” (1999, p. 343) and Frith argues that “star-making, rather than record selling, is a record company’s core activity; the latter is dependent on the former” (2001, p. 35).

Although there were expectations that the development of the Internet would provide consumers with more freedom of choice and give creators better financial returns, this expectation has not been achieved on a large scale (Wallis, 2005). For instance, when deals are made between record labels and digital music distributors, the voices of the artists are ignored, and the share of royalties for musicians is not fair (Rodman and Vanderdonckt, 2006). The Featured Artists Coalition, which was formed to speak for musicians and performers in the UK, argues on its website: “We believe that deals recently signed between major labels and Internet platforms have not been done in the best interests of artists. Most are covered by non-disclosure agreements that make it impossible to find out where the money is going. The evidence we have so far is that although millions of dollars have changed hands, none of this has been

paid to artists”… “We are deeply concerned that many of us are still being paid royalty rates left over from a time when the record companies had to physically manufacture and distribute our material. Now, our music can be sent around the world by the click of a mouse. We demand royalty rates that reflect the true cost of digital distribution.” (2009)

In addition, music consumers’ freedom of choice has been constrained by record labels’ lawsuits against companies such as Napster and MP3.com. The labels’ strategy can be understood as moderating alternative methods of music distribution and consumption in favour of protecting their traditional business model, or trying to control the digital space, as they do with the traditional music market, examples being the acquisition of Napster and MP3.com by major labels (McCourt and Burkart, 2003). McCourt and Burkart argue that, by “offering funding and/or content licenses to these start-ups in exchange for equity, the big five acquired Internet distribution infrastructure below market value, and also saved research and development costs” (2003, p. 341).

A few major record labels, sharing about 90% of total US album sales and 80% of UK album sales, dominate the popular music market. The independent sector is marginal in comparison, as Tables 4.1 and 4.2 show. The dominance of the media market by large global firms was reduced from four to three in 2012 when EMI was acquired by Universal Music.

Table 4. 1. US Market Share of Total Album Sales by Company (%) Company 2010 2011 Universal 30.84 29.85 Music Sony 27.95 29.29 Warner Music 20.01 19.13 EMI 10.18 9.62 Others 11.02 12.11 Total 100 100 Source: The Nielsen Company and Billboard’s 2011 Music Industry Report

Table 4. 2. UK Market Share of Album Sales by Company by Volume (%) Company 2005 2006 2007 2008 Universal 25.5 30.0 32.7 35.7 Music Sony 21.2 20.1 19.0 19.1 EMI 20.1 17.9 15.7 13.4 Warner Music 12.3 11.4 10.4 10.5 Others 20.9 20.6 22.2 21.3 Total 100 100 100 100 Source: Hughes, 2010

Most major record labels are part of a global media company controlling various media production and consumption activities, such as film, television, radio, newspapers and books. Therefore, “the power structure in the music industry serves to maintain a status quo” (Wallis, 2005, p. 287). The ways in which the dominant actors in the music industry retain their status can be summarized as follows: controlling distribution; marketing channels, including marketing strategies such as cross-media marketing and developing superstars; exploiting copyright; and mergers and acquisitions. In the next few sections, each of these methods will be briefly examined.

Distribution

Several pieces of literature have already emphasized that the control of distribution is one of the critical contributors to the dominance of the music industry by certain major players (Graham et al., 2004; Jones, 2002; Peterson and Berger, 1975; Rayna and Striukova, 2009). Graham et al. mention that “the high costs of establishing a distribution system and the control of distribution channels by the major record companies have created considerable barriers to entering the record industry” (2004, p. 1096). The control of distribution as a means of dominating the music market is not a new phenomenon. Around 30 years ago, American sociologists with theoretical backgrounds in functionalism and organization theory tried to “understand the way that the music industry interacts with its market and the organizational consequences of this” (Toynbee, 2000, p. 8). Among them, Peterson

84 and Berger (1975) argue that monopoly of the record industry was continued with the control of whole processes of production from creation to sales. The importance of controlling the distribution channels can easily be understood. The major record labels have an advantage over their competitors in terms of both getting their music to the market and displaying their products in those markets.

Marketing

The importance of marketing music was recognized in the 1930s as record companies saw that the continually falling record sales would not be solved by the price war that was an initially used in an attempt to boost sales. The record companies realized that they needed new strategies to increase record sales and began aggressive promotion through media such as newspapers (Frith, 1992). In the music industry, the marketing of genre styles and stars has been central. This functions in a similar manner to branding (Shuker, 2001). Shuker argues that “it involves utilising star images, linking stars and their music with the demands/emotions/desires of audiences” (2001, p. 45). The major labels are not only record companies but also media companies. Moreover, many of them began as technology companies, Sony being an example of one such company which expanded its interests into the cultural industries. Sony purchased CBS Records in 1988 and Columbia Pictures Entertainment in 1989. Its expansion was an attempt to achieve synergy between hardware and software products. The importance of the expansion lies in the fact that it enabled cross-media marketing and promotion (Hesmondhalgh, 2007; Negus, 1997; Shuker, 2001). Given the high failure rates present in the music industry, these two activities provide extra opportunities to exploit artists and musical goods. Record labels are thus able to gain success not only from their record sales but also from diversified revenue streams. According to Negus, “the general aim was to bring different parts of the company together and to create new ways of marketing and making products that took full advantage of the ‘synergistic’ connection” (1997, p. 87). Although the hardware/software synergy approach turned out to be a failure (Hesmondhalgh, 2007), it enabled the creation of global superstars capable of generating unimaginable financial returns (Garofalo, 1999). As diverse formats through which to deliver music, such as singles, vinyl and

CDs, have been developed, and various ways to expose artists, such as MTV, the radio, the press and concerts, have been introduced (Shuker, 2001), marketing has become a central business practice through which record companies reach audiences.

In the early days of the music industry, around 1900, the main barrier to market entry was patents related to recording technologies (Peterson and Berger, 1975; Tschmuck, 2012). At that time, technological innovators tried to control the music market using their patented innovations. Bishop describes the period as follows: “controlling technology meant, and still means, controlling its associated market; therefore, among the most valuable assets of any successful record company was patent ownership” (2005, p. 444). Technological developments soon destroyed the barrier (Alexander, 1994; Rayan and Striukova, 2009). Then, however, the major record labels―which were not only record companies but also produced a whole range of recording technology systems―managed to establish a new barrier, copyright (Gronow, 1983; Lewis et al., 2005; Rayna and Striukova, 2009). Lewis et al. (2005) argue that the main entry barrier to the music industry is copyright, which gives the major labels exclusive access to markets through exclusive deals. The big record companies, as a result of their publishing arms, were able to enjoy back catalogue sales when CDs replaced LPs as the main medium in the music market. This was decisive for the record labels as these sales rescued the industry from a long downturn which had lasted from the late 1970s to the mid-1980s (Frith, 1992). Frith declares that “for the music industry the age of manufacture is now over. Companies (and company profits) are no longer organised around making things but depend on the creation of rights” (1988, p. 57). As Lewis et al. (2005) argue, the labels have exclusive access, and copyright―which was initiated to protect creativity and the creators themselves―no longer serves this purpose but has instead become a system that favours the record labels (Dolfsma, 2000; Greenfield and Osborn, 2004).

Mergers and Acquisitions

Chapple and Garofalo (1977) identify three types of merger in the music industry: horizontal, vertical and conglomerate. These types of mergers appeared from the mid-1960s. Mergers and acquisitions are events that can differentiate between the majors of 1970s and 1950s although some of company names were same (Chapple and Garofalo, 1977; Tschmuck, 2012). Horizontal mergers are where one company buys another company operating at the same level in order to reduce competition. For instance, record companies might buy other record labels or distributors might merge with other distributors. A vertical merger means integrating with a company at a different level, such as a record company merging with a distributor or retailer. Vertical mergers are carried out “to make use of the financial, promotional, and advertising structures [firms have] already developed in other areas of the music industry”, “to keep middleman profits for themselves, and to control the selling as well as the manufacturing end of the industry” (Chapple and Garofalo, 1977, p. 83). The last type is the conglomerate merger, which is initiated from outside of the music industry. The synergy strategy explained in the section on marketing is a form of conglomeration. According to Hesmondhalgh (2007), in the 1960s, conglomeration occurred not only in the cultural industries but across all industries. In addition, hardware/software synergy was popular in the 1970s and 1980s. The increasing concentration of the music industry into a few large corporations has provided an environment in which the major labels can exploit their power. In addition, their diversification into different media industries has provided opportunities to reduce risk through the use of multiple revenue streams. The ever increasing concentration of the major labels questions cultural aspects of the industry (Burnett, 1996). When the merger of two big companies, Sony and BMG, was reported, there was some concern expressed that cultural diversity would be threatened (BBC, 2004).

Independent Labels The music industry is often described as being divided into major labels that drive commercialism and independent labels that are devoted to musical creativity and innovation. Some would argue that the notion of independence is an important aspect of the production and consumption of music. According to Longhurst (2007), against the dominance of a few major labels, academic and journalistic writings have

87 been published showing the musical innovation and uniqueness that comes from independent labels such as Atlantic and Stax. Longhurst claims that “the smallness and intimacy of such companies facilitated the production of particularly innovative sounds, which broke free from the standardized products of the dominant record companies. Furthermore, it is argued that such companies were better able to represent the aspirations and feelings of their artists and audiences than the large corporations” (2007, p. 33).

However, simply dividing the structure into two is not appropriate. The record industry can more be accurately described as a “web of major and minor companies” (Negus, 1996, p. 43). Frith (1992) points out that one of the factors behind the success of the rock business has been independent producers and label owners who have acted as talent scouts and market researchers for the major labels. Tschmuck (2012) also discusses the importance of independent producers like George Martin (a producer of the Beatles), who were eager to engage in musical experiments and contributed to the British Invasion of British rock bands into the US in the 1960s. This structure can be seen as flexible specialization or post-Fordism, which emphasizes vertical disintegration and the increased power of independent producers in the cultural industries (Hesmondhalgh, 1996, 2007). However, Hesmondhalgh (1996) claims this structure is just another strategy that reinforces the power of the large corporations. Hesmondhalgh sees the flexible specialisation as eventually leading to “oligopoly, reintegration and centralization’ (1996, p. 485) in the music industry. Tschmuck also argues that the strategy offers major labels flexibility to wait until new musical innovation achieves success. This offers the major labels the chance to save “the cost of development” (2012, p. 263).

Independent record labels have been described as innovative and creative forces in the music industry from its early days (Lee, 1995). According to Shuker (2001), independent record labels had more freedom in the 1950s to scout and develop talents and new trends than major labels did. The independent record labels were responsible for the emergence of new musical genres such as rock ‘n’ roll. From the 1950s and 60s, major record labels began to establish business relationships with the independent labels such as acquiring promising talents or labels. This strategy

88 helped the major labels to notice new musical trends such as disco, hip-hop, grunge etc. and gain profitable returns from them (Wikstrom, 2009).

Unlike the co-optation between majors and indies, some literature (e.g. Hesmondhalgh, 1997, 1998; Spencer, 2008; Strachan, 2007) analyses independent music sector for its application of the do-it-yourself (DIY) ethic and democratisation of the music industry. Often, independent labels were formed by fans of musicians or artists themselves. They released music they love and commercial potential was not a great concern for them. Only a small number of people set up a label and managed all the processes of management (Spencer, 2008). Their bedrooms or record shops (e.g Rough Trade in UK or Wax Trax in U.S.) turned into the independent record labels (Hesmondhalgh, 1997; Lee, 1995; Spencer, 2008). The rise of independent music in the 1970s and 1980s, in association with the punk movement, was supported by the development of affordable recording technologies that allowed DIY production (Galuszka, 2012; Spencer, 2008). In addition, securing independent manufacturing and distribution channels enabled them to have secure delivery to the public (Hesmondhalgh, 1997; Lee, 1995). Their independence, in terms of production and distribution, made the independent record labels in the 1980s and 1990s an alternative force in the music industry (Hesmondhalgh, 1999; Galuszka, 2012).

The key characteristics of the independent record labels that distinguish them from major record labels were the democratic relationships between labels and musicians. With this ethic, the labels and musicians made deals on a 50:50 basis, and long-term contracts were not pursued. Basically, these were deals that favour artists (Hesmondhalgh, 1996). In addition, musicians were able to have freedom and autonomy in terms of making music.

However, independent record labels have suffered from several critical setbacks. The cases of Rough Trade (Hesmondhalgh, 1997) and Wax Trax (Lee, 1995) accurately depict the difficulties they faced as independent labels. One problem was a lack of internal competence in terms of management, marketing, and financing. The labels’ lack of management ability called into question the survival of the labels.

Lee (1995) examined Wax Trax and highlighted the change of the label’s goal from “to succeed as an ‘independent’” (p. 16) to “corporate survival” (p. 17). Secondly, the independent labels were venerable in terms of losing their successful acts to major labels (Hesmondhalgh, 1997; Lee, 1995). Thirdly, their ideology of being independent became an unfavourable feature to run labels effectively, when the labels were able to gain unexpected commercial successes. The strict ideological stance of indie versus major eventually led the indie labels into risk and brought internal conflicts. Due to the strict separation, the labels thought the only viable option was becoming a major label or part of it (Lee, 1995).

This power and control of the popular music market has been criticized by various academic scholars, who suggest that the dominance of the major corporations is prevalent across value-chain activities and this contributes to the control of the consumption of music (Shuker, 2001). For instance, a study by Peterson and Berger (1975) shows that, when the market share of the big labels is high, innovation and diversity in popular music is low. In addition, if the power of the major labels is so strong, this would imply that there is no hope for music unless it is promoted by the major corporations. However, in the history of popular music, this has not been the case at all. In contrast, we have seen the emergence of genres such as hip-hop and punk, which have gained popularity without support from the major corporations, although major record labels have then gone on to promote these genres after witnessing their commercial success. This contrasts with the case of artists such as Mariah Carey, who was formerly regarded as a superstar and handed a mega-deal by a major label, only to fail to achieve lasting success.

In the next chapter, the roots of the traditional and pessimistic view on the industrialization of the popular music industry will be presented, with a focus on the thesis of Adorno and Horkheimer. The discussion will show the validity but also the incompleteness of the view.

4.3. The Traditional View on Value Creation in the Music Industry

Criticism of the corporate control of popular music started around fifty years ago, when Theodor Adorno (1990), a member of the Frankfurt School, which was “analyzing the organization of mass production on the one hand, and the psychology of mass consumption on the other” (Frith, 1991, p. 103), stated that popular music was a commoditized and standardized product, coming from the factory line. The term ‘culture industry’ was introduced to show the monopoly status of the production of popular music (Gracyk, 1992). Under this view, popular music produced by a culture industry was held to be no different to other commodity forms produced by rationalized organizational processes for profit maximization (Adorno and Horkheimer, 1973).

The culture industry, which includes products such as film, radio and music, is, therefore, thought of as a form of mass culture, which is needed to satisfy the general public. For Adorno and Horkheimer (1973), the technological developments that made the wider circulation of popular culture possible were not impressive, but instead contributed to the consumption of standardized cultural products produced by the corporate machine. They argue, “it is claimed that standards were based in the first place on consumers’ needs, and for that reason were accepted with so little resistance. The result is the circle of manipulation and retroactive need in which the unity of the system grows ever stronger” (1973, p. 121). Gracyk describes that the technological advancements led to the creation of leisure time. In these circumstances, “the masses are free, but powerless, so modern society develops a ‘cultural industry’ whose products are ‘the decoration of empty time’ ” (1992, p. 529).

Adorno criticizes popular music as consisting of standardized cultural products and differentiates serious music such as classical music from the standardization of popular music (Adorno, 1990), saying, “the whole structure of popular music is standardized, even where the attempt is made to circumvent standardization. … Best known is the rule that the chorus consists of thirty-two bars and that the range is limited to one octave and one note. … [A] hit will lead back to the same familiar experience, and nothing fundamentally novel will be introduced” (1990, p. 302). In

91 addition, Adorno and Horkheimer assert that the system forces “executive authorities not to produce or sanction anything that in any way differs from their own rules, their own ideas about consumers, or above all themselves” (1973, p. 122). That is, the production of culture is regulated and controlled at the corporate level. Therefore the consumption of cultural forms cannot be free from the forces of the system and the influences of corporations. In other words, the tastes of audiences are formed within the circle of the production process, although they might feel that what is produced is what they want and that they consume cultural products according to their own distinctive standards. This is what Adorno (1941) calls “pseudo- individualization”, namely, “the necessary correlate of musical standardization”, going on to say that “by pseudo-individualization we mean endowing cultural mass production with the halo of free choice or [the] open market on the basis of standardization itself. Standardization of song hits keeps the customers in line by doing their listening for them, as it were. Pseudo-individualization, for its part, keeps them in line by making them forget that what they listen to is already listened to for them, or ‘pre-digested’ ” (p. 308).

This perspective from the early twentieth century cannot simply be ignored, although the argument shows an extreme point of view of the production and consumption of popular culture. The fundamental assumption of the corporate control of the production and consumption of popular music has been suggested repeatedly and has gained support as ordinary music audiences, critics and scholars have begun to criticize the monopoly status of a few major labels within the popular music industry. For instance, Bishop (2005) depicts the music industry as an oligopoly from the consumer point of view and an oligopsony from the musicians’ point of view. Similarly, Rayna and Striukova (2009) suggest that the major firms in the music industry are monometapolies, which are a combination of a monopoly from the consumer perspective and a monopsony from the artist perspective. They argue that the situation has offered the major firms control of the production and consumption of popular music and has ultimately led to the loss of social welfare. As a result, the production of popular music cannot be free from commercialism (Negus, 1995) and, in the end, this must also have an effect on the consumption of popular music. Negus summarizes the perspective as follows: “the relations of corporate

92 ownership and commercial imperatives of capitalism directly determine the way in which popular music is produced – corrupting, compromising and coopting creativity” (1995, p. 320). It might be proper to say that Adorno’s thesis on music is not based on a view of high art versus popular music. Rather, his argument concerns commodity (uncritical) music versus reflective (critical) music. Therefore, it is a matter of the difference between “totality” and the “self-reflecting individual” (Paddison, 1982).

However, this pessimistic view of popular music (or culture) has been criticized by numerous scholars (Paddison, 1982; Toynbee, 2000). The critical argument about popular music, which was derived from classical Marxism, has been a controversial issue, particularly for scholars who see the power of audiences and pursue the idea of romanticism in the production of popular music, an idea in which the creativity of the musician is championed. The fundamental flaw in the culture industry thesis of Adorno is therefore that “in the objects of mass culture, commodification reaches its most extreme with use-value being entirely replaced by exchange-value” (Gunster, 2000, p. 50). Toynbee also claims that, “rather than popular music audiences being cowed and incorporated by the industrial apparatus, they are extremely difficult to assimilate. This independence of audiences, and, just as important, their ideal independence, is a precondition for institutional autonomy in pop” (2000, p. 6).

Looking at music as a pure commodity form fails to explain how music is created, experienced and accepted and, in the end, separates popular music from the music industry. However, the history of the industrialization of popular music instead shows that the two entities cannot be separated (Jones, 2012). Jones (2012) points out that the practices of the music industry need to be seen as processes used to create and deliver successful symbolic value that is dependent on ‘music users’ who choose to accept and appropriate the meanings and value in specific music. Moreover, the process is collaborative, involving actors in the music industry, companies, musicians and artists’ managers. This is in counterpoint to seeing the music industry as an institution that is “a repository of knowledge about music” (Jones, 2012, p. 47). Finally, studies of the music industry have been divided into two research streams: those dealing with the production of music controlled by the

93 corporate power and those focusing on the consumption of music by active audiences (Shuker, 2001). Shuker points out that music industry studies need instead to take a reciprocal perspective between production and consumption.

The key implication of Adorno’s analysis of popular music is that it offers a critical view on the capitalistic production and consumption of popular music. This has been supported by continuous research on the popular music industry that criticises the dominance of the big major record labels that control both the production and consumption of popular music (Bishop, 2005; Rayna and Striukova, 2009). However, as is mentioned, Adorno’s main aim was not just to criticise the system of the music industry, rather it was to suggest that it requires reflexivity on the production and consumption of popular music, not the totalitarian music industry (Paddison, 1982). Therefore, the culture of popular music is not only governed by the record labels and their capitalistic production. It requires reflective individuals who participate in the production and consumption of popular music (Gunster, 2000; Toynbee, 2000). In addition the reflexivity indicates that the production and consumption of popular music are not two separate entities and popular music culture is created in an environment where these two entities converge and interact (Jones, 2012).

In the next section, the issues of the power of the audience, and creativity and commercialism, will be discussed. The discussion argues that value creation in the music industry is not an activity done by the record companies alone but is created and negotiated by various actors in the industry, operating in a complex social, cultural, economic and industrial environment.

4.4. Critiques of the Traditional View: The Convergence of Value Creation in the Popular Music Industry

4.4.1. Consumption: Popular Music and the Audience

The passive music consumption habit described in the previous section is understood to be a result of the industrialization and commercialization of the music industry and of the influence of mass media. In practice, for the music industry, consumer

94 behaviour has not been a great concern (Straw, 2001). However, the main purpose of the charts is to control stock. As Hirsch (1972) confirms, the industry seeks to co-opt with media gatekeepers. For the record labels, consumption has not been of great concern; instead, they have focused on the distribution of their goods to consumers.

This type of one-way relationship between cultural texts and audiences was used as a form of propaganda by fascist and totalitarian governments in the 1930s for political reasons, as Longhurst (2007) points out. The author suggests that there are four different relationships between texts and audiences, and argues that the one-way relationship approach will eventually see society divided into a small elite and the masses. The passive consumption perspective, which can also be referred to as the “hypodermic syringe or mass society view” (see Figure 4.1) (Longhurst, 2007, p. 201), can easily be countered with criticisms such as the fact that audiences are able to mediate, question, and interpret cultural texts.

Figure 4. 1. Hypodermic syringe or direct effect model

Producer Text Audience

Source: Longhurst, 2007, p. 201

In communication studies, an effort has been made to redefine this relationship through a two-step flow model (see Figure 4.2). This model sees audiences as social beings affected by the media in indirect ways through opinion readers. However, it has been criticized for dividing audiences into active and passive consumers and for being too simple to depict the true complexity of the relationships between audiences (Longhurst, 2007).

Figure 4. 2. Two-step flow model

Mass Media

= Opinion leader

= Individuals in social contact with an opinion leader

Source: Paletz et al., 2012, p. 270

Another approach, known as the ‘uses and gratifications’ approach, focuses on the particular use of media by audiences to satisfy their needs. This approach pays more attention to audiences’ everyday lives than the two-step flow model, although it is criticized for assuming more audience freedom over the use of media than is realistic, since the characteristics of cultural texts tend to govern the level of use (Longhurst, 2007). Finally, the two-way relationship between texts and audiences (see Figure 4.3) is explained as follows: “a text might be structured in a particular style, but is liable to be understood or decoded by the audience in ways that are not necessarily determined by the text itself” (Longhurst, 2007, p. 202). This gives room for different consumption patterns in daily life and indicates that audiences consume or use media for different purposes and assign different meanings to them.

Figure 4. 3. Two-way text-audience relationship

Text Audience

Source: Longhurst, 2007, p. 203

In some respects, passive consumption still provides a strong explanation for the production and consumption of popular music, as the popular music market is still dominated by a few major labels, while the phenomenon of TV talent programmes, such as Pop Idol and The X Factor, shows the power of mass media. However, although passive forms of music consumption still exist, there is diversity in the consumption that goes on within the popular music culture. According to Negus (1995), “the commodities produced by the music industry are actively ‘appropriated’

96 by various groups and individuals and used for the repression of subjective identities, symbolic resistance, leisure pursuits and music creation in everyday life” (1995, p. 321). According to Jones, connecting with audiences is in a state of continuous change as, “while structures of feeling are composed from a palette of familiar sentiments read through a kaleidoscope of occasions and roles, who holds those sentiments on what occasions and how music helps them express themselves is in constant flux” (2012, p. 149). This indicates that value creation in popular music is not only limited to the production process but is also shaped by music audiences’ consumption of the product. Chambers, who argues that the field of popular music is constantly evolving through creative forces, states, “after the commercial power of the record companies has been recognised, after the persuasive sirens of the radio noted, it is finally those who buy the records, dance to the rhythms and live to the beat who demonstrate, despite the determined conditions of its production, the wider potential of pop” (1985, p. xii).

Riesman (1950), who conducted research investigating the listening habits of young teenagers in Chicago, shows that there are two types of listeners, “a majority one which accepts the adult picture of youth somewhat uncritically, and a minority one in which certain socially rebellious themes are encapsulated” (1950, p. 363; emphasis in original). The majority group prefers programmes from larger radio stations and star singers, and have undiscriminating listening habits. For them, music is shared, in a form of social activity used to communicate with other peers. In contrast, the small minority group has a tendency to dislike star singers and commercial radio programmes. They prefer to listen to uncommercialized and unadvertised small bands and their listening develops into further discussion about the technical aspects of the music. In addition, they often develop a private language, but when this is adapted and used by the majority group, they discard the music they used to love. In a similar manner, Hall and Whannel, who see the young generation as “a creative minority” (1990, p. 27), argue that “teenage culture is a contradictory mixture of the authentic and the manufactured: it is an area of self-expression for the young and a lush grazing pasture for the commercial providers” (1990, p. 29). On the one hand, young people do express their creative identity to form an authentic teen culture that is different from the culture produced by the established media, and stand against the

97 established social order and institutions. On the other hand, there are passive audiences, who accept what is given to them, consume what is shaped by media organizations, and see themselves reflected through star performers.

This active audience perspective has largely been related to youth subcultural theory, which views it as a form of cultural resistance (Negus, 1995). In addition, studies in fandom understand a form of active culture consumption. For instance, the subcultural movement has been depicted as a resistance to social order and to mainstream cultural forms (Williams, 2001). Punk music was a counter-cultural movement that was used by subcultural enthusiasts to express cultural authenticity and rebel against mainstream musical forms, such as the progressive rock music that dominated the 1970s. Although the impact of subculture on popular music culture and consumption has been significant, the view is often criticized for being a simple, dichotomous view of cultural consumption, that is, mainstream versus subcultural. Subcultural consumption also often champions alternative cultural expression in contrast to the dominant cultural forms. In addition, subcultural expression is often representative of a male street culture in which women may be marginalized and which is unable to explain the cultural consumption that goes on in daily life (Negus, 1996).

Studies of subcultures and fan cultures tend to differentiate between particular, distinct groups of people, and ordinary people. The distinction eventually leads to the marginalization of the everyday consumption of the younger generation (Williams, 2001). Williams states that “people move in and out of subcultures and in and out of fandom, and that popular music [is] integrated into everyday life where its significance shifts according to different situations” (p. 225). Through small focus groups of young people, Williams (2001) showed that music consumption is not always about special forms of expression, such as resistance or empowerment, but can in fact be meaningless and routine and related to mundane life. Chambers, meanwhile, asserts the importance of the daily consumption of culture: “leisure was no longer simply a moment of rest and recuperation from work, the particular zone of family concerns and private education. It was widened into a potential life-style made possible by consumers. … Modern leisure is transformed into the very fabric

98 of personal life, the most significant context in which we have the chance to affirm our ‘selves’ ” (1985, pp. 16-17).

The increasing importance of consumption in daily life and its influence over consumers’ search for meaning offers ordinary people in modern society the opportunity to be innovative. Abercrombie terms this group of consumers as “enterprising consumers” who “are continually trying to give new meanings to their consumption activity” so that “consumers are giving ever-new meanings to commodities while producers are having to try to ‘commodify’ new consumption meanings” (1991, p. 179). Thus, there has been a power shift from the producers to the consumers, which results in a “loss of authority as producer in determining the form and content of production and consumption; it is no longer possible to say with Henry Ford that customers can have any colour of car as long as it is black!” (Abercrombie, 1991, p. 173). Abercrombie further points out that active consumption is driven by the enthusiastic “dedication of leisure time to the intense involvement in some activity” (p. 179). This enthusiasm from consumers eventually becomes similar to what producers used to pursue: “it is as if the shift from producer to consumer also involves some kind of migration of knowledge, skill, expertise, dedication and the pursuit of excellence from one to the other” (p. 179).

Although the power of mass media and the record labels cannot be ignored in our study of the consumption of music, it does not explain how we consume and experience music in different ways (see Table 4.3), such as through alternative cultural expressions, within specific fandom communities, or for relaxation. Audiences do engage with music for their own purposes and create their own meaning from such activity. Crafts et al. show that “each person is unique. Like your fingerprints, your signature, and your voice, your choices of music and the ways you relate to music are plural and interconnected in a pattern that is all yours, an ‘idoculture’ or idiosyncratic culture in sound” (1993, p. 2; quoted in Negus, 1996, p. 30). This perspective, in which audiences create and connect with different meanings and values through various ways of consuming music, questions the view that the consumption of music is governed by corporate production. The discussion in this section argues that consumption is a creative activity, producing distinct meanings

99 that cannot necessarily be controlled or predicted during the production process. According to Negus, “while audiences have historically been physically separated or dislocated from most of the sites of music production, they are not separate from the processes of musical production” (1996, p. 35; emphasis in original).

Table 4. 3. Different Types of Consumption Consumption in Popular Author Argument Music There are two types of listeners, a majority prefer to listen Riesman Mixture of to commercial radio and a minority listen to (1950) Active and uncommercialized music Passive Hall and Teenage culture is a contradictory mixture of the authentic Consumption Whannel and the manufactured (1990, p. 29) (1990) Modern leisure is transformed into the very fabric of Chambers personal life, the most significant context in which we have Everyday (1985) the chance to affirm our ‘selves’ (1985, p. 17) Experience Williams Music consumption can be meaningless and routine (2001) Hebdige Alternative expressions of cultural forms against mainstream Subculture (1979) cultural forms and societal standards Lewis Fans as a creative and imaginative group that offers creative Fandom (1992) cultural meanings to the social milieu

4.4.2. Production: Creativity and Commercialism

The issues with creativity and commercialism have been polemical in the study of the production and consumption of popular music. The relationship between musicians and record labels has been a constant battlefield, where musicians require some degree of freedom and creative control on the one hand, and record labels want to achieve a maximum level of commercial success, on the other. For instance, the English duo, Ting Tings, who rejected an offer from their record label to appear on a certain TV show, declare, “to be creative, we have to come out of the entertainment industry. You get caught up in that and become part of that. … We’ve got egos like every other musician and pop star, but equally it’s important to feel totally free when it comes to recording” (Cochrane, 2010). When indie musicians sign with major record labels, fans often feel that it is a sell-out and represents a loss of creativity and authenticity. Dowling describes the notion of selling out as follows: “it’s the perfect

100 description to tar those seen to compromise their integrity in favour of money, power or mainstream acceptance” (Dowling, 2009). The reason why some music fans feel that way is due to the fact that, often, when music fans engage with musicians, they are not only consuming music but also linking their imaginations to the musician’s symbolic values, such as performance, behaviour and stories about them (Jones, 2012). When a once-beloved musician’s musical and symbolic values no longer match what the fans expect of them, the fans may turn their backs on them.

Managing Creativity and Commercialism by Record Labels Stratton (1982) sees a tension between art and capitalism in the cultural industries, including the popular music industry. The music industry is a sector with a high failure rate and many bands and musicians do not even get record deals. Stratton (1982) argues that, in these circumstances, musicians feel great pressure to produce creative and original music that will eventually differentiate them from the objectives of commercial corporations that tend to pursue rationalization and standardization. According to Stratton (1982), this contrast between commerce and art in the record industry is not a result of clear standards or aesthetics; rather, decisions made by the personnel of record labels rely on personalized guidelines and vague assumptions. However, Negus (1995) argues that this binary view of a conflict between commerce and creativity is an inadequate and cliched argument. Rather, Negus (1995) argues, there has been a constant evolution of our evaluation of what is creative: “what counts as creative is continually re-evaluated, historically, as different groups and individuals employ changing aesthetics and as new genres emerge which challenge or lead to a re-assessment of existing judgments” (1995, p. 334). Reviewing popular music history suggests that there was an era in which rock ‘n’ roll was not accepted as a creative genre; rather, it was viewed as valueless, although later rock music such as punk was championed as musically authentic and socially rebellious. Moreover, the big record labels did not predict the massive rise in the popularity of musical genres such as rock ‘n’ roll and hip-hop. They were initially considered as passing fads, rather than innovative and creative music that could generate commercial success. However, the labels later absorbed these musical genres into their production systems, after witnessing the commercial evidence.

101

These debates show that commercialism and creativity in the production and consumption of popular music can be shaped and controlled by the organizational structure and strategic choices of the music industry. However, this is an industry where “nobody knows” what will be successful (Jones, 2012). Hirsh (1972) describes how cultural products are examined by numerous gatekeepers before they reach the consumer, and explains that cooperation with the gatekeepers is important to reduce market uncertainty, by guaranteeing the exposure of cultural products to consumers. The market uncertainty over which music will become the next big thing leads to over-production and constant media exposure, in the hope that some of the new musicians will become superstars. The uncertainty is related to a key character of cultural goods, which Lampel et al. refer to as their “nonutilitarian nature” (2000, p. 264). In other words, they are symbolic and experiential goods. As Lampel et al. point out, “they [cultural products] derive their value from subjective experiences that rely heavily on using symbols in order to manipulate perception and emotion” (2000, p. 264). Lawrence and Phillips also similarly point out that cultural products are consumed “in an act of interpretation” (2002, p. 431) and that cultural goods are valued for their meanings. Therefore, it is hard to determine which is of the highest quality. As a result of that difficulty, managers in cultural industries rely on subjective standards of quality and their own instincts.

How can the tension between commerce and art be solved? There is no clear answer. Although the market continually requires new cultural materials and creativity, DiMaggio and Hirsch admit, “there are no clear formulas for novelty” (1976, p. 741). Although Lampel et al. (2000) state that the producers of cultural products know that consumers want artefacts combining novelty and familiarity, they go on to say, “finding a successful synthesis of these two opposing elements depends more on art than technique, more on insight than professional judgment” (p. 264). This is because knowledge in the music industry tends to be tacit rather than explicit (Jones, 2012).

Inside the record industry, according to Negus (1998), creativity is strategically managed and maintained within the categories of genres so as to reduce the risks and overcome uncertainty. Moreover, value creation is also affected by the similar

102 backgrounds, in terms of class, education, gender and ethnicity, of the record label staff, as research into UK record labels has shown (Negus, 2002). Negus argues that these distinctive backgrounds “not only informed acquisition policies and marketing philosophies, they were hierarchically inscribed into the drawing up of contracts, and the allocation of investment to departments, genres and artists” (2002, p. 512). Under the comfortable division into genres of music, what the record company is looking for is not complete newness or radical revolutions but slight differences that audiences will accept. The record labels’ division of music into genres, for Negus (1998), is a type of portfolio management that enables them to assess and evaluate the performance of each genre. Therefore, some genres, for example rock, are described as ‘cash cows’ and others, such as world music, are regarded as ‘dogs’, indicating a failure or bad investment.

Negus (1998), using two examples, rap and salsa, argues that this approach is not just a simple business decision. Rather, the choice is inherited by corporate culture, and is cemented by social and cultural assumptions, as “the industry is constituted by and within a broader set of cultural practices, while also actively intervening in the reproduction of social divisions” (p. 376). Through strict categorization and preferences for one genre over another, creativity is controlled and contained. For Negus, the practice of the record labels is one of confusion and irony, since the history of popular music shows that the most notable cultural revolutions and musical innovations have occurred from a mixture of social and cultural distinctions: “Throughout the 20th century, some of the most critically recognised and socially influential music (whether jazz, salsa, reggae or rock ‘n’ roll) has been made when different cultural practices, peoples and musical traditions have met and got mixed up: when different genre cultures have interacted and combined. It is ironic that the music business seeks to capitalise on such mixtures, yet, in producing an organisation to take advantage of this, the industry has a tendency to build walls within which ‘creativity’ can be contained” (1998, p. 377).

Negus’s arguments regarding the role of the record labels in selling music shows that the record labels do have a considerable role to play in marketing the goods, but he

103 overlooks the role the musicians play. The role of the record labels in the capitalist market is essential as musicians and music companies produce symbolic goods that encompass not only music but also feelings and values that are used to connect with audiences. Thus, the role of a record label is to “sequence and contextualize” texts with the other “materials produced to market symbolic goods” (Jones, 2012, p. 63). As Jones puts it, “symbolic goods in music neither sell themselves nor organize themselves as saleable” (2012, p. 61). Therefore, musicians need the record labels in order to achieve success.

However, this does not mean that the record labels are all-powerful and simply exploit the powerless musician. Rather, producing a symbolic good is a co-creation between a label, the act and the act’s manager although it is impossible for musicians to verify the knowledge the record company has (Jones, 2012). Jones (2012) argues that, in order to analyze the production of symbolic goods in music, the musicians and the music companies should not be seen as separate entities. Rather, the process needs to be seen as a series of interrelations. Eventually, the musicians and the record company form an alliance in the pursuit of market success. Therefore, studying how musicians deal with the tension between creativity and commercialism is just as important as studying the record companies.

Managing Creativity and Commercialism by Artists For cultural creators, this tension and debate between art and commerce is a matter of their freedom to be creative, or their artistic autonomy. Banks states, “autonomy can be defined as the capacity of individuals (and also institutions and organisations) to exercise discretion or apply freedom of choice” (2010, p. 252). The concept of artistic freedom was developed in the context of romanticism in the late eighteenth century. Under the notion of romanticism, artists can exercise creative autonomy without the constraints of commercialism. However, the romantic ideology bowed under pressure from the capitalist markets (Banks, 2010; Hesmondhalgh, 2007; Jones, 2012). As Hesmondhalgh points out, “at one level, this is a mystification, so to set creativity too strongly against commerce – as a great deal of romantic and modernist thought about art did – is silly” (2007, p. 20). In other words, it is not only the market that requires a symbiotic relationship between art and commerce. The

104 artists too seek dissemination of their creations in order to gain in rewards and reputation (Banks, 2010; Hesmondhalgh, 2007; Jones, 2012).

Banks summarizes three different perspectives on autonomy, drawn from the work of Theodor Adorno (1990, 1991, 2000), Michel Foucault (1982) and Pierre Bourdieu (1993). Details of Adorno’s notion of cultural production and consumption were provided in 4.2. Adorno’s pessimistic approach to popular culture argues that artistic freedom and autonomy will eventually be eliminated by the commercialism of the cultural industries. The influence of Adorno’s perspective has appeared repeatedly. For instance, Sherzinger asserts, “the apparent erratic turbulence of music production is, in reality, subordinated and contained by awesomely consolidated corporate structures” (2005, p. 28). Banks argues that the circumstances under which artistic autonomy is denied reflect that “the artist or creative worker is reduced to the status of a cog in the machine” (2010, p. 255). In contrast, Foucault argues that the notion of autonomy is promoted by the cultural industries in order to promote the commercial objectives of firms. Therefore, under these conditions, autonomy provides a falsified image. Although creative workers are described as having personal freedom and autonomy in terms of their working conditions, the perception in fact fails to reflect the real situation in the cultural industries, where job security is low and freedom is often illusive. For Bourdieu, autonomy is a form of ostentation. Although true artists may pursue symbolic capital such as prestige and reputation, disregarding economic capital such as income over symbolic capital is another form of commercial strategy.

However, Banks (2010) sees the uncomfortable relationship between art and commerce for creative workers as a positive negotiation, through which artists express their creativity under the capitalist system. According to Banks, “the value of the autonomy striven for and expressed in the context of producing art and cultural goods is not necessarily about denying commercial necessity but about working around or through it to establish a means of creating ‘my own work’ that has a personal meaning and in some cases a social impact” (p. 263). This is because musicians are text creators who are influenced by the output of the industry. They are in a situation where they must “create texts with industry in mind” (Jones, 2012,

105 p. 60). Therefore, Jones’s conception of musicians as acts is appropriate: “acts can be seen as tradable embodiments or expressions of a capitalized professional practice that was once the province of amateur music makers” (2012, p. 62).

Hesmondhalgh (2007) argues that the romantic notion of creativity emphasizes that creativity should be separated from commercialism. This entire rejection of commercialism by romanticism can be witnessed in the examples of great artists who failed to achieve any success during their own lifetime (e.g. Van Gogh) or despaired of the commercialism forced upon artists (e.g. Kurt Cobain). However, the complete rejection of commercialism and music companies is not the only answer for creative artists. Often, their work would not reach audiences at all without help from the cultural industries, while the right help can enable them to reach the right audiences.

The production of culture should not be treated as a separate realm from the consumption of culture, as the meanings and symbols cultural industries produce are also valued through consumption activities. The tension between art and commerce is not solely an issue that has occurred between creative workers and corporations; it is also influenced by social impacts and consumer choice. Our standard on art and commerce has been changed and our approach to artistic freedom has evolved as cultural creators have struggled to find a balance. The study of authenticity, which can be thought of as sharing some features with creativity, shows that it too is socially constructed and continually renegotiated (Peterson, 2005). Therefore, the production of culture should be understood as something that goes on not only within an organization but also through broader social and cultural struggle, negotiation and complexity. Negus asserts, “we need to understand the meanings that are given to both the ‘product’ and the practices through which the product is made” (1997, p. 101). He continues, “production does not take place within a completely separate sphere but in relation to the broader social contexts of consumption” (1997, p. 102). In the end, the professional musicians and record label personnel who are the creators of symbolic goods were and are still the consumers of the industrialized production of music (Jones, 2012).

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It is audiences and their consumption of culture that determines which cultural products are created and achieve commercial success. Moreover, under a system in which cultural products need to reach audiences and be consumed, we cannot judge cultural creators via a binary view between art and commerce, as complete ignorance of commercialism does not make artists great creators. The issue needs to be understood and considered in a dialectic way to find out how musicians working with music labels in the capitalist market, and who are influenced by industrially produced music, become connected with consumers’ embedded social and cultural values. As the next section will show, the issue has been intensified still further in the digital age. With the rise of networked digital technologies, musicians are encouraged to communicate with their fans and market their goods themselves. Pursuing market success is no longer depicted as simply a loss of creativity by a musician chasing commercialism. Rather, using digital tools is understood to be an effective way of delivering and continuing to create symbolic goods for their fans, and persuading the latter to connect with the symbolic goods.

4.5. Value Creation in Popular Music in the Digital Age

4.5.1. The Impact of the Internet on the Music Industry

The rise of the Internet and technologies such as MP3 and ripping programmes changed the nature of the distribution of popular music (Graham et al., 2004). Virtual marketplaces (e.g., Amazon) have become important distributors of physical music formats. Digital music services such as iTunes sell digitised music files that do not require physical distribution; consumers can download the music they want with just one click. Access-based services, including digital music services (e.g., Spotify or SoundCloud) and video websites (e.g., YouTube), therefore remove the physicality of popular music. The record companies, which used to be regarded as selling a tangible product/commodity with per-unit pricing (Leyshon et al. 2005), can now be thought of as participants in the information industry (Sadler, 1997) who deal with service goods (Styven, 2007). The unique characteristic of the Internet is that it is “the first modern communication medium that expands its reach by decentralizing

107 the capital structure of the production and distribution of information, culture, and knowledge” (Benkler, 2006, p, 30).

The emergence of the Internet has altered the music industry’s traditional business and management practices, including its supply chain (Alexander, 1994; Graham et al., 2004; Hayward, 1995; Jones, 2000; 2002; Lam and Tan, 2001; May and Singer, 2001; McCourt and Burkart, 2003; Vaccaro and Cohn, 2004), intellectual property management including piracy issues (Garofalo, 1999; Jones, 2002; Kretschmer et al., 2001; Lam and Tan, 2001; Lewis et al., 2005; McCourt and Burkart, 2003; McLeod, 2005), and marketing (Jones, 2000, 2002; Styven, 2007; Vaccaro and Cohn, 2004).

For instance, Graham et al. (2004) show that the development of the Internet prompted networked value creation in the music industry between record labels and emerging digital music firms, as well as between record labels and consumers. They argue that, unlike the traditional linear supply chain in the music industry (See figure 4.4), there is the emergence of new businesses that are parallel with the traditional activities such as online music services or promotional activities (See figure 4.5). They characterise the traditional music supply chain as static and the emerging one in the Internet age as dynamic. Bockstedt et al.(2006) also depict the change in the value chain of the music industry in the digital age (See figure 4.6. and 4.7). In addition, the Internet offers new market opportunities of digital music (Fox, 2004) and insights into consumer behaviour (Molteni and Ordanini, 2003). The first reaction to the Internet from traditional organizations in the music industry was not at all positive. Instead, firms sought to keep hold of their market power (Furgason, 2008; Kretschmer et al., 2001). However, journalists and some research predict that small record labels may have benefited from the technology, as it provides an easy way to distribute music and connect with audiences (Alexander, 1994; Hayward, 1995; McLeod, 2005)

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Figure 4. 4. The traditional supply chain in the music industry

Source: Graham et al., 2004, p. 1092

Figure 4. 5. The supply chain in the music industry in the digital age

Source: Graham et al., 2004, p. 1092

Figure 4. 6. Traditional music distribution value chain

a) Industry market structure

b) Value chain

Source: Bockstedt et al., 2006, p. 16

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Figure 4. 7. Digital music industry distribution

a) Industry market structure

b) Value chain

Source: Bockstedt et al., 2006, p. 19

This sort of paradigm shift in the music industry is not new. It has experienced continuous change over the years. This not only includes technical or medium changes, such as from magnetic tapes to MP3, but also aesthetic novelty such as jazz or rock ‘n’ roll (Tschmuck, 2012). Tschmuck (2012) argues that the music industry’s typical reaction to emerging phenomena can be categorized in to four phases. The first phase is to ignore the new, the second is to play down its relevance, the third is to fight against it and the final phase is to accept it. The music industry’s response to digital music has indeed gone through these four phases. Having initially ignored and then fought against the new digital phenomenon, the industry has now realized

110 that it is unavoidable and are busy trying to work out how to capitalize on it, something that will require new business practices. Thus, the music industry in the digital age is still in a state of continuous change.

The initial analysis of the impact of the Internet on the music industry was divided. At the positive extreme, it was suggested that the Internet would lead to the development of direct relationships between musicians and audiences, thereby bypassing the traditional actors in the industry (Garofalo, 1999; Hayward, 1995, Jones, 2002; Kretschmer et al., 2001; Pfahl, 2001). Therefore, on the one hand, for the major labels the digital technology represents a threat that has disturbed their business model and the structure through which they have operated throughout the history of the music business. On the other hand, it has created opportunities to explore the new digital market, reduce operational costs and bypass the middlemen—all of which could reduce the barriers to market entry (Alexander, 1994; Graham, 2004; Hughes & Lang, 2003; Lam and Tan, 2001; Pfahl, 2001).

At the negative extreme, meanwhile, McCourt and Burkart (2003), Morris (2011) and Kretschmer et al. (2001) all suggested that the major actors would be able to strengthen their power by holding excessive intellectual property rights. As Morris (2011) argues, “digital music, like countless other technologies, may never live up to all its promises. It may never fully disrupt the structure of music industries or reduce the number of intermediaries between artists and their listeners”. In addition, Young and Collins (2010) argue that direct relationships between musicians and consumers, which have increased due to the rise of Web 2.0 technologies, do require hard work. Moreover, Jones emphasizes the important role the record labels still play, despite the emergence of the digital space, which allows autonomous and democratic production and distribution for musicians: “Digitization has brought ‘democracy’, but it has brought with it is obverse, autocracy. Music industry is still a field of, and a battle for, power – the power to decide who controls effort and who decides what efforts are appropriate to market success. Until musicians are in complete control of their effort, they will still need to contract with specialists in market entry and even if musicians control market entry as well as controlling music, they will still be involved in industry because their efforts are focused on market success

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rather than expression in and for itself” (2012, p. 204).

Morrow (2009) confirms this argument using real examples, stressing that success achieved without a record label’s support, such as that of Radiohead, is in fact generally inherited from previous successful careers with major labels.

Fox notes, “the Internet may potentially provide an entertainment experience over and above listening to the music itself” (2004, p. 215), continuing, “the potential for music as service appears significant, if developed with well-conceived business models that provide value to consumers over and above that offered by free download” (p. 217). For consumers, the digital space can be a medium through which to experience diversified music, show appreciation for music they love, and enjoy music-related services that could not be offered without the networked technologies. Meanwhile, Styven suggests, “a wide selection of music along with value-added features will be key to delivering value exceeding that of unauthorized P2P networks” (2007, p. 68).

Achieving this will require firstly innovation and restructuring in the music industry which will be processed by the development of non-traditional music business firms, and convergence between those actors and the traditional players (Graham et al., 2004; Jones, 2000, 2002; Lam and Tan, 2001; Leyshon et al., 2005; Power and Jasson, 2004), and secondly the democratization of musicians and audiences which will be achieved by musicians engaging in market activities independently, and active audience participation in the value creation process (Baym, 2011; Baym and Burnett, 2009; Chaney, 2010; Graham et al., 2004; Hughes and Lang, 2003; Lam and Tan, 2001; Lingel and Naaman, 2012; Ordanini et al., 2011; Pfahl, 2001; Sargemt, 2009; Wikstrom, 2009). These factors show that the value creation in the music industry in this age is processed by convergence and interaction between consumption and production (Hardaker and Graham, 2008). In the next two sections, these two issues, firstly the new development of the music industry and secondly the democratization of the actors, musicians and audiences, are discussed.

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4.5.2. Innovation and Restructuring in the Music Industry

Various studies of the music industry have investigated the fundamental changes in the music value chain, and the research shows that the traditional value chain is not the only possible method of music production and consumption. The importance of distribution in the music market has been identified as an entry barrier for new and small music firms and a means by which a few major labels uphold their market dominance (Alexander, 1994; Graham et al, 2004; Jones, 2002; Kretschmer et al., 2001). According to Alexander, “The network for distribution in the music recording industry is highly concentrated, and many fringe firms and new entrants are unable to obtain national distribution. This tends to limit the extent of competition in the industry, and possibly reduces the diversity and variety of product offerings” (1994, p. 121).

With the digital technologies, the music value chain can be networked and various actors can participate in adding value.

Therefore, there is not only disintermediation, which suggests the removal of middlemen and the creation of direct relationships with music consumers, but also reintermediation, which results from the rise of digital music and other related businesses such as digital marketing and promotion (Alexander, 1994; Graham et al, 2004; Jones, 2002; Sargent, 2009). Graham et al (2004) also point out that the traditional supply chain actors who are summarized as static and limited have been replaced by the emerging characteristics of the Internet, which facilitate dynamic and networked relationships composed of various actors and varying in length and nature.

The popularity of MP3 files as a music medium has led to them partly replacing the physical music market and resulted in the continuous development of new business models. The cases of Pressplay and MusicNet shows that the major record labels also tried to establish themselves in the digital music market but their efforts failed for a variety of reasons, including high prices, the failure of business alliances between the major record labels that required consumers to sign up for several different websites, and technological restrictions on the transfer of music. This failure eventually led to the labels licensing their catalogues to third parties. Based on the success of iTunes,

113 the major record labels turned to licensing as a strategy. This removed the need for them to formulate complex business strategies and deal with infrastructure issues in managing digital music services (Furgason, 2008). The CEO of Sony BMG, Rolf Schmidt-Holtz, remarked “What we need are good songs, good records. I don’t care if they are sold by bicycle, by plane, by CD, online. We’ll license them to anybody. But I’m not going to run an Internet platform. I have no clue how to do that” (Leonard, 2003).

This quote from a top manager of a major record label demonstrates their decision to keep focusing on what they have been doing well, namely selling their copyrights, rather than seeking a new approach. Meanwhile, Jones claims that “record companies are persisting with a largely unmodified version of ‘traditional’ practices, because they have yet to rethink their business model as one of service provision rather than copyright owning” (2012, p. 193).

Much research argues that the music industry is in a state of transformation (Fox, 2004; Leyshon et al., 2005; Power & Jansson, 2004). Fox (2004) identifies four different e-commerce models for digital music services: broadcasting, subscription, pay-per-track/album, and the artist-to-consumer model. The development of digital music services now makes it possible to gain access to the entire music library of a particular consumer through different devices such as mobile phones, which is referred to as cloud computing (e.g. Spotify). Leyshon et al. (2005) argue that there are business models emerging that reintermediate the value chain of the music industry. The research suggests that there may be a radical business model that could reduce or replace the functions of traditional record labels. One of the examples that they cited is a company called MusicBroker, which manages online rosters of unsigned acts. The company’s primary role is to connect creative artists and record labels, based on demand. Research by Power and Jansson (2004) shows a much broader picture of how the synergistic relationship between the Internet technologies and music is developing. They suggest that the relationship is not only limited to innovations in selling and distribution, but that various other innovative ways of combining music and ICT are also emerging, including “web design and advertising services tailored to musical products”, “software programming and design focused on online or multimedia products, and virtual instruments”, “high-tech post-production

114 and mixing services” and “virtual centres and communities for music industry actors” (2004, p. 428).

The reorganization of the music industry and the emergence of new business models enabled by ICT indicate that innovation in the music industry should be considered from a broader perspective than simply looking at ways in which emerging innovative actors can drive new approaches to music production and consumption. We now see a musical economy that is different from the traditional model in which record companies have controlled the networks of creativity, distribution, and reproduction (Leyshon et al., 2005). It is “an economy where the value added and the profits are to be found in information, service, and related activities rather than in manufacture” (Power and Jansson, 2004, p. 426). One notable recent example is the event known as Music Hack Day, which has shown the diverse possibilities for creative innovation in the music industry. The event involves creating music-related web applications, using the tools of participating companies, within a 24-hour period. The event started in 2009 and since then 33 events have taken place in cities such as London and New York. The founder of the event, Dave Hayne, explains its implications: “From a Music Hack Day standpoint, what I find exciting is the possibility of developers or hackers becoming the new gatekeepers. They're building the apps, sites, and tools that can recommend us music, share it within our own groups, interact with it in new ways etc. They're re-imagining how we discover, consume, and listen to music” (McCarthy, 2011).

The Music Hack Day events show how advanced technologies and creative people can offer creative innovation and new experiences that were previously unimagineable. There are other real-life examples of new entrants in the music industry too. These include consulting and research firms such as Music Ally, SoundCloud, which is an online audio distribution platform that allows sharing and collaboration, and Mixlr, which allows live broadcasting, as well as direct-to-fan marketing firms such as Topspin.

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4.5.3. The Democratization of the Music Industry

Another stream of research suggests that the reduction of the power of the major labels in digital space should increase the power of consumers as they can search for and buy music over the Internet (Hughes and Lang, 2003; Lam and Tan, 2001). The power of the musicians should also increase, as they can sell their music without entering into complex contracts with record labels (Hughes & Lang, 2003; Graham et al., 2004; Lam and Tan, 2001; Sargent, 2009; Pfahl, 2001). One extreme consequence of the traditional structure of the music industry is that musicians should have support of record labels to distribute widely and consumers had difficulties to access music that was not promoted by the labels (Hughes and Lang, 2003). Due to the networked digital environment, there is a considerable possibility that these disadvantages for musicians and audiences will fade.

Through the digital environment, musicians are able to express their creativity and be connected with their fans without support from the record labels. An editor of NME.com points out, “as a musician, it is already possible to write, record, and distribute music without signing a record deal at all” (Perreau, 2005). Successful cases include Radiohead and Nine Inch Nails. In addition, relatively unknown artists such as Amanda Palmer have been able to gain popularity on the Internet using direct communication with fans through social networking sites such as Twitter (Harding, 2010). The decision to turn down record label support and self-manage one’s career is often viewed as one of creative control. Damian Kulash, the lead singer and guitarist of the band, OK Go, which is now famous for a music video which films the members dancing on treadmills (it received about 120 million views on YouTube alone), and has moved away from its former label, EMI, states, “these days, money coming from a record label often comes with more embedded creative restrictions than the marketing dollars of other industries” (Kulash, 2010).

The existence of an environment in which musicians can manage their careers without the support of a record label suggests that there is a way of bypassing corporations’ control of creativity (Thompson et al., 2007). Thompson et al. argue, “there is a double articulation in the management of creativity associated with the record industry, which is necessitated by the fact that musicians create music, but

116 companies produce records” (2007, p. 631; emphasis in original). They go on to claim that “there is something between creativity and consumption. Musicians may self-manage their own creativity but within a framework whereby production and business managers set the terms of access to resources and influences and ultimately to the market-place” (p. 636; emphasis in original).

Therefore, although music is created by musicians, management decisions about which music will be released and the commercial potential of a given musician play critical roles in determining access to the music market. What the Internet offers in this environment is the freedom for musicians to both create and distribute music, and eventually bypass the corporate management (Thompson et al., 2007). Given the nature of the Internet, which requires the attention and the participation of fans, it may offer musicians effective ways to access consumers’ minds and needs. This direct interaction with audiences can provide musicians with a formula for creating successful symbolic goods and thus persuading potential fans to buy their music.

However, there is some consensus that attempting to achieve success without the support of a record label or other professional services is not an appropriate strategy for an unknown artist (Baym, 2011; Fox, 2004; Sargent, 2009; Young & Collins, 2010). Young and Collins point out that “the mechanisms of Music 2.0 do not guarantee ‘success’; building new relationships demands time and effort … Music 2.0 requires musicians to act as marketers, managers, and lawyers—or to employ others to act in those roles on their behalf” (2010, p. 354). Musicians therefore may encounter two different dimensions of creativity and commercial control exerted by the record labels and music audiences. In an extreme case, a few fans on the Internet would decide what is creative and what has the potential for commercial success. Therefore, digital users would replace the role of record label personnel.

In addition, there are other gatekeepers that influence audiences. There is a possibility that the music audiences hear and the information they receive are mediated by other institutions or users. This could include influential bloggers or opinion leaders on the Internet. Moreover, in the case of digital music services or social media, the selection of bands to be promoted will still be based on strategic

117 and management decisions (Dolfsma, 2000). Beer (2006) similarly points out that social networks are used to promote particular acts or cultural goods and that, although access to social media such as MySpace is open to all, this does not mean that such networks are free from the structures of capitalism. Although it was considered that the Internet would remove the “middle man” between the production and consumption of popular music, the major labels holding IPRs retain the power to control the music markets and collect huge profits by acting as intermediaries (Kretschmer et al., 2001; McCourt and Burkart, 2003; Morris, 2011). In reality, as rights holders, they ask for high licensing fees and equity stakes from startup digital music companies (Bruno, 2008) because for startups, access to catalogues of the major labels is critical to launch their services and be successful in the market. This shows that the major labels still act as intermediaries and have the power to control the market.

Along with the issue of musicians gaining power and freedom, another significant issue is the relationship with the audience and their participation in the digital space. The industrialization and commercialization of popular music transformed the experience of popular music from active musical production and public performance to passive consumption and private listening (Kibby, 2000). The transcendence of time and space in the digital space has made possible the rise of local music communities on the Internet (Kibby, 2000) and the availability of music on a global scale (Baym and Burnett, 2009). With the rise of digital technologies, activities based around popular music have become a social and active form of participation and expression. As Jones claims, “the Internet’s insertion into industry and fan practices has meant that relations of audience/performer/space/geography/ time are made problematic and have shifted in ways that have not yet been analysed” (2002, p. 226). In a study of the Internet forums of John Prine and Oh Boy Records, Kibby observes, “through the Chat Page, Oh Boy established a ‘local presence’ ” (2000, p. 99), which became “a virtual place that facilitated the belief in a local music community that included both fans and performer” (Kibby, 2000, p. 100). For audiences, the Internet opens up the possibility to connect with other audiences, to collect information, to express their creativity or preferences and to communicate with artists (Baym, 2010; Wikstrom, 2009). They can do so by creating,

118 appropriating, confirming or sharing contents or opinions on music or musicians through diverse means, including using social media, creating personal blogs and participating in virtual communities.

In the digital space, untraditional and relatively invisible forms of participation and feedback can be important ways of measuring success. One of the key reasons that OK Go decided to leave its major label was that they had a different perspective on how their success should be measured when the record label blocked fans from embedding the band’s music video of Here It Goes Again. The record label’s reason for blocking the video from being embedded was that record labels get paid for viewings on the YouTube website. For the record label, the decision was obviously based on a matter of financial returns. However, for the band, the online space represented a place to connect with fans and show their creativity; as the band’s lead singer stated, “The measuring stick could be mentions in the press, traffic to a website, email addresses collected, or views of online videos. As artists, we have meaningful, direct, and emotional access to our fans, and at a time when capturing the public’s attention is increasingly difficult for the army of competing marketers, that access is a big asset” (Kulash, 2010).

Baym (2011) suggests that, although increasing viewing numbers and feedback on the Internet is not always reflected in record sales, they can help to develop international audiences that can in turn lead to live performances in different countries. Baym thus offers a view that is quite similar to that of OK Go: “instead of seeing audiences as revenue sources waiting to be correctly monetized, artists view audiences as allies in a cause that has many ways to break even or at least turn an adequate profit” (2011, p. 35).

Taking this idea further, the case of Swedish music fans’ participation is cited as an example of professional job roles in the music industry, such as filters, promoters and gatekeepers, being replaced (Baym & Burnett, 2009). Baym (2011) mentions The Swedish Model, which is an alliance of independent Swedish labels, as an example of a balanced approach between a gift exchange and a market exchange. The active participation of fans is not only limited to the online context but has also

119 expanded to offline activities, such as organizing concerts in various cities including London. Therefore, “together these fans create an international presence far beyond what labels or bands could attain on their own” (Baym and Burnett, 2009, p. 437). The relationship between labels, musicians and fans is interactive and formed of mutual trust, thus co-creating Swedish musical value (Baym, 2011; Baym and Burnett, 2009). One of the most radical forms of fans acting as business partners is the fan-funded model of music production, for example as seen in the cases of SellaBand and ArtistShare (Chaney, 2010; Ordanini et al., 2011; Wikstrom, 2009). The reorganization of the music industry and the participation of audiences suggest that “the Internet and technologies of new media have, if nothing else, expanded the places and contexts of popular music” (Jones, 2002, p. 229).

Although the above discussion shows that two different phenomena, disintermediation and reintermediation, are occurring, when one considers the impact of the Internet on the music industry, one can see that both offer advantages for the record labels, the musicians, and the consumers when a balanced approach is taken. For the record labels, disintermediation can reduce the operational costs of music distribution over the Internet, while reintermediation offers opportunities to engage with innovation and new business models for marketing music to audiences more effectively. For the musicians, disintermediation offers the creative freedom to distribute music and connect with fans through digital technologies. The potential of reintermediation is to offer musicians the means to survive without the support of record labels and connect with corporations through licensing deals or sponsorship instead. In addition, engaging with new business models can offer new ways to communicate with music audiences. The music audiences now have a place where they can access music, communicate with musicians, and share information without the constraints of the traditional gatekeepers. Moreover, the various emerging business models and services in the music industry offer audiences new experiences.

4.6. Conclusion

This chapter, firstly, discusses the development of the music industry and the influences of industrialization of the industry in the production and consumption of

120 popular music. This chapter argues that although the traditional view of Adorno and Horkheimer regarding the cultural industries and political economy suggests that the industrialised production of culture rule the music market, the view is not enough to explain the complete picture of the production and consumption of popular music. To fill the gap in knowledge, this chapter discusses the diverse ways in which the audiences experience music and the value of music in their life. In addition, this chapter shows how the tension between creativity and commercialism is negotiated and influenced by actors who are record labels, musicians, and consumers. The culture of popular music is not only governed by the record labels and its capitalistic production. The convergence view between production and consumption of popular music is required. This convergent view helps to understand the changes in the music industry in the current digital age where diverse new businesses have entered the music market and direct interactions between musicians and audiences are possible.

The way we consume and experience music has changed dramatically. The digital music market is rapidly replacing the physical market around the world, particularly in countries with good Internet connections. In addition, communication between musicians and audiences, and among music audiences, has become easier since the invention of digital communication tools. Many musicians interact with fans through social networks, and music fans communicate with their peers in online communities. Therefore, the phenomenon of the Internet and its impact on the music industry cannot be fully understood simply by looking at which participants are winners and which losers. Rather, the digital space is better understood as a complex network that allows diverse groups of actors to contribute to the cultural, social, economic, and technical evolution of the music industry and to popular music culture.

The rise of the digital space has raised many questions such as the following: What is the value of music? How is the value of music created, appropriated, confirmed and shared? The value of music is not only embedded in the music itself and this has always been the case; the value of music is contained in various other elements, such as performances, stories and visual presentations. This is why music is called a symbolic good (Jones, 2012). In this age of networked digital technologies and communication tools, the value of music is created, appropriated, confirmed and

121 shared with people who participate in these technologies and tools. Through the process of creating, appropriating, confirming and sharing, diverse activities in the digital space, such as commenting, criticizing, liking and disseminating, give meaning to and contribute to the value of music. In addition, the value of music is not only embedded in its traditional physical formats such as LPs and CDs. With the rise of digital music services, different forms of business models and services have emerged that have enabled the creation of extra values of popular music. As is mentioned in Section 4.5.2, contemporary popular music can take different forms including digital music (e.g. streaming or downloading), mobile (e.g. ringtones), and smartphone applications (e.g. games using music). In addition, the new business models offer services such as digital promotion and collaboration between musicians. It would be hard to tell which specific approaches will survive because this would be hard to replicate in most cases. The more important issue is that value co-creation between producers and consumers, consumers, and producers, is a central matter and can take various forms.

These activities occur not only between audiences but also between audiences and the creators of the symbolic goods. Therefore, the object of this research is to investigate how the valuation of music occurs in the digital space. In the next chapter, the methodology used to investigate this issue will be explored. Then, Chapter 6 will look at the music industry in Korea and Chapters 7 and 8 will demonstrate how popular music value creation in the independent music sector is taking place in the digital age.

This research aims to 1) investigate the value of music in the digital age, 2) examine the value creation of music in the digital age, and 3) explore its implications for actors (e.g., consumers and producers) in the music industry. The literature review has discussed the recent market research which has argued that value is co-created by producers and consumers, unlike the traditional view of value creation which was considered to be controlled by producers only. This new view of value creation also demonstrates that value is not only embedded in goods or solely justified as economic value. It argues that value has symbolic, emotional and experiential characteristics. This emerging practice has also appeared in digital culture and media

122 literature. The literature suggests that media production and consumption in the digital age have converged. In the current environment, consumers are not mere media consumers, as they used to be depicted. With the rise of digital media, the ways in which people experience cultural content, manage their daily lives and construct society have changed. Consumers can now construct their own individual identity and show collectivism with the networked digital technologies. This transformation of cultural production and consumption is not an exception in the music industry.

The rise of the Internet has had critical impacts on the structure of the music industry. The literature review demonstrates that the value creation of music is now networked with different businesses and consumers. With digital media technologies, consumers can now communicate with musicians and other fans. They evaluate music, assign meanings and share with other people in the digital space. Therefore, the value of music can no longer be understood to be that which is only produced by record labels. Music consumers can individually and collectively create and share different contexts of the value of music using digital media technologies in their daily lives. To some degree, the literature review has answered the research question. However, we have little empirical understanding about the questions that are being investigated. This research will offer new and further knowledge of the value and value creation of music in the digital age and its implications for actors in the music industry.

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Chapter 5. Methodology

5.1. Introduction

The importance of doing research is observable even in daily life, such as when making decisions to buy certain products. Before buying a product, we generally collect and analyse data on different options and prices. However, although it is common practice, generally in life and in organizations, there is no clear definition of the term research; it is understood in different ways by different people. However, there is general agreement that research is a process of enquiry and investigation that is systematic and methodological, and increases knowledge (Collis and Hussey,

2009). According to the online Oxford Dictionary, research means “the systematic investigation into and study of materials and sources in order to establish facts and reach new conclusions” (2012). Collis and Hussey add, “looking at the nature of research, this tells us that researchers need to use appropriate methods for collecting and analysing research data, and to apply them rigorously. It tells us that the purpose of research is to investigate a research question with a view to generating knowledge” (2009, p. 3). Systematically designed research can challenge old beliefs and produce new theories. It is different from common sense. Research needs to be based on logic and a systematic procedure (Ghauri and Grønhaug, 2010). Therefore, systematic and rigorous enquiry allows us to understand a specific issue by collecting and analysing relevant data so as to generate new knowledge or challenge old assumptions.

Although the choice of research design is an ongoing process, and it is hard to produce ultimate research plan in qualitative research in advance, coming up with a detailed research design is recommended (Mason, 2002). The research plan does not have to be rigid; it can be changed and altered as the research proceeds. Mason suggests that the importance of having a research plan lies “in encouraging from the start the process of strategic thinking and reflection which must continue throughout the whole research process” (2002, p. 25). Although it would be difficult to have a complete research plan at the beginning of the research, it is beneficial to have an understanding of how one will approach the phenomenon one wishes to explore.

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The aims of this research are 1) to investigate the value of music in the digital age, 2) to examine the value creation of music in the digital age and 3) to explore its implications for actors (e.g. consumers and producers) in the music industry. To investigate the research aims, qualitative research that can offer detailed perspectives of the participants being studied is deemed to be an appropriate research approach. It can offer rich details of the impacts the Internet has had on the music industry. To address the research aims, a case study of the independent music industry in South Korea has been chosen. The reason for this choice is that the digital music market in South Korea is very strong and it can be said that the music industry there has transformed from traditional to digital. Therefore, music consumers and producers in this industry should be able to offer in-depth details about music consumption and production in the digital age.

Bearing in mind this understanding of what research is and the importance of putting a research plan in place, this chapter will explain the development of the systematic approach used to investigate the research questions and will suggest a rationale for the chosen research methodology. Firstly, two dominant research paradigms, qualitative and quantitative, will be discussed. Then justifications will be given for using qualitative research and case studies to answer the research questions and objectives of this thesis. Then, it will be explained why the music industry in the digital age was chosen as the research topic. Next, a research design will be suggested and justified. Finally, the data collection method will be described, including the different types of data collected, the processes used to collect the data, the field work, and how the collected data will be systematically analysed using qualitative data analysis.

5.2. Qualitative and Quantitative Research

Two different research paradigms dominate social science research: quantitative and qualitative. In terms of the philosophical considerations (see Table 5.1), generally, the positivistic approach uses quantitative methods and the interpretivistic approach uses qualitative methods (Bryman, 1988; Collis and Hussey, 2009; Firestone, 1987). The reason for this is associated with “means of expression” (Firestone, 1987, p. 16)

125 as the two approaches are based on different rhetoric (Firestone, 1987). Firestone explains that “each method type uses different techniques of presentation to project divergent assumptions about the world and different means to persuade the reader of its conclusions” (1987, p. 16). However, it is also possible to use both research methods in a single research project. This is termed mixed methods (Bryman and Bell, 2007).

Table 5. 1. Features of the two main paradigms Positivism Interpretivism  Uses large samples  Uses small samples  Has an artificial location  Has a natural location  Concerned with hypothesis testing  Concerned with generating theories  Produces precise, objective,  Produces rich, subjective, qualitative quantitative data data  Produces results with high reliability  Produces findings with low reliability but low validity but high validity  Allows results to be generalized from  Allows findings to be generalized from the sample to the population one setting to another similar setting Source: Collis and Hussey, 2009, p. 62

The differences between quantitative and qualitative research have been presented in various prior works; the two approaches have their own points of distinction (Bryman and Bell, 2007). Bryman and Bell (2007) categorize the differences into three areas: epistemology, ontology and the role of theory (see Table 5.2). Table 5.3 shows how the qualitative and quantitative approaches differ in terms of each approach’s areas of emphasis and research practices applied.

Table 5. 2. Fundamental differences between quantitative and qualitative research strategies Quantitative Qualitative Principal orientation to Deductive; testing of Inductive; generation of the role of theory in theory theory relation to research Epistemological Natural science model, Interpretivism orientation in particular positivism Ontological orientation Objectivism Constructionism Source: Bryman and Bell, 2007, p. 28

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Table 5. 3. The difference in emphasis in qualitative versus quantitative methods Qualitative Quantitative  Emphasis on testing and  Emphasis on understanding verification  Focus on understanding from  Focus on facts and/or reasons for respondent’s/informant’s point social events of view  Interpretation and rational  Logical and critical approach approach  Observations and measurements  Controlled measurement in natural settings  Subjective ‘insider view’ and  Objective ‘outsider view’ distant closeness to data from data  Hypothetical-deductive; focus on  Explorative orientation hypothesis testing  Process oriented  Result oriented  Holistic perspective  Particularistic and analytical  Generalization by comparison of  Generalization by population properties and contexts of membership individual organism Source: Ghauri and Grønhaug, 2010, p. 105

The two research approaches are quite distinct, and each has strengths and weaknesses. The qualitative methodology, firstly, attempts to see through the eyes of the participants in the phenomenon being studied so that it is able to offer fresh views and unexpected perspectives on the topic being investigated (Bryman and Bell, 2007; Marshall and Rossman, 2006). The advantage of seeing through the eyes of other people is that it can reveal the views of those being investigated and thus produce interpretive understanding (Bryman and Bell, 2007; Collis and Hussey, 2009; Marshall and Rossman, 2006). Secondly, a qualitative researcher tends to offer a great deal of descriptive, detailed research. This can provide an understanding of the social behaviour in the specific context in which it takes place (Bryman and Bell, 2007; Marshall and Rossman, 2006). Thirdly, the process of enquiry or data collection in qualitative research offers flexibility, and “this is more likely to lead to research that is interesting, in terms of standing out in some way from other studies and changing the way that we think about the social world” (Bryman and Bell, 2007, p. 421). Miles describes the strengths of qualitative research as follows: “They are rich, full, earthy, holistic, “real”; their face validity seems unimpeachable; they preserve chronological flow

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where that is important, and suffer minimally from retrospective distortion; and they, in principle, offer a far more precise way to assess causality in organizational affairs that arcane efforts like cross-lagged correlations” (1979, p. 590).

However, qualitative research does have several weaknesses. The first critique is that it can be too subjective. Quantitative researchers argue that qualitative research relies on the researcher’s unsystematic view of what is important. Secondly, there is an issue with reliability as qualitative research is hard to replicate because the qualitative researcher himself or herself is the main instrument of data collection, making what is observed and heard dependent on the researcher’s decisions (Bryman and Bell, 2007; Collis and Hussey, 2009). As different researchers can be attracted by different issues, replicating research is very unlikely. This leads to another issue, that of generalization (Bryman and Bell, 2007; Marshall and Rossman, 2006). Lastly, Miles (1979) stresses that conducting qualitative research is time consuming and labour intensive as it tends to produce a large quantity of textual data that must be organized and analysed.

The strengths of quantitative research come from measurement as it allows a clear variation in questions and can detect “fine differences between people in terms of the characteristic in question” (Bryman and Bell, 2007, p. 158). It also makes it possible to observe “more precise estimates of the degree of relationship between concepts” (Bryman and Bell, 2007, p. 158). In addition, the quantitative approach tends to have higher reliability than qualitative research, making replication easier, and performs strongly for examining causes (Bryman and Bell, 2007; Collis and Hussey, 2009), as quantitative researchers are “keen to say why things are the way they are” (Bryman and Bell, 2007, p. 168). Although quantitative research is regarded as scientific and objective, it does have some weaknesses. Bryman and Bell (2007, p. 174) point out the following four criticisms: (1) Quantitative researchers fail to distinguish people and social institutions from the world of nature. (2) The measurement processes can possess an artificial and spurious sense of precision and accuracy. (3) The reliance on instruments and procedures hinders the connection between research and everyday life. (4) The analysis of relationships between variables creates a static view of social life that is independent of people’s lives

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Thus, both research approaches have their own distinctive characteristics, advantages and disadvantages, and it would be incorrect to say that either is better than the other. Instead, choosing the research approach and methodology for a piece of research should be based on the research objective and problem (Ghauri and Grønhaug, 2010).

Based on the review of the qualitative and quantitative methodologies, the qualitative research approach is regarded as appropriate for this research. The research objectives are as follows: 1) to investigate the value of music in the digital age, 2) to examine the value creation of music in the digital age and 3) to explore its implications for actors (e.g. consumers and producers) in the music industry. Therefore, this research is about investigating the experiences and thoughts of people who participate in a particular phenomenon. It requires detailed explanations about the issues surrounding the impact of the Internet on the music industry in South Korea, rather than statistical analysis of pre-defined variables. Using a qualitative methodology will provide rich and detailed illustrations of the phenomenon being investigated, and may also lead to encounters with unexpected issues and explanations.

5.3. Research Topic

Selecting an appropriate research question can be difficult. According to Yin, “many students take an initial stab, only to be discouraged when they find the same question(s) already well covered by previous research. Other less desirable questions focus on too trivial or minor parts of an issue” (2009, p. 27).

The choice of research topic for this thesis stemmed from a personal interest in the music industry and the Internet’s impact on it. Since the rise of the Internet and various digital media forms, music has no longer been a mere physical product; rather, its value is constructed by various actors in the music industry. These actors not only include conventional ones, such as musicians and record labels, but also various forms of digital music services, including social media forms, and the music consumers who disseminate music-related information and their own thoughts about

129 music. Therefore, the value of music in the digital age is not embedded in a form of commodity produced by companies; instead, it is co-created between record labels, musicians and music audiences. In addition, in the networked digital space, the value of music is not limited to its exchange value. It can be added to by people who experience music, express their feelings about it, and share them with other people. Therefore, non-monetary aspects are regarded as important value concepts for music in the digital age. Three different academic fields – marketing, popular music studies and digital economics – have provided an understanding of the nature of value creation in the digital age and the production and consumption of culture in the Internet age.

While much research on the impact of the Internet on the music industry has been focused on the effect of music piracy, using statistical analysis, the popularization of digital music and the rise of social media forms raise the questions about the value of music in this age and its creation in the digital age. This leads to further questions regarding the production and consumption of popular music in the digitally connected age.

5.4. Research Approach

The identification of a research topic points to how one might examine the research questions. According to Mason, “usually a research topic will express something of the researcher’s ontological or epistemological position” (2002, p. 17). This means that the research questions lead to the design and strategy used in the research, suggesting methods that might help the researcher to answer them (Collis and Hussey, 2009; Mason, 2002). Earlier, qualitative research was chosen as an appropriate approach for gaining a deeper understanding and in-depth knowledge of issues such as the value of music and its creation in the Internet age. More specifically, case research is deemed an appropriate strategy to investigate this issue. Marshall and Rossman mention that “studies focusing on society and culture in a group, a program, or an organization typically espouse some form of case study as a strategy” (2006, p. 55).

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The independent music sector in South Korea was selected as the case to be investigated. One reason for this is that the researcher comes from the country originally, so it was believed that this would enable more effective communication with the respondents. In addition, the country has a high diffusion rate of the Internet and smartphones. The easy access to the Internet has changed the nature of the music industry in the country, as many sales now come from digital music. It was the first country in the world to see the share of digital music markets exceeds that of the physical markets. The trend has continued, apart from in 2008. In 2011, 53% of revenue came from digital channels (IFPI, 2012). According to International Federation of the Phonographic Industry (IFPI), within Asia, South Korea’s remains the most successful digital music market (IFPI, 2012; Lee, 2012c). In addition, the South Korean music industry is held up by the international recording industry as ‘a showcase to the world’ for the way it has adapted to the internet (Pakinkis, 2013). IFPI reports that the recorded music market in South Korea is the 11th largest in the world in 2012. The music industry itself is very strong in the global context. According to the World Bank, it is the world’s 15th biggest economy.

The main reason for selecting the independent music sector rather than major music firms in South Korea was the growing public interest in independent music in South Korea. In recent years, musicians such as 10cm and Jang Ki-Ha and Faces have been able to achieve an unusual level of fame nationally (Korea Creative Contents Agency (KOCCA), 2011). The choice was also based on the view that unknown and independent musicians, who have had difficulties in the past in terms of media exposure and distributing their music, should benefit from the open digital environment (Pfahl, 2001). In addition, it is seen that independent music fans are now taking on the role of promoter, which used to be done by professionals in the record labels. Passionate fans form online communities to co-create value in the music they love (Baym and Burnett, 2009). The independent music sector is now a major force in the global music market and how it organises itself and relates to fans cannot be ignored by the big labels (A2IM, 2013; Williams, 2013).

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5.5. Research Design and Plan

The research design refers to the entire process of investigation from start to end. It includes identifying a research question, finding relevant data, and conducting data analysis (Yin, 2009). Yin states that “a research design is a logical plan for getting from here to there, where here may be defined as the initial set of questions to be answered, and there is some set of conclusions (answers) about these questions” (2009, p. 26; emphasis in original). Mason notes that research questions are “the formal expression of your intellectual puzzle” (p. 20). According to the author, the intellectual puzzle is a set of ontological and epistemological positions held by a researcher. Therefore, the researcher’s intellectual puzzle should be “ontologically meaningful, and epistemologically explainable or workable” (p. 18). Collis and Hussey (2009) suggest that the research design is initiated by determining the researcher’s research paradigm, which they define as “a framework that guides how research should be conducted, based on people’s philosophies and their assumptions about the world and the nature of knowledge” (2009, p. 55).

Mason (2000) argues that the question of ontology is fundamental in research and needs to be considered before specific research questions or topics are identified. According to Mason, ontology “involves asking what you see as the very nature and essence of things in the social world” (2002, p. 14). The researcher’s epistemological position is related to their judgement as to what they regard as knowledge or evidence. It is their “theory of knowledge, and should therefore concern the principles and rules by which [they] decide whether and how social phenomena can be known, and how knowledge can be demonstrated” (Mason, 2002, p. 16). Collis and Hussey point out that ontology is concerned with “the nature of reality” and epistemology is concerned with “what we accept as valid knowledge” (2009, p. 59). As Table 5.1 showed, the quantitative research paradigm is associated with positivism and the qualitative with interpretivism. Collis and Hussey (2009, p. 59) show how different paradigms have different ontological and epistemological assumptions, which can be summarized as follows: Ontological assumptions:  Positivists believe that social reality is objective and external to the researcher. Therefore, there is only one reality.

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 Interpretivists believe that social reality is subjective because it is socially constructed. Therefore, each person has his or her own sense of reality and there are multiple realities. Epistemological assumptions:  Positivists believe that only phenomena that are observable and measureable can validly be regarded as knowledge. They try to maintain an independent and objective stance.  Interpretivists attempt to minimize the distance between the researcher and that which is researched. They may be involved in different forms of participative enquiry.

Throughout this research project, from an ontological point of view, the phenomenon being studied was held to be constructed by the actors involved in it. Therefore, it was believed necessary to gain an understanding of the opinions, experiences, thoughts and interpretations of people who had participated in and experienced the phenomenon. Epistemologically, it was regarded that interviews with independent record labels and music consumers who were fans of independent music and involved in creating some form of value was an appropriate method for gaining an in-depth understanding. As the literature review chapters have consistently shown that value is co-created, it was deemed necessary to interview both producers and consumers of music. Although each group would have their own perspectives of the impact the Internet has had on the music industry, interviewing both parties would demonstrate how their use of (or activities performed in) the digital space might be linked or integrated. It was believed that hearing the participants’ opinions and accounts of their own experiences would offer a real picture of the impact of digital technologies on the participants in the music industry. Moreover, it would show the value of music, how that value is created in the digital age, and the implications for participants in the music industry.

This is because interpretive qualitative research suggests each actor has their own interpretation of a phenomenon (Belk et al., 2013; Hirschman, 1986; Thompson et al., 1994). The research stream further suggests that the interpretation is influenced by the social, cultural, and historical contexts of the phenomenon. The interpretation

133 also has an influence on the contexts. This suggests that every participant in a phenomenon is unique. A person learns and interprets the phenomenon through their individual terms. The learning and interpretation is also shared and can influence other people in society. This reflects the critical difference between humans and the natural order. The emphasis is on the understanding of human actions rather than to explain it and searching for a statistical generalisation (Bryman and Bell, 2007).

In addition, secondary data were collected. Collecting document-based data was an ongoing process, as materials were continually being produced and collected. The secondary research was intended to provide an overview of the music industry in South Korea, the impact of digital technology on the music industry and a historical analysis of the development of independent music in the country. This would give us a general understanding of the music market in South Korea.

5.6. Qualitative Research

Qualitative research is about investigating meanings rather than numbers (Dey, 1993). According to Denzin and Lincoln, “Qualitative research is a situated activity that locates the observer in the world. It consists of a set of interpretive, material practices that make the world visible. … this means that qualitative researchers study things in their natural setting, attempting to make sense of, or interpret, phenomena in terms of the meanings people bring to them” (2005, p. 3).

Qualitative research is epistemologically interpretivist and ontologically constructionist (Bryman and Bell, 2007). According to Bryman and Bell, the interpretivist position is “the understanding of the social world through an examination of the interpretation of that world by its participants”, while the constructionist believes that “social properties are outcomes of the interactions between individuals, rather than phenomena ‘out there’ and separate from those involved in its construction” (2007, p. 402).

This is different from the positivist paradigm referred to in quantitative and scientific studies. Positivists see social reality as objective and use scientific methods such as

134 statistics. Remenyi et al. note that positivists prefer “working with an observable social reality and that the end product of such research can be law-like generalisations similar to those produced by the physical and natural scientists” (2008, p. 32). However, interpretivism sees social reality as subjective and socially constructed. This paradigm considers every actor to have a different perspective on reality, and investigations of social reality are guided by qualitative research (Collis and Hussey, 2009). Firestone (1987) asserts that the difference between quantitative and qualitative research is that “quantitative research seeks to explain the causes of changes in social facts, primarily through objective measurement and quantitative analysis” (p. 16; emphasis in original), while qualitative research is “more concerned with understanding the social phenomenon from the actors’ perspectives through participation in the life of those actors” (pp. 16-17).

Due to the nature of this research and the questions being asked here, it was felt essential to hear from people who had experienced the phenomenon under study. It would therefore be more appropriate to use a qualitative research strategy to investigate the dynamic and unstructured natural phenomenon of music production and consumption in the digital age, rather than using pre-defined variables or hypotheses as positivists generally engage with. Bryman states that qualitative researchers “express commitment to viewing events, action, norms, values, etc. from the perspective of the people who are being studied” (1988, p. 61). Therefore, in this research, hearing from the people involved makes it possible to reflect the dynamic nature of the production and consumption of music, and its value, in the digital age.

5.6.1. The Quality of Qualitative Research In quantitative research, validity, reliability, and generalizability have been used as criteria to assess the quality of research. Validity asks the credibility of the study and reliability refers to the repeatability or replicability of the research. The concept of generalizability means the study can be extended to other cases or settings (Bryman and Bell, 2007; Collis and Hussey, 2009; Silverman, 2000). However, qualitative researchers question whether those concepts are applied to qualitative research and

135 demand different criteria to assess the quality of qualitative research (Bryman and Bell, 2007).

Creswell argues that “reliability and generalizability play a minor role in qualitative inquiry” (2003, p. 195). In support of this, Lincoln and Guba mention that “since there can be no validity without reliability, a demonstration of the former is sufficient to establish the latter” (1985, p. 316). In qualitative research, the concept of validity can be known by different terms such as rigor or trustworthiness (Golafshani, 2003). To test the validity of qualitative research, triangulation has been accepted as a typical strategy (Golafshani, 2003; Patton, 1987; Yin, 2009). Patton (1987) and Yin (2009) suggest four triangulation methods; data, investigator, theory, and methodological triangulation.

To achieve validity for this research, interviews with both producers and consumers of independent music in South Korea were conducted. This was to achieve a balanced perspective of the phenomenon being studied and not to be overwhelmed by a particular perspective of particular groups of people. The indie music in South Korea is strongly associated with the area around Hongik University in Seoul. This area is the centre of the independent music industry in South Korea. For this reason, interviews were conducted with the record labels whose offline business activities, such as concerts, are located in that area. In addition, there are three more universities around that area. Therefore, the main consumer group of the area is university students in their 20s. Therefore, this consumer group should have been the focus of the research. In addition, secondary materials such as research reports, books, statistics, and news articles helped us to understand and articulate the context and objectives of the research. However, it would be naïve to accept that the accumulation of multiple data sources would offer a single reality and truth. The aim is to achieve a detailed understanding about the study that “adds rigour, breadth, complexity, richness, and depth to any inquiry” (Denzin and Lincoln, 2005, p. 5) rather than an “objective representation” (Moisander and Valtonen, 2006, p. 25) of the particular setting.

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To achieve reliability, questionnaires for semi-structured interviews with consumers and representatives of independent record labels in South Korea were developed. The questionnaires for both parties were developed based on the theory explored while reviewing literature and objectives of the research. In addition, the understanding about the existing literature and knowing the research objectives helped to focus on the main aims of this research while doing interviews, rather than be swayed by each interviewee’s subjective interest. Yin (2009) also advocates that having a case study protocol that consists of different features such as case study objectives, procedures, or questions is a way to achieve reliability. He argues that “the protocol is a major way of increasing the reliability of case study research and is intended to guide the investigator in carrying out the data collection from a single case” (2009, p. 79; emphasis in original).

As this is qualitative research, the primary data using semi-structured interviews was collected from a relatively small numbers of participants, than for quantitative methods such as surveys. In this regard, the problem with generalizability occurs. The issue with generalizability is one of the principal criticisms about the limitations of qualitative research. However, the quality of qualitative research is not entirely dependent on whether qualitative findings are generalizable or not as “many qualitative researchers actively reject generalizability as a goal” (Schofield, 2002, p. 173). This is because the key aim of qualitative research is to offer an in-depth understanding and rich description of the phenomenon being researched (Schofield, 2002). Moisander and Valtonen argue that qualitative research that typically focuses on small samples is “unlikely to be statistically representative of any larger populations” (2006, p. 28). Mitchell (1983) also argues that the validity of qualitative research depends on the quality of analysis rather than the sample size.

The aim of this research is to achieve an in-depth understanding about value and the value creation of popular music in the digital age of the independent music sector in South Korea, rather than seeking for generalisation of the research findings. The objective of qualitative research is not to generalise to populations but rather to achieve analytical generalisation (Yin, 2009). Mitchell argues that “the validity of extrapolation depends not on the typicality or representativeness of the case, but

137 upon the cogency of the theoretical reasoning” (1983, p. 207). Moisander and Valtonen (2006) suggest it is an issue of transferability that allows readers to make connections between a study and their own experience. Thus, the in-depth case study will allow readers to have vicarious experience and make connections with their own particular experience.

5.6.2. Case Study

According to Yin (2009), a case study is a research method used to investigate real- life and contemporary events using multiple data sources such as documentation, archival records, interviews, observations and physical artefacts. Hartley states that a case study “consists of a detailed investigation, often with data collected over a period of time, of phenomena, within their context. The aim is to provide an analysis of the context and processes which illuminate the theoretical issues being studied” (2004, p. 323).

The appropriateness of adopting the case study approach depends on the nature of the research, which is derived from the research problem and the objective (Ghauri and Grønhaug, 2010). As the objective of this research is to obtain a deeper understanding and evaluation of the impacts of the Internet and digital technologies on the music industry in South Korea, it was felt that the case study strategy would be beneficial as it would offer more than just simple explanations. Hartley points out that “the case study is particularly suited to research questions which require detailed understanding of social or organisational processes because of the rich data collected in context” (2004, p. 323). In addition to this strength of case studies, Cavaye adds that “it allows for the study of a large number of variables and different aspects of a phenomenon, while these need not have been previously determined. Case research is valuable in developing and refining concepts for further study” (1996, p. 229). However, Cavaye also describes the following weaknesses of case studies: “It is not possible to generalise case research findings statistically to a population. During case research, one has no control over independent variables and this may limit the internal validity of any conclusions. Also, case research may establish relationships between variables, but cannot always indicate the direction of causation” (1996, p. 229)

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Although methods such as ethnography do not engage in theory development before data collection, in a case study, a theory and a strong understanding of the study are essential to the research design process, regardless of whether the research is aimed at testing or developing theory (Hartley, 2004; Yin, 2009). According to Yin, it is vital to have an adequate understanding of the theory related to the research, as “theory development does not only facilitate the data collection phase of the ensuing case study. The appropriately developed theory also is the level at which the generalisation of the case study results will occur” (2009, p. 38). Moreover, Perry points out that “some prior theory can have a pivotal function in the design of the case study and analysis of its data. Pure induction might prevent the researcher from benefiting from existing theory just as pure deduction might prevent the development of new and useful theory” (1998, p. 789). Moreover, “it is unlikely that any researcher could genuinely separate the two processes of induction and deduction” (Perry, 1998, p. 788).

Therefore, this research is not oriented towards either pure induction or pure deduction but is a combination of both approaches. The understanding of the relevant theory was achieved by reviewing a broad range of literature on marketing, popular music studies and media studies. The literature on marketing offered an understanding of value, value creation and co-creation. That on popular music gave an understanding of the production and consumption of popular music. Lastly, reviewing cultural and media studies provided knowledge of cultural production and consumption in the digital age.

The choice of a case was based on purposive sampling. Silverman asserts that “purposive sampling allows us to choose a case because it illustrates some feature or process in which we are interested” (2000, p. 104). The reason that the independent music sector in South Korea was chosen as a case was that the literature (e.g. Baym and Burnett, 2009; Byam, 2012; Pfahl, 2001) suggests that independent musicians and labels are more open to have relationships and interactions with their fans using social media, and independent music fans are eager to communicate with and offer

139 support for the musicians they love. In addition, there was also an issue of accessibility for domestic major record labels. Graham et al. (2004) also point out the difficulty of accessing international major record labels.

5.7. Data Collection

Qualitative data can be collected in various forms and from various sources, including documents (e.g., news articles and research reports from government bodies), observation, focus groups and interviews (Bryman and Bell, 2007). For this research, interviews were conducted with independent record labels and music consumers. In addition, secondary data were collected in order to provide an overview on the music industry in South Korea.

5.7.1. Secondary Data

Secondary data directly related to the research context were collected, including news articles, archive records, reports, seminar notes, journal articles, research papers and books. This provided an understanding of the music industry in South Korea, the development of digital music, and the history of independent music in the country. The data were collected with a focus on the issues of this research. The collection process involved repeated searches on the Internet and materials gathered from South Korea. The presentation of the issues raised by the secondary data will be supported by interview data as needed.

5.7.2. Primary Data: Interviewing

The primary data were collected using semi-structured interviews. The flexibility and reflexibility of this approach, during the data collection process, allows the researcher to amend the questions asked and reflect upon the interviewees’ perspectives (DiCicco-Bloom and Crabtree, 2006; Bryman and Bell, 2007). Therefore, there is a greater emphasis on the interviewee’s perspective, rather than looking for natural laws. As Warren notes, “the purpose of most qualitative interviewing is to derive interpretations, not facts or laws, from respondent talk”

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(2001, p. 83). The epistemological concepts of interviewing are described using two metaphors, one of a miner and one of a traveller (Kvale, 2007; 2008). The concept of the miner is to do with the “process of knowledge collection” (Kvale, 2007, p. 19), that of the traveller the “process of knowledge construction” (p. 19). These ideas together illustrate the data collection and analysis process using a qualitative method (Kvale, 2007; 2008).

In order to collect data, one must first identify appropriate respondents. As this research consists of a case study of the independent music industry in South Korea, it was felt that hearing from both record labels and music consumers would offer a balanced perspective on the production and consumption of music. Thus, the approach would provide information about people’s thoughts and experiences. To collect the required data, it was necessary to choose interviewees from independent record labels, and music consumers actively involved in digital music consumption and the so-called ‘indie’ music scene.

Defining what indie music is, and drawing a line between it and major music, are difficult to achieve and require a great deal of discussion. For this research, potential participants were selected from among small record labels located or involved in the Hong-dae area, where many local music clubs are located, and which is known, among the media and the general public, as a place for independent music. Before contacting them, a list of independent record labels was drawn up using the book Indie Labels in South Korea (2009), and the websites of the Seokyo Music Labels Association and Sangsang Madang’s Label Market. The list contained a diverse range of independent music labels (or music labels actively involved in the Hong-dae music scene). Before contacting the labels, I visited their websites or social media webpages to check whether they were still in business and to identify contact details. Then, I sent e-mails to them with a brief explanation of the research. Ten record labels agreed to participate in the research (see Table 5.4). One respondent from each record label participated in the interviews, except for two record labels where I interviewed two members of staff. In total, twelve interviews were conducted. The labels were very small, some operated by just one or two members of staff. The owners were mostly involved in every aspect of the business. Therefore, it was

141 difficult to interview more than two members of staff from any one record label. Six of the participants were directors or producers of the record labels and the majority of the participants had managerial responsibilities. Some of the labels were founded and operated by musicians, some of whom still perform as musicians. In terms of elements of their specific business size such as turnover, the interviewees were not open to disclosing information. In addition, it was also very hard to find secondary materials about the information.

Table 5. 4. Interviewees from the record labels Years in Record Interviewee’s Year Music Genres Label Position Established Industry A Vice President 14 Rock, Folk etc 1998 B A&R Chief 14 Rock, Pop etc 2006 C Director 9 Rock 2010 D President 10 Hip-hop 2010 E CEO and Producer 22 Rock 2011 F Director 17 Rock, Pop etc 2006 G President 18 Pop, Jazz etc 2005 H President Less than 1 R&B, Rock etc 2012 President 7 I Rock, Folk etc 2005 Digital Media 2 Manager 11 J Rock, Folk etc 2011 Member 8

To conduct interviews with music consumers, it was necessary to recruit interviewees who had knowledge about independent music in South Korea. Finding individual independent music fans was not easy. To overcome this issue, a viable option was to find South Korea indie music related communities and contact their key members. I searched for online communities or projects manually using portal websites such as Naver, Daum and Nate (based in South Korea) and Google. The portal websites in South Korea offer services to their members that make it easy to create online communities or personal blogs. Therefore, searching each portal

142 provided different lists of music-related communities or blogs. Searching for terms such as ‘indie music’ produced hundreds of independent music-related communities. It was possible to narrow down the lists using different options, such as number of members, date established, ranking, popularity, total number of posts and number of recent posts. In addition, the lists of communities gave a very brief explanation of each community using key words or one to two sentences. Accordingly, inactive communities and musicians’ or record labels’ own communities were eliminated. As a result of this process, indie music-related online communities or projects and personal blogs were identified. I sent emails or online messages to various communities or projects. Table 5.5 shows that five communities/projects agreed to participate in the interviews. In addition, from my own personal contacts, I arranged interviews with one group (of three people) and two individuals who were long-term indie music fans (see Table 5.5). The ages of the interviewees ranged from the late teens to the 40s. Seven participants were university students. Some had jobs in the creative industries, such as journalism, publishing, media and fashion. The number of interviewees in the group interviews was normally two or three people, and the total number of participants was 18.

Table 5. 5. Music consumer interviewees

Year Numbers of Community Gender Age Jobs Features Established Interviewees Footwear Male 30s Online rock Community industry 2003 3 music A Male 40s Salesman community Male 30s Salesman Male Local Community University music and 2008 3 Female 20s B students culture Female supporters Publishing Female 30s industry Music Community University 2008 3 Female 20s concert C student organizer High school Male 10s student Video Music

producer video Project A 2009 2 Male 20s University filming and

student sharing

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Broadcasting Podcast industry Project B 2011 2 Male 20s production University

student

Primary school Long-term Group 3 Female 20s teacher indie music fans General University Consumers students University 20s Long-term Individuals 2 Female student indie music 30s Journalist fans

As the interviews were semi-structured, different pre-developed interview questionnaires were prepared for the record labels (see Appendix 1) and the music consumers (see Appendix 2). For the record labels, the interview questionnaire was structured into four parts. The interview questionnaires were developed based on the research questions and the understanding of the literature review. It was developed in order to examine the consumers’ engagement with music and the non-economic values they create and share in the digital age. In addition, it was developed to find how the record labels utilise social media and what their perspectives of their consumers and their relationships with them are.

The first part of the questionnaire for the record labels was developed to gain a general understanding and historical contexts of independent music in South Korea. It was also to facilitate the initial interview process. The second part questioned the impacts of the Internet and social media on their business. This was to investigate how record labels utilise the media and how they have relationships and interact with their consumers. By asking these questions, it would allow insight into their daily practices that contribute to value co-creation with their consumers and how they value their relationships with consumers and the consumers’ activities such as sharing in the digital space. The forth part asked their business relationships and mapped the value creation networks with other businesses, such as digital promotion or content production companies. However, while conducting the interviews, it was found that some labels cannot afford to form business relationships and do not pay

144 much attention to such relationships. Moreover, even though they have such relationships, some interviewees were reluctant to share them.

The interview questionnaire for the consumers also consisted of four parts. The first part of the questionnaire for the music consumers was to learn their knowledge about independent music in South Korea and to understand their consumption experience and stories of it. This was developed to initiate the interviews, which then share in- depth contexts of their music consumption experience. This led the focus to their engagement with independent music, which was not a big concern at the start of the interviews. The second and third part consisted of questions to investigate their music consumption in the Internet age. In addition this section aimed to analyse how they use social media to experience and consume music. The next part was to understand what sorts of practices they undertake while experiencing music. By asking these questions, this offers the diverse non-economic values of music which participants create and share individually and collectively. The last part was developed based on Arnould et al. (2006)’s suggestion to see the validity of their concept and to have empirical understanding. By asking the questions in the last part, we were able to learn how community members are involved in resource integrations such as emotions, knowledge, or competence that contribute to the continuity and management of the communities.

During the interviews, some additional questions emerged, such as “can you describe the different characteristics of various social media forms and how those differences influence your actual use of them?” During the field work, I encountered a specific issue with interviewing, involving the wording and interview skills. As the questionnaire was initially prepared in English, it had then been translated into Korean. However, some of the questions were not understood so I had to ask them again using different wording. After the first two or three interviews, this improved as I had refined the questions and developed the skill to ask questions in different ways.

The interviews with the record labels and music consumers were conducted between March and April 2012 in Seoul, South Korea. The interviews lasted between 35

145 minutes and 2 hours and 30 minutes, typically taking around 1 hour and 15 minutes. All interviews were digitally audio-recorded and the oral consent of the interviewees was obtained (in terms of ethical issues).

5.8. Data Analysis

After completing the interviews, transcripts were produced and read several times to promote familiarity with the data before analysis. Since interviews were conducted in South Korea, data analysis was conducted using transcripts in Korean. Only quotations needed for the thesis were translated into English. The transcripts were imported into and analysed by using the qualitative data analysis software, NVivo, (Bazeley, 2007). The interview data from the record labels and consumers were analysed separately. This enabled me to compare and contrast each set of views and perspectives on the various issues about independent music and music production and consumption in the digital age.

To analyse the data, qualitative data analysis was regarded as an appropriate strategy. Dey (1993) suggests that the core aspects of qualitative data analysis are categorizing data and then connecting the categories. The categorization and connection needs to be done in an analytic way as qualitative analysis requires not only describing but also interpreting the phenomena being studied. According to Dey, “Description lays the basis for analysis, but analysis also lays the basis for further description. Through analysis, we can obtain a fresh view of our data. We can progress from initial description, through the process of breaking data down into bits, and seeing how these bits interconnect, to a new account based on our reconceptualisation of the data. We break down the data in order to classify it, and the concepts we create or employ in classifying the data, and the connections we make between these concepts provide the basis of a fresh description” (1993, p. 30).

Qualitative analysis involves a circular process of describing, classifying and connecting (Dey, 1993), as described below:

Description

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The first step in qualitative analysis is to provide comprehensive descriptions of the phenomenon under study (Dey, 1993). This is known as thick description, as opposed to thin description that merely gives the facts (Denzin, 1989). Dey argues that thick description “encompasses the context of action, the intentions of the actor, and the process in which action is embedded” (1993, p. 31). In this phase, I was able to provide an analysis of the historical change in the music industry in the digital era and the emergence of independent music in South Korea. In addition, I analysed critical incidents in the development of digital music and the introduction of independent music into the broader society.

Classification Classification involves breaking the data up into bits and categorizing these bits before putting them back together. The act of categorizing can also be called by different names, such as coding and indexing (Mason, 2002). The data themselves act as the basis for the analysis by the researcher, and require interpretation and explanation. Through classification, we can make comparisons and find similarities. The classified categories can be subdivided and subsumed into existing categories, or new categories can emerge (Dey, 1993). This process should be guided by the research objectives and questions and also has to be grounded in the data (Dey, 1993; Mason, 2002). This helps the researcher to develop a conceptual framework. By selecting key themes from the background theory and then exploring the themes within the research context, the scope and coverage of the data can be shown, and the data used to support the explanation and interpretation constructed.

Connection According to Dey, “description and classification are not ends in themselves but must serve an overriding purpose, namely to produce an account of our analysis” (1993, p. 47). In this step, the dissected data must be put back together, and the categorized data can then be analysed through the emerging patterns and connections. The important issue is “how (or whether) the blocks interact to produce a building” (Dey, 1993, p. 47). Putting pieces back together or making connections between categories or themes should be based on the research objectives and the theories explored in the literature. This is an iterative process between theory and data (Dey,

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1993; Mason, 2002). From this process, the ideas explored when reviewing previous research and existing materials can be refined, which may encourage the production of new perspectives. Dey comments, “qualitative analysis requires dialectic between ideas and data. We cannot analyse the data with ideas, but our ideas must be shaped and tested by the data we are analysing” (1993, p. 7).

Based on Dey (1993)’s suggestion, I started analysing the qualitative data gathered whilst doing interviews using NVivo 9. Initially, after selecting one exemplary interview, I conducted a pilot analysis and gained competence in the use of the software and the process. After conducting the pilot analysis, I discarded this to begin a full-scale analysis of the data. As mentioned in Section 5.6.2, data analysis was also guided by both deductive and inductive processes. Perry (1998), who has argued that for any researcher, it would be difficult to genuinely separate the processes of induction and deduction, also mentions that “pure induction might prevent the researcher from benefiting from existing theory just as pure deduction might prevent the development of new and useful theory” (p. 789).

Some unexpected findings emerged while analysing the data, as Sections 7.2 and 7.3 show. Though it was planned to ask interviewees about their independent music consumption and perspectives on independent music, their rich descriptions were quite unexpected. As such, this inductive process allowed the exploration of more literature addressing consumer research, particularly consumer culture theory. On the other hand, the analysis of the data for music communities was based on the existing categories developed by Arnould et al., (2006), although specific sub-codes were gleaned from the data.

The author had some ideas of higher level themes, in terms of consumers’ engagement with the Internet and social media and the record labels’ utilisation of social media. The codes were developed while analysing the data, and the existing codes were created, and when some of the codes looked related, these were grouped under a higher-level of code that depict the lesser codes. When it was required, the existing codes or groups were discarded and new ones were created. New codes and groups were always compared and contrasted with existing ones. Therefore, it was

148 an iterative process based on constant comparison (Glaser and Strauss, 2008). For instance, at the early stage of data analysis, the findings presented in Section 8.3 were grouped under one theme—the advantages of social media—that included several codes: ‘cost reduction’, ‘promotion’, and ‘connecting with fans’. However, further analysis specified that the theme contains different aspects, such as ‘motivation of using social media’ and ‘effects of social media’. As such, it was necessary to regroup codes and develop new ones. By constantly comparing codes and recalling the research objective, Section 8.3 was finally coded and grouped in its present form. The example of codes in NVIVO is available in Appendix 3.

5.9. Conclusion

This chapter has described qualitative and quantitative research and the characteristics and limitations of each. It has presented the selected research topic, approach and design and explained why they were chosen. The selection of an appropriate research strategy was based on the research questions and objectives. The research topic provided initial guidance for developing the research methodology. Justification was given for adopting a qualitative approach to examine the issues of this research.

The chapter then described how the qualitative data were collected through interviews with small record labels and indie music audiences in South Korea. The qualitative data analysis method used to analyse the interview data was also described. In addition, secondary data were collected in order to gain an understanding about the music industry in South Korea. These secondary data will be presented in the following chapters. They were gathered from various sources, including published books, magazines, news articles, seminar notes and research reports.

In this research, the hope is to achieve not simply a look at the relationships between the variables and quantitative evidence but a deeper understanding of the phenomenon being studied. The processes used to focus on and interpreting what the participants and said were imbued with the inferences drawn from the reviewed

149 literature and theories. By carefully listening to and interpreting their thoughts, experiences and opinions, it is hope that this research will offer a different perspective on the research topic, regarding the value of music in the digital age and its implications for the actors involved, namely music producers and consumers.

The following three chapters will present the research findings. The next chapter will offer an overview of the music industry in South Korea, independent music in the country, and the impact of the Internet on the country’s music industry. This will mostly make use of the secondary data, although some interview comments will be included as necessary. Chapter 7 will show why and how independent music audiences in South Korea consume local independent music, their attitudes to independent music and the ways in which they use digital media and technologies to experience and share music. In addition, the chapter will demonstrate how indie music communities are organized and the participants’ experiences of organizing and participating in them. Chapter 8 will discuss the impacts of digital technologies and media on small record labels. It will also offer a view of how they engage with the technologies and the difficulties they face in utilizing them.

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Chapter 6. The Music Industry in South Korea

6.1. Introduction Chapter 4 suggests that the music industry that we see today was developed in the 1900s when US and European companies’ businesses were already operating on a global scale. US companies started doing business in Korea in the early 1900s but Japanese record companies dominated the music market in the country, which remained under Japanese colonial rule until 1945. Therefore, this period from 1900 to 1945 can be seen as the beginning of the music industry in Korea. The music industry started under difficult social and political circumstance, and relationships between social and political events continued throughout the century, such as during the military regimes from the 1960s to the 1980s and the economic crisis in the late 1990s. Thus, explanations of the development of the music industry and popular music culture in Korea cannot be separated from such events.

Since the late 1990s, the music industry in Korea has experienced significant transformations in terms of the production, distribution and promotion of music, as has been the case in most other countries. The impacts of digital technologies such as MP3 and file-sharing programmes were critical, due to the diffusion of high speed Internet access (Kim and Yang, 2010; KISA, 2012). As a result, Korea was the first country where sales of digital music surpassed physical sales. While the music industry was transitioning from physical to digital media, the production and consumption of popular music began to be dominated by teen pop and dance idols. The record labels and talent agencies dealing with pop idols became systematized and the fans of idols became organized. Both evolved into powerful forces in the music industry in Korea.

In counterpoint to the dominance of idols, an independent music industry and culture emerged in the late 1990s. Although its fresh music experiments and distinctive culture were able to gain media coverage and some public interests, it failed to become a critical act within the music industry and remained in a marginal position. Independent music emerged again in the late 2000s, attracting attention from media

151 and public. Some musicians and record labels were able to gain popularity with music audiences.

This chapter will examine the development of the music industry in Korea from the early 1900s to the present day. It will also discuss the emergence and present status of independent music in Korea. Firstly, it will show the development of the music industry from the 1900s to the 1990s, before the invention of digital music. In that section, critical incidents, including the introduction of various media forms and historical events that affected the music industry and popular music culture, will be discussed. It will be argued that, although the production and consumption of music was affected by continuing social, political and economic turmoil, the value creation of music was not entirely controlled by the government or these critical events. Secondly, this chapter will discuss the development of digital technologies and the music of idols. In this section, the transition to digital music will be examined and the dominance of the idol music system will be investigated. The section will also argue that the value of music in the digital age is co-created through the participation of audiences and the integration of other digital and creative industries. Thirdly, the emergence and meaning of independent music will be examined. In addition, this third section will investigate the recent re-emergence of this music culture, and the various reasons behind it, such as the development of the Internet, digital music services and media coverage.

6.2. The Development of the Music Industry in South Korea: 1900s - 1990s

6.2.1. The Emergence of the Music Industry: 1907 – 1945 The recording industry in Korea was started by two US companies, Colombia in 1907 and Victor in 1908. At this time, SP (short play) records were the dominant medium through which to produce and distribute music. During most of this period, Korea was under Japanese colonial rule (1910 ‒ 1945), and it was Japanese record companies who dominated the recording industry from 1910 onwards. Inevitably, the Japanese popular music style influenced the formation of popular music in Korea. A musical genre known as ‘trot’, influenced by Japanese popular music, became a

152 dominant popular music style in 1930 and still exists as a genre of popular music in Korea. Western popular music was flown in through Japan in the 1930s (Shin et al., 2005). Music was produced in Japan and then distributed in Korea because, under Japanese colonial rule, Koreans did not have the freedom to pursue modernization (Kim, 2012a).

The first record label established by a Korean (in 1933) was Okeh Records (Picture 6.1) but the production still took place in Japan. In this period, the general public could not easily afford gramophones or records due to high prices. Instead, they tended to listen to recorded music in music shops, cafes or at public concerts where records were played. The most common way to experience music was to attend shows that were a mixture of an opera, a musical and a soap opera (Shin et al., 2005). However, in 1926, a song called ‘Glorification of Death’ by a female singer, Yoon Sim-deok, was released and gained huge popularity, making it the first hit song in the history of the music industry in Korea (Cho, 2011). Ironically, the popularity stemmed from a tragic event; the singer and her lover, a married man, committed suicide by jumping off a ship while returning from Japan. The sensational story told by the press attracted the public’s attention. Sales of gramophones and records increased due to the number of people who wanted to hear the song (Jang, 2012). Just two years later, a news article about ways of maintaining gramophones and records highlights how wide their diffusion had become as a form of home entertainment (Dong-A Ilbo, 1928).

Picture 6. 1. The early trademark of Okeh Records

Source: culturecontent.com

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Picture 6. 2. Lyrics that came with the record ‘Glorification of Death’

Source: Korea Record Archive Research Centre

In 1927, a radio broadcasting station, JODK (now, KBS, Korean Broadcasting System), was founded to disseminate popular music. By the 1930s, the production and sales of records had increased significantly. A news article in 1933 reported that the annual sales volume of records was predicted to reach 2 million (Dong-A Ilbo, 1933). Jang describes this era before the liberation from Japan as “the golden era of records” (2012, p. 29). In this period, the record labels were already conducting modernistic means of promotion, such as producing booklets for new releases and selling records at a low price in order to gain a competitive advantage over competitors (Jang, 2012). Although this period was historically bleak, there were always talented people, people who saw business opportunities and demands for culture and entertainment.

6.2.2. The Formative Period of the Music Industry: 1945 to the early 1960s In 1945, the first record to be recorded and produced autonomously in Korea was released by Okeh Records. After liberation from Japan, several record companies were established in different cities, including Seoul (e.g. Korea Records), Busan (Corona Records) and Daegu (Orient Records). However, record companies had difficulties producing records due to a lack of resources in terms of finance, materials and machines, and technical skills. The records were not properly produced. Recycled records and converted machines for pressing oils were used (Choi, 2012b).

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In this period, printed songbooks and live shows such as the musical troupes that performed in theatres were a popular part of the entertainment business (Choi, 2012b). This period was politically and socially unstable, and the people suffered from poverty. Just a few years after liberation, the Korean War broke out in June 1950 and went on until the Armistice Agreement took place in July 1953. As a result of the war, the nation was divided into two: North and South Korea. Between the late 1940s and 1950s, songs that expressed grief over the division of the nation became popular (Kim, 2012a).

Until this period, the record labels in Korea had focused on reproducing overseas records illegally, and producing local popular music. In 1950, the AFKN (American Forces Korean Network), now AFN Korea (American Forces Network Korea), started radio broadcasts and, in 1957, TV broadcasts. These channels became an important source of foreign, especially American, popular music for Koreans. During the 1950s, Korean popular music that was influenced by American music began to appear. In this period, a dance culture emerged and became a matter of social concern (Kim, 2012a). Kim explains the emergence of the dance craze as follows: ‘the hedonistic social tendency expressed by the dance craze can be seen to mirror the public psyche as it struggled to forget the ruination, poverty and despair brought on by the war’ (2012a, p. 25). The war significantly weakened the music industry in Korea but, after the war, an entertainment business catering for the American military was formed and this became the main stage for musicians in the country. The annual earnings of Korean entertainers reached 1.2 million US dollars at the peak of this phase (Choi, 2012b; Shin et al., 2005). Some of musicians who performed in clubs for the American army were able to gain fame with the general public from the 1960s onwards, and this introduced diverse genres such as rock, pop, jazz and folk to the music market.

In 1956, the 10-inch LP (long playing record) was introduced and replaced the SP. In 1962, the 12-inch LP replaced the 10-inch (Shin et al., 2005). According to a video produced by the government at that time, the first factory producing LPs in Korea was established in 1958. According to an article published in January 1958 (Kyunghyang Shinmun), it was expected that the facility, supported by an

155 administrative body of the government, would be producing LPs by March. Another newspaper article (Dong-A Iibo, February 1959) states that the establishment of the factory shows the development of the recording industry, which was still suffering from manual manufacturing techniques at the time. This period can be described as the real beginning of the music industry in Korea, although the record labels were still small-sized companies. Pioneering record labels such as Oasis Records, KingStar Records and Midopa Records (now Jigu Records) secured the technical skills and facilities needed for producing records. These record labels continued to lead the music industry in the 1960s and 1970s (Kim, 1997).

Picture 6. 3. The SP records of Oasis Records and KingStar Records

Source: culturecontent.com

6.2.3. The Emergence of the Modern Music Industry: 1960s – 1970s This period can be defined as representing the emergence of the modern music industry and the rise of youth culture in South Korea. In the early 1960s, several private radio broadcasting stations were established, such as MBC (Munhwa Broadcasting Corporation) in 1961, DBS (Dong-A Broadcasting System) in 1963 and TBC (Tongyang Broadcasting Company) in 1964, and these stations became one of the primary sources of popular music. During this period, FM radio and TV broadcasting began as well, and the market for domestic popular music began to lead the music industry. Mass media forms emerged as a form of political action taken by the military government to propagate their legitimacy and ideologies, namely anti- communism and modernization (Kim, 2012a). The promotion of music through the

156 mass media also became important. In particular, the radio helped records to become one of main cultural and industrial media formats (Choi, 2011b; Choi, 2012a). Radio programmes were very popular with young audiences. Typically, around hundreds letters with song requests were delivered every day, and numerous telephone calls were made to talk with the presenter or request songs (Dong-A Ilbo, 1973). For the young generation, these programmes were a place to discuss their concerns and experience music. They could get comfort, solidarity, closeness and a sense of belonging that was completely unlike what they experienced at home, at school and in society, where they were required to obey strict rules. Thus, they were connected through the media. Radio DJs became important intermediaries of popular music.

In addition, the significance of the emergence of TV cannot be ignored as it opened up the era of video and became one of the primary sources of entertainment. In the mid-1970s, the cassette tape was introduced. The new medium had a significant impact on the recording industry, as tapes and tape players were easy to carry around. However, at the same time, due to the technology’s ability to allow recording, many illegal reproduction manufacturers emerged. It also offered a possibility for music audiences to produce their own ‘mix tapes’ to record their favourite music and share it with friends or lovers.

In 1968, the Sound Records Act was proclaimed. The purpose of the legislation was to regulate music that was thought to harm public morals and prevent the illegal reproduction of foreign records. It was also introduced to improve the quality of popular music and as a foundation for the development of the music industry in Korea. The harm caused by the illegal reproduction of records had already been recognized by the early 1960s. Several news articles from the time report the illegal reproduction of records from countries such as the US, Italy and Japan. The most significant implication of the illegal production was its negative effects on the domestic music industry, which was still in its infancy. As a result of the legislation, record labels wanting to produce domestic music were required to be registered and to have facilities for recording and pressing. Record labels wishing to import records were required to obtain licence permits from the government. The first registered record label was Jigu Records, one of the two dominant actors in the domestic music

157 market, the other being Oasis Records. Around a dozen companies were registered just after the proclamation of the law. In 1969, the record label Sung Eum signed a formal licensing deal with Decca in the UK. After that, several local record labels in Korea signed licensing contracts with foreign record labels to distribute popular and classical music (Kim, 1997; KOCCA, 2005).

Small record labels that could not afford their own facilities produced records by borrowing names of registered record labels. These individual production companies, which were also called ‘PD (production) makers’, rented facilities from registered companies, and produced and distributed the records themselves. According to an article published in 1970, there were fifteen registered companies and approximately fifty PD makers at the time (Kyunghyang Shinmun, 1970). These small and unregistered record labels were often regarded as innovative forces in the music industry in Korea. For instance, King Records produced soul and rock records produced by a legendary musician, Shin Joong-hyun, and Orient Production produced several modern folk and folk rock records (Choi, 2012a). However, the small production companies were also regarded as a primary barrier to the development of the music industry, as some of them focused more on illegal reproduction, often copying whole albums or producing compilations of hit singles.

Meanwhile, a censorship system for popular music operated from 1962 until its complete abolition in 1996. Different forms of censorship were applied to judge the appropriateness of scores, records, broadcasts and album jackets. It was widely used to oppress freedom of expression from the pre- to the post-production stage. The control of popular culture was intensified when a purification campaign targeting popular music began around 1975. In the 1970s, TV became a popular medium, along with the radio. With the diffusion of these mass media forms, not only the government but also practitioners in the music industry, such as producers and composers, called for the censorship of popular music. Much music that was regarded as damaging to social morals was prohibited for public performances, distribution and sales. The ban covered all forms of decadent and lascivious music, including songs about sadness and farewell. This was applied not only to newly released music but also to music that had been released before the campaign.

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Another big scandal in the entertainment industry followed, known as ‘the marijuana crisis’. In the 1970s, cannabis, which was known as ‘happy smoke’ at that time, became a social concern as its use was spreading among high school students but there were no proper regulations to control it. From late 1975 to 1976, over one hundred celebrities were jailed and prohibited from engaging in any sort of commercial activities until 1979. However, it is now understood that these arrests were the result of a political decision by the dictator, Park Chung-hee, who wanted to strengthen his regime. He wanted to oppress socially critical music such as rock and folk, and youth culture. Thus he used social purification policies to politically and compulsorily control social change and cultural movements. The production, dissemination and value of music were thus decided by the government and not by the public, the record labels or the musicians.

However, not all forms of creativity and culture disappeared. In particular, a youth culture was born in the 1970s. This generation was represented by acoustic guitars, blue jeans and draft beers, which were symbols of youth in the 1970s, and often at the centre of discussion and criticisms of the generation. Modern folk music, influenced by American folk music, was a dominant form of expression for the young generation in the 1970s, unlike the standard popular music and ‘trot’ of the 1960s. At first, people sang music adapted from foreign pop songs; then singer- songwriters such as Han Dae-soo and Kim Min-gi appeared. It was university students who led the rise of the youth culture. They were a post-war generation, influenced by Western culture and American liberalism (Cha, 2012; Kim, 2012a).

Just as they were interested in a different musical genre than the previous generation, so they pursued a different society and different dreams. They stood against the industrialization of the society and social norms, and sang about nature, humanity, freedom and the utopian dream. Kim points out that “these folk songs did not express an explicit political attitude toward society, but instead reflected their own passive resistance through a refusal to be included within the framework of the prevailing society” (2012a, p. 40). However, people defined the era and the folk music as political and resistant to the suppressive government. Some folk songs were

159 widely used during protests calling for democratization. One of the most popular protest songs was ‘Morning Dew’, the debut song of Yang Hee-eun. She later mentioned that, “although it was not a composer’s intention, in the end a song belongs to the people who sang it” (Lee, 2006). Although the acoustic music boom could not be sustained due to the marihuana crisis, musical expression became a part of musical culture, and this theme reappeared on several occasions, such as in the protest songs of the 1980s that were popularized by the group Noraereul Channeun Saramdeul (People Seeking Songs) (Kim, 2012a), and in the acoustic music syndrome that started in 2011 and has mainly been led by folk musicians who initially performed in the 1970s.

During this period, music cafes and live venues were popular locations for young people to frequent. At the music cafes, audiences could request music, and there were also live performances. In addition, the music cafes had diverse programmes such as special lectures and writing contests. Some of the DJs at the music cafes later became important figures in the music industry, such as radio DJs, radio producers and music critics (Choi, 2012a). Many modern folk musicians performed at the music cafes. Live music venues were popular places where people went to listen to live bands and dance. In 1960s, places called live music salons were popular and in 1970s, go-go clubs were places to listen to live music for young audiences (Shin et al., 2005). The first such club was Nirvana, which opened in 1971.

Picture 6. 4. An advertisement for the club Nirvana

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For musicians, places where they could perform represented their key sources of income at this time, rather than recording contracts (Choi, 2012a). For young audiences, these cafes and clubs satisfied their need for music and culture, and to socialize with their peers. However, the places did not last long due to government regulations and the emergence of a new musical genre, disco. Due to the marihuana crisis, a new cultural phenomenon, song competition festivals for college students, emerged. The first one, called the ‘Campus Song Festival’, began in 1977 and was produced by MBC.

Picture 6. 5. The first Campus Song Festival’s record, a live recording

Public reaction to the song festival was phenomenal. Record labels had to compete for the right to produce the live recordings of the shows. Several festivals produced by broadcasting stations followed. Records of the live events were produced and winning musicians often obtained record deals. Although these events were led by major broadcasting companies, they provided avenues for the youth generation to express their creativity and for the public to experience the music of emerging acts. In addition, the new generation of musicians became an important resource for the music industry.

The young generation enjoyed a relatively more stable society than the previous generation had, and thus hoped for a better society. They were the first generation to have mass media forms, Western culture and an emerging and existing musical culture. These audiences can be defined as the first wave of the youth culture movement in South Korea.

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6.2.4. The Period of Growth in the Music Industry: 1980s – 1990s In this period, the music industry experienced continual ups and downs. The industry itself had suffered from the recession in the late 1970s and this continued into the early 1980s. Due to the recession, numerous leading record labels and PD makers went bankrupt (Park, 1981). The recession was caused by issues external to the music industry, such as the slowdown of economic growth, the political instability caused by the assassination of Park Chung-Hee on the 26th of October 1979, the military rebellion on the 12th of December 1979, the military coup on the 17th of May 1980 and the pro-democracy movement in Gwangju on the 18th of May 1980. Thus, the era of the 1980s in South Korea began in chaos, with a number of unexpected events. There were also internal issues going on in the music industry at this time, such as the prevalence of pirate records. However, generally, the size of the music industry increased significantly in this period. The number of record labels went from just over a dozen in the 1970s to more than a hundred in the 1990s (Kim, 1997).

In this period, the music industry went through several important transitions. According to Kim (2012a), after democratization in 1987, the cultural industries began to be driven by capital and the markets, unlike in the previous periods when they were led by political decisions and the policies of the military regime. The first transition began in 1988, when the major overseas record companies that had previously engaged in licensing deals with domestic record labels opened branches in Korea, starting with Warner Music. They began to distribute their records through their own branches, either directly established through their own investment or through joint ventures with domestic companies. This represented a major concern for the domestic record labels that were significantly smaller than these major multinationals. The domestic record labels were concerned that the foreign companies would eventually dominate the music market and that the domestic firms would become branches of the global companies. This concern intensified when the global companies began to produce local popular music. However, in the end, it was the emerging domestic companies, by seeking out future talent that were able to gain success. Meanwhile, the global companies focused on short-term returns through producing compilation records, ignoring long-term plans and failing to invest in

162 local popular music markets and new artists. The foreign companies were unsuccessful in the music market due to their lack of concern for the development of a local music culture and their failure to understand the local music market and audiences.

The second transition occurred when Korean conglomerates such as SKC (in 1987), Samsung (in 1992), Hyundai (in 1993) and LG (in 1993) entered the music market. They pursued vertical integration in the music industry, operating businesses not only engaged in the production of music but also in distribution, R&D (research and development) of new media formats, and broadcasting (Kim, 1997). However, these conglomerates soon began to withdraw their interest in cultural industries. By 1999, they had pulled out of the industry altogether. As with the global record labels, the conglomerates had sought short-term returns rather than making long-term plans that might have contributed to the development of the culture and entertainment business and their own success. The Korean conglomerates were under-prepared and lacked sufficient understanding of the music industry when they entered the market.

Thirdly, in the 1980s, a different type of PD maker emerged. These small-sized agencies took charge of producing and marketing records, in return for advanced payments from the record companies. Meanwhile, the record companies took charge of sales and distribution. However, there were two main problems with this system. Firstly, the advance payment was not considered an investment but a loan. The agency and the record company were constantly seeking one big success. Secondly, musicians, session players, songwriters and producers were not paid based on the sales of a record but via a fixed pre-payment before the record was produced. This discouraged the development of new artists and diverse musical experiments under the system. However, this was the dominant contractual form and a critical issue in the music industry in South Korea. These three transitional events show that record companies alone cannot produce value in music. It is produced by diverse actors in the music industry, such as the staff of record companies, musicians and audiences.

In December 1980, colour TV programmes began to be broadcast and soon had a significant impact on the music industry and the public. As a result, musicians could

163 no longer rely solely on their vocal skills and were required to be competitive in terms of visual aspects such as dancing and fashion. The production of music videos began. Young people became fanatical over visual effects. Along with dance music, the pop ballad also became a popular genre. At this time, ‘fandom culture’ also emerged. Cho Yong-pil was the representative artist of the 1980s, able to cover diverse musical genres from Korean traditional folk music to rock, and gained popularity from both the young and old generations. He was the first musician to have a massive fan base among teenaged girls. Female teenaged fans were termed ‘oppa budae’ (a squad of teenage female fans).

The record labels recognized the need for systematic management and marketing strategies to capitalize on the new phenomenon. Thus, the star-making system in the music industry in South Korea began in earnest. Diverse music magazines appeared and disappeared at this time, none of which still exist today. These magazines offered not only music-related information, but also a way of connecting with other musicians and fans. One music critic remembers how, through the correspondence column of one of the most influential music magazines of the time, ‘Monthly Popsong’, bands and offline music clubs could be formed (Sung, 2012). Radio programmes were still an important media format for music fans and youths. The CD was introduced in 1986. The format for music consumption was moved from LPs and cassette tapes to CDs and tapes (Kim, 1997). From the early 1980s, personal cassette players (e.g. Sony’s Walkman) became a popular medium for listening to music among the young generation.

According to Cha (2012), the era of the 1980s can be defined by the rise of popular culture and the public opinion of it. At this time, two different desires co-existed: the desire for democratization and the demand for popular culture. The popular music market, too, was divided by these two desires. The central force behind the desire for democratization was college students, and folk music represented their voice. The demand for popular culture was expressed by teenagers who listened to the ballads and dance music that dominated the mass media. In addition, nightclubs where underground musicians and DJs performed were frequented by the young urban working class (Cha, 2012; Kim, 2012a).

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With diverse media through which to experience music, along with the economic development and social and political stabilization that took place in the 1990s, the public’s demand for culture increased, and the young generation, especially teenagers, became the most important consumer group in the music market. In the 1990s, the number of record companies almost doubled, not only because of the increased demand for culture, but also because the demand diversified and markets became segmented. In particular, the youth market was segmented finely into different age groups, such as early, mid- and late teenagers, and people in their twenties (Cha, 2012). The technological developments, the increase in the demand for popular culture and the rise of the star-making system that had begun in the 1980s came to full effect in the 1990s. The young generation of the 1990s no longer suffered from economic poverty. This was not an era of political thought, ideology or unity; rather, it was an era of popular culture, consumerism and diversity. The young were allowed to express their individual identities and differentiate themselves from one another (Kim, 2012c). The table below illustrates the power and importance of the younger generation, especially teenagers, for the music industry at this time.

Table 6. 1. The items of the biggest expenditure on culture in 1997 (%)

Records Books and Videos Age (incl. tapes magazines Movies (incl. Others N/A and CDs) (incl. rental) rental) 15-19 27.2 42.2 11.6 10.8 5.6 2.6 20-29 13.6 37.1 21.8 15.7 6.6 5.3 30-39 10.4 44.2 8.4 15.5 9.4 12.0 40-49 4.7 42.2 2.6 7.9 14.2 28.4 50-59 4.8 24.4 4.8 5.2 10.8 50.0 Over 60s 3.1 17.0 2.5 1.9 11.4 64.2 Source: MCS, 1997

The table shows us the items of biggest expenditure on culture within each age group. The statistics show that teenagers and those in their twenties were the biggest consumer groups when it came to popular music.

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The younger generation in the 1990s were termed sinsedae (new generation) and their identity was questioned and discussed actively. One newspaper, Dong-A Ilbo, published a weekly series of articles discussing the generation over a period of eight months in 1993. The articles covered various subjects, including language, identity, their view of value, culture and consumption habits. The generation was distinguished from corresponding age groups of the 1970s and 1980s and understood to have contrasting images. On the one hand, they were depicted as people who were confident with self-expression, had self-esteem and were good at expressing their personalities. On the other hand, they were also criticized for being very consumption-oriented and egocentric. This new young generation was one of the most discussed social and cultural phenomena of the 1990s and became the most powerful consumer group of the time (Kim, 2012a; Cha, 2012).

The rise of a new young generation was not a completely new issue. Rather, it can be seen as having been hidden or disallowed for political and social reasons in the 1970s and 1980s. In those periods, there was little room for discussions of micro- issues such as a specific social groups or individual issues. Those issues would have been covered by grand and macro social and political issues, such as democratization and economic development, because national and societal concerns were more strongly emphasized than individual issues before the 1990s. For the young generation of the 1990s, what they wore, ate and experienced were important matters and consumption was thought of as a way to express identity. Popular music was no exception. Just as college students in the 1980s had expressed their desire for democracy through folk music, dance music became a symbol of teenagers in the 1990s.

Seo Taiji and Boys represented teenagers’ desires in this era, causing a sensation from the moment of their debut in 1992. They released four albums between 1992 and 1995 and all of them sold over one million copies. Their music, a mixture of dance, hip-hop and rock, was new and unorthodox. The group was the most successful act of the 1990s, but it broke up and the band members declared their retirement in 1996. However, Seo Taiji returned as a solo artist in 1998, and two other members became producers. Although it was not their intention, their success

166 brought about a considerable transition of the music industry (Kim, 2012a). Dance music and groups that were teen idols began to dominate the music market. Local record labels and talent agencies such as SM Entertainment, YG Entertainment and JYP Entertainment, armed with the corporate management system, emerged. Under the corporate management system, idols were trained and produced, and fan bases were formed and organized by the record companies (Kim, 2012c; Kwon, 2011; Won, 2012). Companies like SM Entertainment became leading organizations in the music industry and a force behind the K-pop phenomenon of the 2000s.

6.3. The Rise of the Digital Age and the Pursuit of Globalization: 2000s

6.3.1. The Rise of the Digital Music Market During the 1990s, the music market in South Korea had increased significantly, reaching sales of 400 billion Korean won. The market plummeted when South Korea experienced a severe economic crisis in December 1997 that led to a call for a bailout from the IMF (International Monetary Fund). The industry soon recovered as the nation’s economy began to recover from the economic crisis. However, since then, the record industry has been suffering again due to the rise of the Internet. Figure 6.1 shows the varying size of the record industry in South Korea, from 1995 to 2010

Figure 6. 1. The size of the physical music markets, 1995-2010, billion Korean won

500 404 410 410 379 380 373 400 353 286 300 183 200 138 108 84 78 81 80 82 100

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: KOCCA, 2005, 2011

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Figure 6.2 shows the significant increase in the digital music market, which includes mobile and Internet music services. The chart shows that the focus of the music market has been moving towards the digital market since the start of the 2000s. The size of the digital music market surpassed that of the physical music market for the first time in 2003.

Figure 6. 2. The size of the digital music market, billion Korean won

Source: KOCCA, 2005, 2009, 2011

The global music industry has also shown a similar change (See Figure 6.3).

Figure 6. 3. The size of the global music market, million US dollar

Source: KOCCA, 2012

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PWC (Price Waterhouse Coopers) (2012) reports that the transition of the music industry from physical to digital music will continue and it is expected that in 2016 the digital music revenues will exceed those of physical music.

Due to the transition in the music market from physical to digital media, the number of distributors and retailers decreased (see Figure 6.4 and 6.5). Record shops are hard to find these days and recent surveys suggest that around 70% of people do not buy records in tape or CD format (see Figure 6.6).

Figure 6. 4. Number of distributors, 2000 to 2004

Source: KOCCA, 2005

Figure 6. 5. Number of retailers, 2000 to 2004

Source: KOCCA, 2005

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Figure 6. 6. Number of people buying records, %

Source: KOCCA, 2010

With the rise of the Internet, digital music services appeared. The most notable services were Bugs Music, launched in 1999, which offers a free streaming service, and Soribada, which started in 2000 and offers a service for peer-to-peer MP3 file sharing. The reaction of the public towards both services was phenomenal. For instance, Bugs Music’s membership passed the 10 million mark in 2002 and Soribada’s membership exceeded 6 million in 2001. However, the reaction of the traditional music industry players was very similar to that in America. They considered the new businesses as a critical threat, rather than considering the new business environment as a transition of the music industry. Lawsuits between the newcomers and the traditional actors began to emerge soon after and continued until the late 2000s. In the case of Soribada, all disputes were completed in 2008. As a result of the lawsuits, Soribada turned its free services into paid services. Their position as a market leader has since been taken over by latecomers that were formerly mobile service providers. However, disputes between digital music services and actors such as record labels and musicians are ongoing due to various issues such as pricing policies for the digital services and imbalances of royalty rates between the two parties.

After the digital music services emerged, they began to dominate the music market in South Korea, and consumers’ consumption of music changed from the physical to the digital format. Since 2002, not a physical single record has managed to sell more than one million copies. Since 2006, no more than ten artists have managed to sell more than a hundred thousand copies in terms of physical sales (see Table 6.2).

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Table 6. 2. Number of physical records selling more than a hundred thousand copies, 2001 – 2010 Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Number of 80 66 27 27 17 9 3 6 6 7 records Source: KOCCA, 2011

During the early years of the digital music markets, up until the mid-2000s, mobile music services offering ring-tones and ring-back tones dominated the market. However, from 2007, the trend changed, as digital services such as streaming and downloading took over. There were several reasons for this change, such as the rise in background music sales from blogs and social media, such as mini-homepage of Cyworld, and Internet music services such as streaming and downloading began to gain acceptance from music audiences. In addition, the number of users of smartphones increased rapidly from 2009 when the iPhone was introduced. The penetration rate of smartphones is more than 30 million (Lee, 2012d), which allow users to access and maintain their music libraries more simply and more easily than before. In addition, the Internet music services offer mobile applications through which users can manage their accounts and download or stream music.

As digital music became the dominant format in the music industry, companies with power and money, such as mobile service providers and portal websites, entered the market. Unlike the first movers, such as Bugs Music and Soribada, which were small-sized enterprises, mobile service providers such as SK Telecom, KT and LG Telecom are subsidiaries of Korean conglomerates. These companies have had symbiotic relationships with domestic record labels and talent agencies such as SM, JYP and YG. Due to these relationships, the mobile service providers could ensure popular content and the labels could have secure distribution (Lee, 2012b).

These companies began to offer Internet music services such as streaming and downloading from 2004. The mobile service providers, who already controlled mobile music services such as ringtones and ring-back tones, soon became dominant actors in the Internet music service markets, while the first movers were dealing with

171 endless lawsuits. They were able to persuade people to use their mobile services by offering promotions such as discounts and by restricting access and compatibility between devices through DRM (digital rights management) technologies until the launch of DRM-free digital music services in 2008. Domestic portal websites also started offering digital music sales from 2003. The discussion about DRM free music was began in 2003 but at that time the reaction of associations for content suppliers such as the Korea Music Copyright Association was antagonistic because they thought that removing restrictions by offering DRM free music would contribute to the increase of illegal file sharing. However, this atmosphere changed after the mobile service providers and content suppliers realised that DRM technology eventually has a negative impact in terms of the increase of the size of digital music markets (Kim and Yang, 2010).

According to KOCCA (2007), after 2006, the digital music business divided into four categories: mobile, Internet (e.g. streaming or downloading), brokerages (of digital music) and content production and supply (e.g. ringtones or ring-back tones). Brokerages acquire the rights of sound sources from right holders and act as intermediaries to distribute the sound sources. Content production and supply only covers music services for the models of mobile phone that existed before smartphones. Therefore, it does not include smartphone application services. These sales are included with Internet music services. Due to this transition in the digital music market, sales of mobile and content production and supply have consistently decreased. On the other hand, sales of Internet music services and brokerages have increased. Table 6.3 shows the change in the digital music market.

Table 6. 3. The size of online music services by category, billion Korean won Year Category 2006 2007 2008 2009 2010 Mobile Music Services 112 103 87 76 55 Internet Music Services 88 166 253 359 453 Brokerages 15 18 39 60 63 Content Production and Supply 138 139 146 72 49 Source: KOCCA, 2009, 2011

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The Internet became one of the most important media for obtaining music-related information (see Table 6.4) and the consumption of music has shifted from the buying of full-length albums to markets for digital singles and streaming.

Table 6. 4. Ways of accessing music-related information, %

Media Books/ Friends/ Internet TV Radio Newspapers Age Magazines Relatives 15-19 52.4 24.3 5.8 0 1.0 16.5 20-24 55.5 29.9 4.4 1.5 0 8.8 25-29 44.4 35.3 3.9 2.0 6.5 7.8 30-34 39.4 40.9 8.8 0.7 3.6 6.6 35-39 24.1 48.2 9.4 0.6 5.3 12.4 Source: KISDI, 2005

According to KOCCA’s Music Industry White Paper, published in 2011, the most common way of listening to music is the television, followed by MP3 players, personal computers and smartphones. In 2010, the most popular form was MP3 players, followed by computers and TVs. The reason for TV’s increased popularity is thought to be the great success of TV audition and survival music programmes. Although audition programmes such as ‘Superstar K’ began to have success from 2009, national TV networks’ survival music programmes featuring well-known singers and musicians, such as MBC’s ‘I am a Singer’ and KBS’ ‘Invincible Masterpiece’, both of which started in 2011, have been able to gain massive success by attracting diverse age groups, including the elderly. More than 80% of people report using Internet music services to download music. To listen to digital music, consumers use a variety of devices, including smartphones, MP3 players and computers. The most common device nowadays is the smartphone.

In the music market, most consumers prefer domestic popular music to overseas music. The Music Industry White Paper 2011 reports that 95.5% people in a recent survey indicated that their preferred type of music was domestic popular music. Figure 6.7 shows the genres of domestic popular music in order of their popularity. The chart shows the dominance of ballad and dance music, with a very small percentage of people preferring indie music.

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Figure 6. 7. The most popular genres of domestic pop music, %

Source: KOCCA, 2011

The presence of overseas major record labels is relatively weaker than for domestic record labels (see Figure 6.8).

Figure 6. 8. Top five record labels in South Korea, billion Korean won

Source: KOCCA, 2012

The top five record labels in South Korea consist of three domestic labels (SM, CJ E&M and Loen) and two overseas major record labels. This figure is based on sales of physical records. The top three positions are filled by domestic companies. CJ E&M could be considered the market leader due to the huge sales of YG

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Entertainment in which they have a partnership. Universal could be in the top 4 due to the stable sales of classic music and some popular domestic musicians (KOCCA, 2011, 2012). The preference for popular music from Western countries such as the US and Europe is very marginal in South Korea (see Figure 6.9).

Figure 6. 9. The preferred popular music genres in 2011, % (N=1226)

Source: KOCCA, 2011

6.3.2. The Dominance of Idols and the Pursuit of Globalization It is impossible to explain the production of music in the 2000s without discussing record companies and talent agencies for ‘idols’. After the breakthrough of the first generation of idols in the late 1990s, the popular music market in South Korea began to rely heavily on teenaged consumers, and the entertainment companies systemized the way they managed idols to create revenue sources. The dominance of idols in the music market has received constant criticism from the press, music critics and the public. The criticisms have included poor quality of music, and poor singing ability. Other criticisms have included the lack of musical diversity and the symbiotic relationships between the talent agencies and the broadcasting companies as idols’ dominance of the music market and the mass media channels has grown. However, it seems that the criticisms are often based on the subordination of dance music and the supremacy of singer-songwriters and rock oriented music. It is not unusual to see reports in the press stating that the success of non-idol music is simply a reaction from consumers who are tired of the dominance of idols. The problem with this

175 approach is the potential failure to see and analyse the production of music and the behaviours of music consumers in the 2000s, because any market phenomenon can be limited to a discourse regarding the phenomenon of idols.

The process of developing idols became systematic through the control of the corporate management system. The representative companies are SM, JYP and YG Entertainment. Unlike the previous generations of record labels that focused on the production of records, these companies operate “all-in-one services encompassing management of singers as well as the production of records” (Kim, 2012a, p. 85-86). Idols begin as teenaged trainees in the companies, recruited in various ways, including auditions. The trainees receive diverse training for several years before their debuts, including dancing, singing, acting and even learning foreign languages such as English, Chinese and Japanese. The training programmes also include psychological counselling and education about etiquette and drugs.

Once an idol group makes its debut, the group is heavily promoted through diverse media channels such as TV, radio and Internet music services. It is very common for the group members to appear in a variety of TV programmes, not just music programmes but also talk shows and reality TV shows. Sometimes, the group may be divided into different sub-groups with different images and concepts for releasing music. For the companies, creating different sub-groups can benefit them, as the members of these sub-groups are already known by audiences so the company can minimize risk and save costs. In addition, the success of the sub-groups can benefit the original group in terms of popularity and awareness, and each member can gain momentum in terms of pursuing their individual careers. Different sub-groups show different concepts and music, allowing fans to experience and enjoy new images of their favourite idol groups.

It is also common for the members of idol groups to pursue individual careers while maintaining their role in the group. They can pursue careers in music, the movies, soap operas, TV shows, radio shows or musicals. This is referred to as a one-source multi-use strategy (Kim, 2012a) and most record labels and talent agencies diversify their revenue sources using this strategy. In a market where sales of records have

176 been slashed, the companies have been seeking new business opportunities in different entertainment businesses, such as the production of soap operas. For instance, JYP Entertainment, which is one of the biggest record labels and talent agencies, recently established a joint investment company with another talent agency. The joint company co-produced a soap opera, Dream High (2011) with another media company, CJ Media. In the soap opera, many members of idol groups managed by JYP Entertainment participated as actors. In addition, the company’s idols participated in the original sound track (OST) of the soap opera.

While big entertainment companies such as SM and YG Entertainment have been expanding their share of the domestic market, they have also been pursuing globalization, particularly in Asian markets such as Japan and China (see Table 6.5).

Table 6. 5. Size of SM and YG Entertainment, billion Korean Won

SM Entertainment YG Entertainment 2011 109.9 78.1 Turnover 2012 168.5 106.5 2011 20.5 17.7 Profit 2012 47.8 21.4 2011 48.0 31.8 Amount of Export 2012 103.6 53.4 Source: KOCCA.kr

From the late 1990s, Korean musicians were able to gain popularity in China and Taiwan. However, the early successes were not based on the strategic approach of record companies. In addition, there were difficulties in the Chinese market, such as the illegal reproduction of records and the Chinese government’s policy of protecting its own culture (Kwon, 2012). From the 2000s onwards, the big entertainment companies began to adopt strategic approaches in order to access overseas markets. These strategies included cooperation with domestic companies, localization of content production, and extensive local promotions. Moreover, they established local subsidiaries in countries such as the US, Japan and China, and organized global auditions in various countries to recruit local talent (Kim, 2012a; Hong, 2011). Nowadays, it is common to see members of idol groups from different countries. They often release music in different languages to facilitate promotion in other countries. The companies collect and produce music from composers in overseas

177 locations such as Europe and the US. The cooperation with overseas experts happens in various creative processes, including stage direction, dancing and styling. Therefore, in terms of the production of contents, the big entertainment companies pursue localization and globalization at the same time.

As has been shown, the big entertainment companies have their own system for scouting out, developing and producing talents, and maintaining their success. In the process, contacting and communicating with fans, not only in Korea but also in different countries, is important. Although their efforts in local markets such as offline promotions are important, the impacts of social media cannot be ignored. According to Kim (2012b), who is the director of a public TV network’s music programme, the success factors of idols in overseas markets are, firstly, the competitiveness of the contents derived from localization and the training system, and secondly, the media strategy, using social media such as YouTube and Facebook. Due to social media forms like YouTube and Facebook, overseas fans who might have difficulty in buying or experiencing Korean pop music can watch music videos and communicate with musicians. With the growing influence of social media on overseas fans, the CEO of JYP Entertainment comments that the company often offers music videos with subtitles in different languages, or produces videos or lyrics in different languages, and analyses data from social media (Kim, 2012b). By analysing such data, they can gain information such as the top viewing countries and about emerging markets.

As it has become such an important marketing tool, the record companies have started an education programme for idols regarding the use of social media and monitor it constantly. They have separate departments to deal with social media, and the importance of using and managing this tool is commonly accepted in the music industry today. One entertainment company mentions that social media marketing accounts for around 40% of all promotion activities (Lee, 2011b). With advantages such as reaching overseas fans and gathering information, the use of social media directly benefits companies financially. The biggest record labels and talent agencies in South Korea, such as SM Entertainment, JYP Entertainment and YG Entertainment, all cooperate with YouTube. As a result, they receive financial

178 returns from YouTube, derived from advertising revenues. Although it is unknown how much revenue YouTube generates for the record companies in this way, Billboard reports that Psy who managed to reach 1 billion views of the song, Gangnam Style, would have earned approximately 2 million US dollars from YouTube as a result (Gruger, 2012). According to the YouTube pages of the big record companies, SM Entertainment has more than 1.9 million subscribers and 840 million views, JYP Entertainment has more than 200,000 subscribers and 49 million views, and YG Entertainment has more than 820,000 subscribers and 450 million views.

Although the companies developed a corporate production system that allowed them to dominate the music market in South Korea, and idol groups have had success in foreign countries, some ethical issues have emerged. Firstly, there are issues with specific terms in contracts, such as the length of contracts and the distribution of profits. This issue has often been criticized publicly by media channels including the BBC (Williamson, 2011), describing the contractual relationships as slave contracts. Secondly, there are issues regarding the trainees. It is reported that there are several thousand trainees and one national TV station has reported that it is nearer to one million (MBC, 2013). The trainees devote a lot of time and effort, from their early teens, and just a handful eventually make their debut record. Therefore, there is a social issue regarding those trainees who fail to become actual idols.

6.3.3. Value Creation in Popular Music in the Digital Age in South Korea In terms of experiencing music, the influence of the mass media networks in producing music programmes centred around teen pop idol music, and their symbiotic relationships with the big entertainment companies that produce the idol groups, have been criticized. In addition, the digital music market has also been dominated by Korean conglomerates (Lee, 2009).

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Figure 6. 10. Market share of digital music services in the first half of 2012, %

60 56

18.5 20 12 9.3 10 3.3 0 Melon Mnet Bugs Music Olleh Music Soribada

Source: etnews.com, 2012

The above figure shows that Melon, a market leader of Internet music services, with around 50% of the market share. It is a part of SK Telecom, which is controlled by a conglomerate, SK Group. In 2005, SK Telecom took over YBM Seoul Records, which was one of the leading music producers and distributers. Mnet offers a music cable TV channel and an Internet music service that has been ranked in the top 3. Mnet is a part of the CJ Entertainment and Media Group (CJ E&M), and is owned by the conglomerate, CJ Group. CJ E&M consists of diverse culture and media businesses, including music, cable TV, film and Internet gaming. Its music businesses include cable TV music channels, an Internet music service, music production and management, live music and musical production. Olleh Music (formerly known as Dosirak) is a digital music service owned by a mobile service provider, KT (Korea Telecom). KT Corporation is a large conglomerate in Korea whose main business is in the information and communications industry, including a landline phone service and broadband service. In 2007, the company took over Bluecord Technology, which provided background music services for shops. Bluecord had a music portal, Muz, and a music production company, Doremi Records. The Korean conglomerates have been pursuing horizontal and vertical integration of the music industry with a view to controlling the music market. In addition, they have been expanding their businesses into broader information and

180 communications industries, including broadband services, Internet TV services and other cultural industries.

However, the experience of music cannot be entirely dependent on the mass media championing dance pop idols, nor is it fully controlled by the big corporations. The power of the mass media and big corporations can decide which music is prioritized over other music, but it is music audiences who decide what they want to listen to. In addition, music can be delivered through different contents or forms, such as games or mobile applications, which are developed by people in other industries. Music audiences can search for music they like, share it with other people and be influenced by others in the digital space.

According to Lee, who examines Korea’s music culture in the digital age, “musical experience becomes increasingly fragmented and dispersed across different media and networks, but more enriched within different leisure and everyday contexts” (2009, p. 495). In the digital space, the value of music is not only embedded in physical or digital formats; rather, the value of music is co-created by the people who experience music and the value creation is networked, including experts in different industries and music audiences. Two themes are critical in the creation of the value of music in the digital age in Korea. The first is self-expression and the socialization of music. This will be explained through the examples of background music and participation in music communities and social media. The second is the networked creation of value. This will be presented using the example of Internet music services and the case of a male South Korea musician, Yoon Jong-shin.

Firstly, the value of music in the digital space is shaped by self-expression and socialization. The first example is the consumption of background music. The background music is a feature to decorate members’ personal web-pages which is called their mini-homepage on Cyworld. Examples of music that the members have bought can be heard by visitors. With the growing consumption of digital music, the consumption of background music for personal blogs or mini-homepages on Cyworld has increased. In 2005, sales of Cyworld’s background music passed the 100 million songs. This was only the second time this had happened globally, after

181 iTunes achieved the same feat earlier. In 2010, the sales of background music exceeded 450 million songs (KOCCA, 2010). This way of enjoying music is not only limited to the individual consumption of music but also includes sharing and social networking aspects. Music can also be used to maintain or develop relationships in the digital space, as music can be given as a gift from one user to another. Users’ music lists on their mini-homepages are there to be listened to by their users or visitors. By using background music, a person can express his/her personal mood and share his/her taste in music. Therefore, the consumption of background music is a psychological expression of the self and represents the socialization of music. The symbolic and economic value of music is created and shared by users of Internet websites. A quantitative study based on the survey data of users of Korean social networking sites, including Cyworld, and blogs on domestic portal websites, shows that self-expression is the most influential factor behind the sharing of music in social media spaces (Lee et al., 2011). The study also suggests that aspects of social identity and social presence, which are affected by the interactivity of social media, contribute to the sharing of music in digital spaces.

The second example is the public’s participation in music communities or social media. Self-expression and socialization are key factors contributing to the proliferation of online music communities and social media. It is now common to see various digital music-related services connected with social media. Due to technological advances, users’ preferences regarding music can be shared through social media. Users can share their favourite music videos or digital music using diverse services such as YouTube or SoundCloud, on social media such as Facebook, Me2day or Twitter, and through mobile messengers such as KakaoTalk. For instance, the massive global hit, Psy’s Gangnam Style, has benefited from social media use by ordinary people. Music audiences also share photos or stories of their favourite musicians. Accessing those digital media channels is now possible whenever and wherever users want, using portable devices such as smartphones or tablet PCs. Music communities cover a broad range of musical genres and styles, such as rock, metal, electronic and world music. The communities are places where participants can share their knowledge of music, learn from other participants and communicate about music with other members. In the digital space, the value of music has

182 snowballed. This participation by ordinary people in communities or social media can create cultural and social trends (KISDI, 2005). Their use of digital media in their daily lives can also create meaningful data for companies, as the producers of idols use data from YouTube. The activities of music audiences, carried out without any economic or commercial intentions, or any consciousness of satisfying their emotions or needs, can benefit content producers and create different dimensions of value in the content depending on whether the value is economic or symbolic. Therefore, the demarcation between producers and consumers is not clear in the digital age of the music industry in South Korea. The value creation of producers and consumers converges and eventually value is co-created.

One recent example is provided by the band Chang Ki-ha and the Faces, who have released two albums on an independent record label, Boongaboonga (BGBG) Records. The band was able to gain popularity as a result of members of an online community, DC Inside, who produced remixed versions of the band’s records. At first, videos of the band’s performances on TV programmes and at festivals were circulated on the Internet. Then, members of the community produced and circulated new content, using the band, including parodies of movie posters, parodied videos featuring the band’s distinctive dancing, and remixed music (BGBG Records, 2009). The phenomenon started by the online community was then accepted by the general public and, as a result, the band gained unexpected, huge popularity as an independent band. It was ordinary people who accepted the content produced by the band, shared it with others, talked about the band, had fun with the band’s original content, and then expressed their own creativity using it. These activities were not a special form of creative expression; instead, these people were having fun in their mundane and everyday life contexts. Therefore, although the original content was produced by the band and the mass media, additional value was added to both the music and the band, created and shared by ordinary people.

Although one example is suggested, this is to present the most successful case in South Korea. In general, The Pew Center for the Internet and American Life suggests that 64 per cent of American teens devote themselves to the creation of content and 39 per cent spread media content (Lenhart et al., 2007). 46% of adult

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Internet users create and post content such as photos or videos and 41% of adult Internet users take and repost content they find on the Internet (Brenner, 2013). As is mentioned in the previous pages, sharing music videos, commenting on music, and communicating with musicians on the Internet and through social media have become dominant activities to share and experience music; people now create and participate in the value creation of popular music by commenting, sharing, and remixing content. In addition, this thesis shows that the demarcation between producers and consumers is not clear and the two parts are converged in the digital age.

Secondly, the value of music is formed through the networked creation of the value of music. Internet music service providers do not only deliver digital music to audiences. These websites have become a place whether diverse music-related information and content, such as album reviews, interviews with artists, the playlists of other users, and video clips are available. This content is created through the participation of a diverse range of actors, such as music industry practitioners, musicians, music critics, video producers and audiences. The Internet music services show that the value of music is not only embedded in the digital format of music; it is also made up of various other services that offer audiences the chance to experience music in various ways. Through these services, music audiences can learn about music, find out what music their favourite musicians listen to, and share their opinions on music. For instance, Naver Music, which is an Internet music service offered by a portal website, creates content along with different actors in the music industry. Their weekly new music recommendation is chosen by music critics and selected music audiences, and their service On Stage offers live performance videos, co-created with video producers. Naver Music has also launched a radio service. Using the service, a user can listen to whatever music they prefer, as the recommendations are based on the user’s preferences regarding specific music genres and musicians.

The participation of different content creators is also helping musicians to create diverse music-related content for fans. One notable example of this is the musician Yoon Jong-shin, who has been engaged in a project called ‘Monthly Yoon Jong-

184 shin’ in which he aims to release a digital single every month. The project started in 2010 and, at the end of each year, he releases an album compiled from the twelve monthly singles, in both physical and digital formats. To promote the project and communicate with fans, he uses social media such as Facebook and Twitter. On the social media, he posts music videos of the singles, makes announcements about the next singles and leave messages about his daily life. He also recently launched a mobile magazine application, which is issued along with each month’s single. The magazine has various contents, such as the musician’s own comments on the month’s single, a comment from the artist who did the artwork for the single, and other works of art by the same artist. Users can also watch a music video of the single. Yoon Jong-shin’s project has been praised as an innovative approach that adapts to the music market in the digital age. It is a networked project that creates value using music, and offer fans different ways to experience music. By producing a single each month, he can keep promoting himself and his music, and thus maintains communication and interaction with fans.

The above discussion shows that the value of music is co-created and that value creation is networked. This is an environment in which the value creation of music is formed through combinations of different contributions: technologies such as social media and mobile devices; content creation by people with different types of expertise other than music, such as video production, digital content production and artwork; and communication and interaction with and between fans, who share the content with others and express their identities and the emotions they felt while experiencing the music.

6.4. The Emergence of an Independent Music Industry

6.4.1. The Area around Hongik University The area around Hongik University has been the centre of indie music from the beginning of the cultural movement. Now, the area is accepted as a synonym for indie culture, including indie music and film. According to Jang et al. (1999), the area was not formed abruptly; rather, it had an artistic and bohemian character due to the presence of fine arts students and graduates from the university. Nearby, there

185 are three other universities. In the mid-1990s, the area became a place where the young generation went (called shinsedae). Jang et al. (1999) point out that the area was formed by a mixture of consumerism, culture and the arts, and the new generation of the 1990s.

The documentary materials also show this phenomenon well. It seems that this district of universities was already recognized as becoming a cultural space for the young generation in the mid-1980s (Moon, 1985). This news article reports that various cultural and arts-related places and events had emerged, and the area surrounding Hongik University was known for the fine arts, containing galleries and ateliers. In 1988, the city of Seoul announced a development plan for the area in front of Hongik University. The plan included the construction of squares and a small park. It also included the development of a street for art, where works of art could be displayed (Rho, 1988). It was a natural step for the area to become a commercial space. A news article in 1993 tells how the place became an emerging commercial space for the new generation in the 1990s, with cafes and shopping centres having been developed (Ahn, 1993). Therefore, this area was initially formed by students from the university, in association with other universities in the district, and then the development plan by the city of Seoul transformed the area, giving it commercial potential. Finally, small businesses that saw the commercial potential, and the young generation that was looking for an exotic place to spend their time and have fun, began to flow into the area. Cultural, political and commercial objectives had constructed the area, and a music culture emerged as a result of the transformation of the area.

This area is still the centre of independent music and culture in Korea. In addition, it is one of the most popular places for young people to shop, eat, drink and have fun. Some would argue that the cultural and artistic atmosphere has disappeared. However, it is still a place where art and commerce coexists. The interviewees from independent record labels also indicated its industrial and regional advantages and features, such as live venues and record labels, and social networks of musicians and music industry practitioners. The regional history plays a critical role in gaining

186 broad social acceptance that the area is for creators and that arts and culture have been at the centre of its development.

However, according to the interviewees, this concentration in one place has also led to its isolation as many people find it difficult to access the area, for example because of distance. Due to this, it is difficult to extend the boundaries of independent record labels’ business activities. Although the area is accepted as a place where one can experience independent music, only a limited number of people can do so. Due to concentration and isolation, local independent music scenes in different cities in Korea have experienced difficult times. Local music culture has been weakened and local musicians have relocated to the area around Hongik University looking for opportunities to perform their music and find success. This is an issue pointed out in the Music Industry White Paper 2011, which explains that more than 50% of the total sales from music industry-related businesses in 2010, including music production, digital music distribution and live music, occurred in Seoul.

To overcome this issue, independent record labels have held concerts in different cities. Some local city councils, such as Busan and Osan, have supported concerts by independent musicians. A movement to develop a music culture in a different district of Seoul has also appeared. This was led by the Independent Music Production Cooperative, which is composed of like-minded musicians and music audiences. The downfall of local music scenes eventually affects independent musicians and record labels, as it makes it difficult to meet music fans in different cities and thus isolates local music fans.

6.4.2. What is Indie Music in Korea? Indie music in South Korea can be defined as the form of popular music created by small-sized record labels or independent musicians who do not necessarily rely on established systems of domestic major record labels or mainstream media channels. Indie music in South Korea is strongly associated with a place, namely the area around Hongik University (Lee, 2010; Shin, 2013). From the 1990s, in the area, live clubs have emerged, bands have played music at these clubs, and small sized

187 recording studios and record labels were established (Park, 2012; Shin, 2013). The area around Hongik University became a central space of indie music, encompassing production, circulation, and consumption (Park, 2012; Shin, 2013).

In media, indie music is often defined as record labels or musicians whose offline business activities such as concerts are centred on the area of Hongik University and who produce music independently. Although independent music is marginalised in the music industry in South Korea, it is accepted as an important music culture that offers diversity and its popularity has significantly increased from 2009 (KOCCA, 2011). Lee (2012b) points out that although its market is very small, independent music in South Korea has its worth, both culturally and industrially. This is because the meaning of independent music has multilateral scopes in terms of musical styles, industrial aspects, and cultural aspects.

Unlike the mainstream music in South Korea, which is dominated by teen-pop idol music, independent music has experimented and created diverse musical styles ranging from guitar pop music to extreme music such as heavy metal. In this regard, KOCCA’S Music Industry White Paper (2012, p. 39) mentions that indie music which started for few enthusiastic supporters became a force leading the trend in the music industry. The independent music sector has tried to establish their distribution system and marketing channels against the mainstream system that has dominated distribution channels and the chains of retail record shops, and major media channels. Due to the distinctiveness of indie music in South Korea, it is often accepted as a musical genre or style. This is shown in record shops or online music services, as they have an independent section for indie music.

Indie music can be defined by various standards, including musical aesthetics, the size of operations, and independence in terms of production and marketing. However, it is a complicated issue. According to Hesmondhalgh (1999), post-punk independent labels emerged with the purpose of establishing their own industry system for producing and distributing music, away from the dominant mainstream music industry. However, this oppositional situation has changed and the relationship between major companies and independent labels has become

188 complementary rather than conflictual. There are also cases of micro-independent labels that have kept their distance from the established music industry and produce grassroots music made by amateurs and semi-professionals based on do-it-yourself ethics (Strachan, 2007).

Shin (2011) admits that it is very hard to define what indie music is, both in Western and Korean contexts, because the meaning of the term can vary and is often contested. The interviewees of the record labels also admit that defining what indie music in Korea is hard as there are various criteria. As Choi (2011a) and Lee (2010) point out, the interviewees from the record labels in this research also argue that the Western case that is discussed above is not applicable in the case of the independent music industry in South Korea. In South Korea, it is hard to describe indie music as a music culture that has stood against the major global music companies, because it has not been the global music companies that have dominated the music market in the country rather it has been domestic major labels. In addition, symbiotic relationships between indie and mainstream music companies only began to occur in recent years in Korea. Although there is some collaboration between mainstream and independent musicians, and some independent music is distributed and promoted by major firms in South Korea (e.g. DOMO of Sony Music Korea), it is not exactly like the western case. The music industry in the West is regarded as a web of major and minor companies (Negus, 1996). However, in the case of South Korea, this is not the case. The relationship between the major record labels and indies in South Korea is not that strong.

As Strachan (2007) shows, there are also musicians and labels in Korea who work according to do-it-yourself ethics. However, the distinction between mainstream and indie has been blurred. It is not difficult to find musicians who are regarded as indie appearing on national TV music programmes. Some independent music records are distributed and promoted by big companies such as Sony and CJ. In addition, musical styles that have been accepted as mainstream music genres are now also produced by independent musicians. There have been collaborations between independent and mainstream musicians. In this context, the term ‘indie’ can sometimes include all musicians other than idols. Therefore, links have emerged

189 between mainstream and indie music. This transition has occurred because independent music has shown itself to be marketable. The mainstream music industry’s attempt to form links with independent music will continue as long as it sees it as marketable. There is also a possibility for independent record labels to become big actors in the music market. Music labels like Happy Robot and Pastel Music have shown this. In addition, the independent music labels have developed and adopted business and marketing operations just like those in the mainstream music industry. Therefore, defining what indie music is in Korea cannot be done through the conventional sense of resistance to the mainstream system and its music. It will require various standards and criteria as Lee (2010) claims that the meaning of indie is continually changing, involving diverse criteria based on changing industrial, cultural, social and technological environments.

6.4.3. The Rise of Independent Music Labels and Culture The independent music culture began to emerge around the mid-1990s in the neighbourhood surrounding Hongik University. Two important events are regarded as representing the beginning of the independent music scene. One was the first ‘Street Punk Show’ near Hongik University and the other the first record produced by an independent label, released in 1996. The record, entitled ‘Our Nation’, was produced by Drug Records, which started out as a music bar, and it was a joint album of two bands, Crying Nut and Yellow Kitchen. 1996 was also an important year for musicians as the censorship system was abolished. This allowed records such as Our Nation, which contained the phrase ‘shut up’, to be released (Kwon, 2011).

Picture 6. 6. The first record produced by an independent label

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The energy of the new culture was already there before this landmark year, however. A punk bar, Drug, opened in 1994 and became a music club, with live performances starting in 1995. According to Jang et al. (1999), in this period, bars where consumers could listen to music, dance and have drinks were popular. Drug was similar except for the fact that it played punk and alternative music. The first show was put on in memory of Kurt Cobain. In terms of the formation of a music culture, music clubs played an important role. There was no distinction between the spaces allocated to performers and audiences, as with a conventional stage. This gave the impression that anyone could play music and express their musical ideals (Jang et al., 1999). The relationship between musicians and audiences was not like the traditional relationship of audiences admiring musicians.

Although the early independent music culture is often termed punk music and culture, diverse types of music were included, such as hip-hop, folk rock, modern rock and avant-garde artistic expression (Jang et al., 1999; Kim, 2012a). From 1996, independent record labels such as Indie, Stoneage Records, Drug Records, Gang A- G Culture and Arts, Cavare Sound and Master Plan emerged. They pursued independence from the established system of the music industry, in terms of production and distribution. The introduction of home recording and production around the year 2000 sparked a rise in the number of independent labels. In 1998, the label Indie established a distribution channel for independent record labels. Before this, they had had to rely on the existing system, the problem with which was their lack of marketability, which meant that wholesalers and retailers were not keen on dealing with the records produced by the independent record labels. To overcome this issue, Indie established a direct distribution channel through a consignment sale with around 200 retailers (Jang et al., 1999).

The emergence of this new form of musical expression was regarded as a new cultural movement and as offering the hope of bringing diverse musical aesthetics into the music market, which was until then dominated by dance and ballad music. First, the media, including newspapers and TV stations, ran stories about the music culture and the area, and then the general public began to recognize the new culture.

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Bands like Crying Nut and Deli Spice featured on the national and cable TV music programmes, and some became popular acts accepted by broader audiences. The perspective towards the emerging culture was a mixture of curiosity, doubt and expectations. There was curiosity about what independent music was, doubt over whether it was sustainable and an expectation that might bring about a new cultural system. However, the media reports were generally positive, describing the culture as a form of subcultural expression against the mainstream music and culture, guaranteeing artistic and creative freedom.

In the late 1990s, bulletin board systems (BBS), on which users can share information and files, became popular in Korea. Several services appeared offering these systems. People created and participated in various online communities. Independent music was one of the subjects featured. Jang et al. (1999) show that the early music clubs had relationships with the online communities; offline meetings of the online music communities were held at the clubs and the online communities became an important promotional space for the clubs. They were places where discussions of music, both in a broad sense and specifically independent music, took place in Korea. In addition, these communities were places where new musical experiments could be fostered, with bands like Deli Spice and Sister’s Barbershop being formed through them.

Although the new cultural phenomenon managed to gain some level of recognition, it was still marginal and remained a subcultural form for a minority group of enthusiasts. This was due to several internal and external problems. The main internal issue was that its size was simply too small to cope in an industry where failure is common. As production costs increased, independent labels had difficulty recouping the costs (Jang et al., 1999). One of the external issues was the strong relationship between the dominant mass media and the mainstream music companies and talent agencies, accompanied by systematic business and management capabilities from the 2000s onwards. In addition, in the 2000s, the entire music industry suffered from a serious downturn, due to a series of events, including the economic crisis that weakened the consumption power of the young generation that had previously been a powerful consumer group, and the emergence of file sharing

192 via the Internet (Shin, 2011). According to Shin (2011), in the mid-2000s, the independent music scene was in a very difficult situation; club audiences were typically no more than a few dozen, musicians had to give up their music careers, and many live clubs could not continue to operate.

The Music Industry White Paper 2011 reports that more than 200 independent labels produced more than 300 albums in 2010. However, the market share has remained at around 1% (Choi, 2011a). In the region of Hongik University, all that remained were the ‘markers of hyper-consumerism – malls, chain stores and international franchises – and what was regarded as the first wave of the indie scene dissipated’ (Shin, 2011, p. 154). As it was mentioned in the section, 6.4.1, consumerism, which was the basis for the emergence of the music culture, ironically brought about the fall of the independent music culture. The difference was that ideas of culture and place based on artistic and exotic feelings, which were once accepted as fashionable, were replaced by featureless consumption and stores.

6.4.4. The Re-emergence of Independent Music There are several possible reasons for the fall of the indie music scene in the 2000s. One is the rapid reduction of coverage from media channels, which lost curiosity and interest in the scene. Another is the lack of breakthroughs of new acts to replace the first generation of indie music in terms of popularity, which consisted of acts such as Crying Nut, Deli Spice and Sister’s Barbershop. Third, there was simply a lack of quality music to attract general public (Shin, 2011).

The indie music scene began to recover from its downturn in the late 2000s (Shin, 2011), although its market share is still very small today. A few artists, such as Chang Ki-ha and the Faces, Sister’s Barbershop, The Black Skirts and Broccoli, You Too? have sold more than 10,000 copies of their records, which is still regarded as a difficult target for an indie act. The importance of indie music in South Korea is partly reflected by the fact that winners of Korean Music Awards, from 2004 onwards, have been dominated by independent music. Most major music festivals in South Korea such as Ansan Valley Rock Festival, Incheon Pentaport Rock Festival and Super Sonic are heavily populated by indie musicians (KOCCA, 2012). It is

193 estimated that there are more than 1000 artists, 150 independent record labels and 100 live music clubs around the area of Hongik University (MCST, 2012). Although accurate numbers of the independent music industry are not available (KOCCA, 2012), it is reported that in 1996, less than ten physical albums in the independent music industry were released. In 2000, more than a hundred physical albums were released. In the mid-2000s, the released physical albums numbered more than two hundreds (Park, 2009). In 2009, it was still around two hundred and fifty. Suddenly, in 2010, it is estimated that more than five hundred albums were released. In 2012, the estimation reached one thousand (KOCCA, 2012). The numbers show that less than 20 years of the history of the independent music sector in South Korea is able to reflect their significant increases.

The Music Industry White Paper (2012) also reports that independent musicians and labels have entered the music markets in different continents. Musicians like Galaxy Express, Apollo 18, Yellow Monsters, Crying Nuts, and 3rd Line Butterfly have been touring in North America. They have performed at music festivals like SXSW (South by Southwest) and Canadian Music Week. In addition, many independent musicians from South Korea have featured in the largest music festival in Japan, Summer Sonic, and their albums have been released in Japan. Recently, a punk band, No Brain, signed with Sire Records, a division of Warner Music. It was reported that the band will release a US debut album.

The rather sudden re-emergence of independent music has attracted the mass media and the general public have begun to take notice. Several reasons for this can be pointed to. Firstly, the latest emergence includes musical styles that have traces of Korean pop music from the 1970s to the 1990s, and lyrics that build sympathy with music audiences. The musical styles of the early indie music scene focused on adopting and adapting Western styles. This was done as a way of demonstrating that they stood against the mainstream music industry and its styles (Lee, 2010; Shin, 2011). However, from the mid-2000s, musicians have begun to appear who admit that their music is indebted to Korean music from previous generations. The musical style of Chang Ki-ha and the Faces shares similarity with the rock and psychedelic music that appeared in the 1970s in Korea. The musician himself has said that he is

194 influenced by that music. In addition, their massive hit single, ‘Cheap Coffee’, has been described as a song that depicts well the broken generation of today. Although the musician himself has continually repeated that this was not his intention at all, young people who have been suffering from the economic recession and the high unemployment rate have made a connection between their sense of loss and anxiety, and his music. Broccoli, You Too?’s music has been described as a rebirth of the music from the 1980s and 1990s in Korea. Epitone Project’s music also recalls Korean’s modern and sophisticated pop music of the 1990s. People who listen to these bands’ music are reminded of the nostalgic sounds of those eras. Their music is influenced by and indebted to past generations of musicians and offers familiarity to music audiences rather than clichés.

Secondly, the media’s influence could be responsible. Music programmes on national TV stations have covered live performances by independent musicians. Notable examples are EBS’s Space Sympathy, KBS’s Lee Ha-na’s Peppermint and Yoo Hee-yeol’s Sketchbook, and MBC’s Music Travel LaLaLa. Due to these programmes, the distance between independent music and audiences may have been reduced. These programmes have become important ways for indie musicians to promote their music. Internet music services have also promoted the music of small labels. Although there is some criticism that there are no visible benefits for independent musicians and only the Internet music services themselves benefit, the content produced by Naver Music, for example, has attracted media and music audiences. Its web service Today Music offers reviews of weekly recommended records, while OnStage provides videos of live performances. Independent musicians are the focus of this content. Most of the recommended music is selected from independent record labels and most of the videos feature musicians from independent labels. Naver also launched the streaming of live music, a service it calls Naver Music On-air. Several independent musicians have participated. When the independent band 10cm performed, almost 50,000 people watched via personal computers or smartphones and around 5,700 comments were left (Lee, 2013).

The third reason may be the rise of well-known independent record labels and their management and marketing systems. The independent labels have experienced

195 difficulties in promoting their music. This is partly because there are not many channels for them to do so. For some musicians, live performances at venues around Hongik University have been the only way to make their presence and music known. Some independent record labels (e.g., Happy Robot) have identified the importance of management and marketing, which has cultivated their effective management as well as marketing channels and strategies (Choi, 2011a). Their recognition of the importance of these aspects also enabled them to expand their markets outside of the independent music scene by allowing them to approach the general public. By doing so, since having begun a few years ago, labels such as Happy Robot, Pastel Music, and BGBG Records have reconceptualised and symbolised independent music. Unlike the early independent music, which was often described as promoting resistance to society and subcultural expression, nowadays independent music is regarded as a cultural form that is relevant to people’s daily lives.

Happy Robot is a part of Mater Plan Music Group along with Mint Paper, Paraid and Master Plan Production. Its business operations include music production, artist management, music publishing, festival production and event production. Pastel Music launched a music distribution company, Brownie Entertainment, in 2011, and a sub-label, Shofar Music, in 2011. BGBG Records launched a management company, Duruduru AMC, and distribution company, Boongboong Pacific (Choi, 2011a). Happy Robot and Pastel Music have benefited from tie-in promotions in soap operas that air on national broadcasting stations, and through TV advertisements. Through these promotions, they have delivered easy listening pop, folk and rock music to female consumers in their 20s and 30s. This musical style has been promoted through a community website, Mint Paper, which offers various services such as information on new releases, interviews with musicians and a web radio service. Successful music festivals such as the Grand Mint Festival are also promoted by the website. The website states that its goal is to communicate with people who pursue modern lives and a modern music style. This is described through words such as cool, trendy and sentimental.

This conceptualization and symbolization of the consumption and experience of music has attracted a broad range of female consumers. This strategy has reduced the

196 distance between music and female consumers in general, who would otherwise have some level of repulsion for independent music, which often used to be described by words such as rebellion and resistance. This audience group are also very active users of personal blogs or social media spaces. It is not hard to imagine that they share their experiences of music with others. They are active buyers of background music for their blogs, and social media spaces such as Cyworld.

In the case of BGBG Records, the record label is regarded as a pioneer of the utilization of the Internet and social media. Utilizing digital communication technologies is no longer an obscure activity. However, BGBG Records is known as a label that has integrated them successfully. The record label is known for trying hard to communicate with fans through such technologies. BGBG Records (2009) says that communication and interaction are key to its survival. The CEO of BGBG Records has more than 12,000 Twitter followers and uses it actively. The CEO described how, after seeing the success of Chang Ki-ha and the Faces, he realized the importance of utilizing the media to attract and communicate with music audiences. However, due to the mass media environment in Korea, which most independent musicians find difficult to access, his concern was how to attract people and expand the market that is concentrated in the area of Hongik University.

Based on these concerns, while utilizing digital technologies, he developed the idea of the cultural tour in Jeju, a mixture of concerts, workshops and touring. Jeju is the most famous island in Korea and one of the most popular holiday destinations. The island is a destination for people who are tired of city life and are looking for new and alternative lives. The Great Escape Tour utilizes the nature of Jeju to attract people who are interested in music, knowledge, travelling and nature. This is a conceptualization and symbolization of independent music as an eco-friendly and enjoyable culture, connecting with people’s desire for new knowledge, and to escape to Jeju.

These examples show the differences between the early and late forms of indie music in terms of where the music and culture were and are located. As mentioned previously, the early music culture can be summed up by words such as rebellious,

197 resistant and subcultural. These were aimed at educating ordinary people and expressing an alternative to mainstream pop music. However, the more recent attempts can be seen as locating their culture and music within the daily lives of ordinary people.

The fourth reason is the development of the Internet and digital communication technologies. Chapters 3 and 4 discussed the use of digital technologies in people’s daily lives. Those chapters also argued that the value of music is co-created by both producers and consumers and that value creation by users can be both symbolic and economic. In addition, Section 6.3 discussed value creation in music in the digital age in Korea. In this section, the topic will be discussed further.

Personal devices and applications have enabled people to access and listen to music anywhere and anytime. This transition was started by Walkmans and CD players. Now, mobile phones like smartphones and MP3 players like IPod grant easy access to music. What differentiates the recent technology from the early devices is that the new technology enables people to connect with each other, and makes music a part of their daily lives (Bull, 2005). This is why music like easy listening styles of music can work as background music in people’s daily lives, while Chang Ki-ha and the Faces offers a fun sound that attracts a broad audience. In addition, music audiences share music in social media spaces which they feel sympathy. The sympathy is sometimes based on very personal matters such as social issues. Music styles like easy listening and sophisticated pop and rock music, and musicians like Change Ki- ha and the Faces have been able to build sympathy with audiences.

The socialization of music has been intensified by social media spaces and online music communities. These are places where music fans gather, share and interact and add value to music. The independent music consumers interviewed for this study explained the diverse ways they are involved in value creation within the music culture (see Table 5.5). The participants of community A are amateur musicians with jobs who have formed bands through online music communities. Community B consists of students at university who are devoted to contributing to the development of a local music culture. To do so, they engage in several activities, including

198 producing a local radio programme. Community C specializes in the production of live music by independent musicians. Project A consists of people who produce videos for independent musicians and share them on the web for free. Project B produces an independent music-related podcast in which they talk about independent music and musicians. They also invite musicians to take part in the podcasts, and include live performances.

The independent music consumers are involved in various activities such as creating their own content (e.g. podcast, music videos or concerts) and sharing this with others. Through the communities, independent music fans gather and interact. As mentioned in the thesis, the value of popular music in the digital age not only indicates economic exchange value but also indicates non-economic terms. In addition, this is co-creational. With the rise of the Internet, value creation by consumers has become easier than before and is now possible without the limitations of time and space. Therefore, value creation in the music industry is not limited by the traditional structure or the scope of music companies. The communities and the independent music consumers in South Korea show that they are part of the value creation of independent music. This means that the value creating space of independent music includes all networks of independent music fans, musicians, and indie labels.

The above cases of the independent music communities in South Korea clearly show diverse forms of value creation in music contributed by audiences. The rise of the Internet and the development of digital technologies has made it easier for them to participate in and create value for the music scene. The utilization of social media by independent labels has also been made easier by the reduction in the cost of making music videos, which used to be unaffordable for independent musicians and record labels. However, with the development of affordable technologies and learning materials on the internet, the cost has been reduced significantly and music videos have become an essential form of promotion for the independent labels. Music videos have also become resources for the users of social media to share and remix, such as in the case of Change Ki-ha and the Faces.

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Another emerging trend is crowd or social funding on the Internet. There is a number of social or crowd funding businesses, such as Tumblbug and Upstart, from which musicians and bands have benefited. The phenomenon is not limited to the production of music but also includes movies, games and the fine arts. Funding from ordinary people enables musicians with part-time jobs to pursue their dreams and it is especially useful in giving unsigned artists the opportunity to express their creativity. In addition, musicians who produce records using funding from these platforms can use them to connect with devoted fans. Moreover, according to a research report of the Korea Culture & Tourism Institute (2011), a key benefit of social funding for independent musicians is that “it is a way to communicate with society” (p. ix). This implies that by using social funding, independent musicians can gain a chance to present their works to music consumers and interact with them.

These reasons explaining the re-emergence of independent music indicate that the music culture has been re-introduced and re-formed. This is not just because of the efforts that have been made by musicians and record labels but also those of various other actors, including Internet music services like Naver Music, Internet businesses such as crowd funding, established media channels and technological developments. Music audiences’ participation and integration in these music-related activities has been another vital contribution. The discussion above shows that content produced by industrial processes, whether music, digital content or symbolization, needs to be shared, interpreted and participated in by people. Through this process, the economic, emotional and symbolic value of music is co-created.

6.5. Conclusion This chapter has shown that the popular music industry and culture in Korea has developed as a result of people with talent and business capabilities, music audiences, technological developments, changes in media forms, and political and social events. From the era of Japanese colonial rule to the 1960s, popular music in Korea was strongly influenced by Japan and the US, with popular music styles from those countries adopted or adapted to Korean tastes. From the 1960s to the 1980s, the military regimes also had an influence on the production and consumption of popular music, in most cases oppressing and controlling it. In the 1990s, there was an

200 economic crisis in the country and a transition to the digital age in the music industry. Although the development of the music industry and popular music culture was affected by tragic events and turmoil, there still existed musicians and music audiences who were looking for new ways of musical expression and new experiences. Due to such people, a unique popular music culture was fostered. In addition, the technological development of the media forms on which we experience music cannot be ignored.

Since the late 1990s, the music industry has experienced a great transition in the production and consumption of popular music due to the rise of digital music. After several years of disputes and legal actions involving general consumers and start-up companies, digital music became the dominant form. In the period of transition from physical to digital music, big companies that were subsidiaries of Korean conglomerates were able to dominate and control the digital music market. With digital music dominating the music market, music management companies and talent agencies focusing on producing ‘idols’ began to dominate the music market in Korea. The companies developed a unique business and management system, and their impact began to spread to other Asian music markets, including China and Japan. The success in other countries was their reward for their pursuit of globalization, which was initiated by the efforts of the record companies and helped by the use of digital media. Digital media enabled them to connect and communicate with fans in different countries and continents. Digital and social media forms became a critical means of promotion for the companies, and provided the companies with information about their current business performance and future emerging markets.

This digital innovation and development has influenced the Korean music industry in general. Although the dominance of the big companies in the digital music market, and of the record companies producing and promoting idols, has been clear, unique music production and consumption has also emerged with the development of digital technologies. Music audiences engage with music to express emotions and creativity, and socialize in the digital space. This is the way people interact with popular music in this age. In addition, networked value creation for music through digital music services or creative people has influenced the production and consumption of music.

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The last section of this chapter discussed the emergence and development of the independent music industry and culture. This section also described the development of the area around Hongik University, which has been the centre of, and synonymous with, independent music in Korea for many years. Independent music that had previously been marginalized was able to gain some level of recognition and popularity from the late 1990s onwards. This was made possible by several actions, and not just the efforts made by the musicians and record labels. For one thing, media interest increased. Secondly, independent music itself repositioned its image from something rebellious and resistant to something trendy that could be enjoyed by people going about their daily lives. Thirdly, with the development of digital technologies, music audiences were able to share the content produced by the media and record labels. Finally, music audiences have become active value creators by participating in music communities or expressing their own creativity.

The history of the music industry in Korea has been discussed, from the early 1900s to the present day, relatively briefly so as to cover the entire span. This chapter has tried to focus on issues surrounding popular music, namely, the development of new media forms, the evolution of the production of music, social change and the ways music audiences experience music. The aim has been to show that the production and consumption of music is co-created by diverse actors and affected by different circumstances. By examining the music industry in Korea, this chapter argues that the value of music is not something that is only produced by record labels. Instead, it is influenced by different actors in the music industry and changes in social, political, economic and technological environments.

This phenomenon is not limited to South Korea. For example, the phenomenon of Susan Boyle was encouraged by users of YouTube whom shared the video clip of the singer. Via YouTube users, the video clip of British TV programme Britain’s Got Talent reached other regions, including Asia. Furthermore, users create content such as podcasts and music videos by using affordable devices (Burgess and Green, 2009). Research suggests that consumers of popular music in the digital age become patrons, supporters, and creative partners (Baym and Burnett, 2009; Wikstrom, 2009).

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In the next two chapters, the interview data will be presented and analysed. Chapter 7 will show the ways music audiences engage with independent music, what makes them share it, and how they engage with digital media to experience independent music. In addition, interviews with participants in music communities or projects will show the ways those communities are organized and maintained. In Chapter 8, data from the interviews with record labels will be analysed. The chapter will demonstrate their motives for using social media. It will also investigate how the record labels are engaging with the technologies. Finally, their difficulties in utilizing digital technologies will be presented. Thus, these chapters will show that the value of music is co-created by audiences and record labels together, in an environment where digital media offer greater possibilities.

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Chapter 7. Consumers of Independent Music in the Digital Age

7.1. Introduction

The previous chapter discussed developments in the production and consumption of music in South Korea. It showed that the production and consumption of popular music is not solely controlled by producers in the music industry. Rather, popular music culture has evolved through interactions between its production and consumption. In particular, the chapter showed that the introduction of new media such as records, radio, TV and the Internet has affected the music industry and the ways consumers experience music. The rise of digital music in South Korea has entirely changed the production and consumption of popular music. The dominant form has changed from physical to digital. Music consumers in the digital age consume music symbolically in ways that allow them to express their self-identity and socialization. In addition, producers in the music industry have expanded the market by cooperating with diverse actors in the creative and digital industries. The independent music industry itself has managed to reconceptualise itself as a culture of daily lives. The digital music market and the Internet offer consumers easier ways to experience independent music and share it with others.

Music consumers experience diverse musical forms in different settings. Consumer research has investigated the effects of music in commercial settings, such as a background feature in advertising, or stimulation to purchase in retail environments. In this research stream, music is understood as a marketing tool. It has tended to be regarded as a component of marketing, rather than being considered on its own terms (Larsen et al., 2010). To overcome this issue, the current research investigates how music is consumed and experienced, and how music consumers create meaning and value by engaging with music and music culture. Therefore, this chapter will look at how audiences of independent music experience music culture and how they are engaged with music in the digital age.

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This chapter will present the research findings from the interviews with consumers of independent music in South Korea. Firstly, it will show the different ways that music is consumed (See section 7.2). The presentation of the results will be divided into two, according to the different approaches consumers use when consuming goods or services, namely information-processing and experiential. The information- processing approach will demonstrate the music consumers’ cognitive activities, and the experiential approach their hedonic and emotional consumption activities. Secondly, this chapter will present the consumers’ attitudes to independent music and culture, which contribute to their continuity (See section 7.3). These attitudes are based on fear and responsibility. Their fear is based on their desire to minimize inappropriateness and responsibility is operated in order to maximize appropriateness of independent music and its culture. Thirdly, consumers’ activities in the digital space are presented (See section 7.4). These activities are categorized as acquisition, relationships and engagement. Each category consists of different types of satisfaction and benefits gained, and practices performed. Lastly, this chapter will demonstrate how music communities and projects in South Korea are organized and how they pool the resources of the participants (See section 7.5). Thus, overall, this chapter will explain both the personal and collective cultural consumption that contributes to the co-creation of the value of independent music.

7.2. The Consumption Behaviour of Independent Music Consumers

The consumption behaviour of independent music consumers can be studied according to two different approaches: the information-processing approach and the experiential approach. These two contrasting approaches look at different criteria in terms of why consumers consume specific manufactured goods, services or cultural products (Payne et al., 2008; Hirschman and Holbrook, 1982; Holbrook and Hirschman, 1982).

In the information-processing approach, it is assumed that consumers use cognitive aspects to decide which products to buy. Therefore, the approach focuses on the utilitarian functions of products, and assumes that the primary goal of consumer behaviour is to gain benefits. To gain benefits, consumers perform goal-directed

205 information search, acquisition and evaluation. The judgement of the consumers depends on past experience, present evaluation and expectations about the future (Payne et al., 2008; Hirschman and Holbrook, 1982; Holbrook and Hirschman, 1982).

In contrast, the experiential approach focuses on the hedonic and psychological aspects of consumption. The approach claims that the traditional way of evaluating consumer behaviour described above is not sufficient to understand it fully. It points out that consumers are also attracted by the feelings and emotional aspects of consumption, such as joy, pleasure and fantasy. The experiential approach is regarded as particularly useful for understanding consumers of cultural products such as arts and popular culture. Unlike the information-processing approach, here consumption is based on different criteria such as ‘how much fun I can have?’ and ‘how much pleasure can I obtain?’ (Payne et al., 2008; Hirschman and Holbrook, 1982; Holbrook and Hirschman, 1982).

The two approaches are complementary, as Holbrook and Hirschman note that “abandoning the information processing approach is undesirable, but supplementing and enriching it with an admixture of the experiential perspective could be extremely fruitful” (1982, p. 138). The explanation of consumption behaviours provides an understanding of value creation and co-creation by consumers. By engaging both approaches, value, as the customer’s creation which “not only accumulates from past and current experience but also can be envisioned in future experiences” (Grönroos and Voima, 2013, p. 137), can be created. In addition, the symbolic value of music, which refers to “consumers’ use of the symbolic meanings embodied in products to construct, sustain, and express their selves/identity and to locate them in society” (Larsen et al., 2010, p. 673), can be experienced.

The findings in this section unexpectedly emerged during data analysis. The rationale for adapting two approaches is to discuss how the consumption of music not only has utilitarian aspects but also contains subjective and non-utilitarian aspects. In effect, using two approaches can show that the consumption of popular music is not only involved in economic and functional aspects but also associated

206 with non-economic terms, such as emotion and experience. Furthermore, this dual approach can also fill the gap in the research of music consumption—for as Larsen (2010) has noted, the post-purchase of music consumption has not been a great concern in consumer research.

Although the classical concepts in marketing, the information-processing and the experiential approach are used to explore the consumption behaviours of the independent music consumers in South Korea, the concepts are not accepted as it is. This is because accepting the concepts as it is would hinder the flexibility in terms of analysing data and may prevent the recognition of important aspects of consumption behaviours of consumers in South Korea. Although the idea of the concepts is used, the sub-themes of each section (7.2.1 and 7.2.2) emerged and developed while analysing data.

7.2.1. Information-Processing Approach

Evaluation (Shaping Cultural Tastes) The music consumers interviewed for this research demonstrated that their consumption of independent music was based on evaluation. This can be categorized as an analytical response to music, as Lacher and Mizerski (1994) note. They indicate that “the analytical response to music reflects the listener’s engagement in the objective, logical examination of the music” (p. 368). This could be based on satisfying their own distinctive tastes for music, or comparisons with the mainstream music scene, which is dominated by the tastes of teenage boys and girls. It could also be based on simple reasons such as the fact that as they were getting older, as passionate music consumers who used to be devoted to the mainstream teen pop idol music, they now had difficulty accommodating their feelings and thoughts in that sort of music. Therefore, their evaluations were shaped and reshaped on the course of their journey to find their musical tastes and the devaluation of music that did not fit with their standards. However, their evaluations do not appear to be based on an unconditional worship of independent music or a disregard for mainstream music. Interviewer: Do you consider indie music to be better than mainstream music?

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Interviewee: I don’t think that way. But I think that indie can be better than any other mainstream music. However, it depends on what kind of indie music it is. … Because there can be indie music (which lacks) in terms of authenticity or completion. (Individual interview, 20s, a university student)

Some respondents mentioned that the music style and lyrics they preferred could mostly be heard in independent music and that mainstream music was more limited in terms of themes and musical genres. Comparisons with mainstream music to express the superiority of independent music were quite common from the interviewees. Such evaluations are commonly associated with independent music creation, as one university student in her 20s (Community C) argued: “Most mainstream culture these days is an agglomeration of the idol culture. They don’t write music. They can learn while they have their career as an idol. Although they can learn how to write music, I don’t feel there is depth. … I give great credit to lyrics and melodies based on people’s own experiences, emotions and thoughts …”

This argument is based on the interviewee’s view of music production. Several other respondents agreed that independent music is self-produced, without any obstacles that might reduce the musicians’ creativity and authenticity. The respondents therefore believe that indie music is based on the musicians’ own experiences and thoughts, unlike mainstream music, which is produced by someone other than the performer.

A long-term independent music lover in her 30s (a journalist) expressed similar thoughts: “Mainstream music needs to have good outputs, such as good sales, as they invest a fortune. Therefore, it needs to evoke sympathy from the broader public. It can be misleading but it would be difficult to touch on very detailed themes. Firstly, in terms of themes, it is safe to sing about love stories, sad love stories, and these are the dominant theme. On the other hand, in terms of independent music, there is no purpose to satisfy. It is just, ‘let’s sing and perform about stories that I or you know’ so it can be very peripheral and detailed. Although it can be biased, it can be beneficial as it can reflect listeners’ own personal experiences and sympathies.”

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Her comment indicates that independent music production can be beneficial as the musicians can reflect and express their own distinctive feelings, imaginings and real- life experiences, unlike mainstream music which generally targets the broader public. This emphasis on the independence of music production offers feelings of authenticity and autonomy from corporate-driven music such as teen pop idol groups.

Investigation (Cultivating Cultural Consumption)

This aspect involves the music consumers actively searching for music they like. This happens for two reasons: the listeners’ passion for music and the circumstances of the music market in South Korea. Firstly, these people are generally passionate music fans. Enthusiastic music fans search for music they prefer. If they get into one musician, they can end up listening to other music from their label. They often go on the Internet looking for new music and information such as new releases, new artists, unnoticed music and music concerts. They are sometimes involved in online music communities and use social media to gain and share music and music-related information. This active search for music often means they put emphasis on the activity of discovery and music they discover themselves. One female respondent (20s, a university student) at a group interview confessed, “I really love music that I find myself. Music that other people give to me does not stay in my mind, even if it is good.”

Another male interviewee (Community B) explicitly talked of his active engagement with music and dissected other people’s music consumption. He mentioned his CD purchasing habits and deep investigations of artists and labels. For him, music listening was an independent activity but he expressed concerns that, for others, it was not. To expand his music experience, he told of how he had developed social connections with peers who shared his passion for music. In their social circle, they could share and cultivate their knowledge of music: “I have realized from acquaintances that they don’t listen to music to listen to music itself. Rather listening to music is to kill the time on a bus to go somewhere. I haven’t seen that music consumption is an objective itself. For me, I play

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music at home to only listen to music. … When I see them I have thoughts that whether they would like music. … So I communicate with few people who like music. … With them, we talk about music we like and recommend music for each other.”

These activities of searching for music are what Arsel and Thompson (2011) regard as field-dependent cultural and social capital. According to them, cultural capital can take embodied forms such as knowledge of indie culture and its history, institutional forms such as having careers in the music industry or gaining recognition in the consumption field, and objectified forms such as record collections. Social capital refers to weak and strong social ties used to access the resources of the indie culture. Through social capital, enthusiastic fans can have a sense of belonging.

Secondly, their searching for music is related to the way independent music is treated. The interviewees mentioned that it is not easy to hear independent music on the major broadcasting stations in South Korea. It also scarcely features on the mainstream-dominated digital music chart, which is the easiest way to experience new and popular music in the digital era. A female interviewee (Community B) asserted, “the independent music [market means] that if you didn’t search for it, you would never know it was there”.

Benefit Seeking (Learning about Different Worlds)

The interviewed music consumers identified benefits to be gained from independent music, such as having fresh and different perspectives of the world. As various respondents mentioned, independent music deals with various themes. Thus, these consumers recognize that they can learn from the music they experience. It can impact on the way they live their life and the way they see the world.

For some, listening to music is only a means to avoid the noise surrounding them, and to support other activities such as exercising, reading, sitting in cafes or

210 commuting. However, for one respondent, in her 30s, from Community C, listening to music is not a mere activity in her daily life: “Everyone would have different reasons but there are various things to learn from music, which can be stimulating. Music is an obvious material like air. It can suggest directions in terms of how to live. It includes aspects such as encouragement and comfort… Listening to music is like learning by reading a book; there is space to sort out and develop my thoughts.”

It is clear that this respondent regards the activity of listening to music as important as other activities such as reading books, and believes that it offers her intellectual stimulation.

Another male interviewee in his 10s (Community C) also offered his thoughts on this issue. He stated how is initial fondness for independent music came from its directness of expression. He explained how unexpected expressions within lyrics of independent music inspire his thoughts. Thus, his experience of music leads to an expansion of his thoughts and imagination. He also explained how he has learnt about diverse ways to express feelings and emotions from music.

Although the above activities can be categorized according to the information- processing approach adopted from past consumer research, these music consumers should not only be depicted as rational buyers or utilitarian goal-driven consumers. Rather, they are cultural producers pursuing consumer sovereignty as they are not dictated to by the codes or styles produced by market institutions (Holt, 2002). This form of music consumption is different from what Adorno (1990) describes as cultural consumption directed by commodities produced by corporate machines.

The above findings of section 7.2.1 depict a journey of music consumption of the independent music consumers in South Korea, comprising the shaping of cultural tastes, the cultivation of cultural and social capital and learning about different worlds. This journey is not a linear process but rather an interlinked circular process. This process of music consumption coordinates with the hedonistic consumption of music, which will be discussed in the next section 7.2.2.

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Lacher and Mizerski mention that “music consumption is the act of listening to a piece of music” (1994, p. 366). If the above activities can be thought of as ways in which the music consumer performs “the act of listening to a piece of music”, the next section will show a different form of music consumption, which can be regarded as communicating with a piece of music.

7.2.2. Experiential Approach

Empathy (Building Intra- and Inter-subjective Emotion) In consumer research, sympathy and empathy are differentiated, although they do have similar meanings. Sympathy occurs when a person recognizes someone’s feelings but remains at some distance from those feelings. Empathy, meanwhile, is defined as follows: “people who experience empathy completely forget their own personal existence by sharing the feelings of the characters” (Escalas and Stern, 2003, p. 566). The Online Oxford English Dictionary defines empathy as “the ability to understand and share the feelings of another”.

During the interviews with the independent music fans, empathy was recognized as an important part of the experience of music consumption. Several interviewees mentioned the importance of lyrics that they could understand, and feeling the same way as was expressed in the lyrics. In indie music, they did not find popular themes such as the exaggerated love stories of popular music. Instead, they found stories about ordinary people, and things that could be experienced in daily life. One female participant (30s, a journalist) told of the emotional sharing she experienced, evoked by listening to music with her friends. She also mentioned that the stories in the music were sometimes very similar to her own conversations with friends. In this sense, she is suggesting that the value of indie music lies in its honesty. Interviewee: What is the attraction of indie music?

Interviewee: Honesty? Honesty. … What I first felt from indie music was that the lyrics of the music are very honest. The dialogues we have in daily life appear. On the other hand, there are uncommon words too. But, if we think again, sometimes while we have a daydream or, in our imaginations, you know, what we call distracting thoughts? They make lyrics or a concept for an album from words we would speak

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without any meaning, like distracting thoughts. Some say it is diversity but I regard it as honesty which doesn’t consider decency or social formality.

The respondents in their 20s and early 30s from Community C also commented that independent music reflects their feelings about difficult issues in society well, in terms of unemployment, economic depression and anxiety about the future. They cannot resist music that depicts events as they are in real life, and every day concerns. The emotional experience they have when they listen to it makes them imagine they are not the only ones who feel that way, and as a result they gain consolation and encouragement.

Pleasure (Having Inter- and Intra-subjective Enjoyment) It seems that most of the respondents gain great enjoyment simply from listening to music. Music can offer joy and fun, and is a central activity in their life. Lacher and Mizerski (1994) point out that some of the most gripping responses to experiencing music are emotional responses such as joy, rage, sadness or love. Such emotion can be experienced in different ways.

Firstly, some interviewees stress the joy of ‘aliveness’, in other words, the feeling of being truly alive. This covers two aspects: the sense of aliveness of the music itself and the music fans’ own sense of feeling physically and emotionally alive when they go to music concerts. Consider, for instance, the following quote from a group interview: “The reason why I love music clubs is that it is very close to the stage. … I can watch them singing very closely and I can listen to music together with close friends. It feels like I breathe together in the atmosphere by my ears and eyes.” (20s, a university student)

This feeling of aliveness experienced in music clubs and halls offers them different meanings to the joy and fun gained from listening to music on personal devices, such as mobile phones and personal computers. In research into clubbing, Goulding et al. (2009) suggest that pleasure comes from different sources, such as the architecture and design of clubs, sound, light, touching and dancing. The aliveness of music was

213 a reason for many of the interviewees’ initial captivation with independent music. One interviewee in her 20s (from a group interview) recalls the moment when she was first attracted to live indie music: “It was when I became a secondary school student. I was walking along a street, when I had the opportunity to watch a live performance by a band. … The moment I saw it I felt ‘this is it’. … So I searched the Internet to see whether there were any other concerts by the band. And I checked for posters while I was out walking along streets. So, I went to a music club for the first time.”

As for the music fans’ sense of being physically and emotionally alive when they are at music concerts, there are various ways and reasons to experience and participate in music concerts. For instance, some fans go simply because they enjoy having drinks with their friends. Some are happy at being able to watch the musicians they love. Some fans go to concerts to release physical energy by using different physical movements such as dancing or moshing. Sometimes, the purpose of listening to and memorizing music is to maximize enjoyment at music concerts.

Secondly, some respondents identified another source of enjoyment gained from independent music: the musicians are open to communicating with their fans. A musician with a small fan base is better able to recognize their fans in both on- and off-line situations. The rise of digital communications media has also facilitated close interaction between musicians and fans.

The third source of enjoyment is related to the activity of discovery which was mentioned in relation to information processing earlier. Through discovery, music fans can experience enjoyment as they feel that they have found unnoticed and unknown musicians. It offers them a feeling of having found hidden jewels that no one else knows about.

Fantasy (Imagining Self Through Music) The consumption of fantasy has been identified in various commercial settings, such as mountain men (Belk and Costa, 1998) and Star Trek fandom (Kozinets, 2001).

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According to Belk and Costa, such fantasy settings “evoke playful activities and attitudes and create a climate of escape, pleasure, and relaxation” (1998, p. 220). Cohen and Taylor (1992) comment that fantasy is everywhere. We can situate ourselves in different times and roles through fantasy. It blurs the lines of everyday predictable life. In the case of independent music fans, it might satisfy their desire to become musicians, which is difficult in reality. Unlike superstars on TV, with whom ordinary people cannot have a sense of closeness, independent musicians seem to be people one might be able to get to know and become close to. Through watching their performances, the fans feel that they could become like them, and thus gain vicarious satisfaction.

Another aspect of fantasy consumption in independent music is formed through the images produced by mass media, record labels and music fans. This is partly a process of heterogeneity and partly one of mainstreaming (Arsel and Thompson, 2011; Thomas et al., 2013). Independent music is often described as real and creative music by the media. The scene itself is depicted as nurturing unknown and creative acts, and offering musical and cultural diversity, which is regarded as an element that is difficult to find in the mainstream music industry. As was mentioned in Chapter 6, some record labels, such as Happy Robot and Pastel Music, target women in their 20s and 30s who are not into teen pop idol, and minor music genres such as hard rock or heavy metal. These labels thus influence cultural consumption. The record labels’ music is generally guitar pop and soft rock music which can be listened to and enjoyed in daily life. That kind of music is often portrayed as trendy by the media. The rise of the so-called ‘soft and sweet’ independent music has led to the development of a music application on mobiles called Sweet Indie Music, which aims to attract the broader public, and the launch of a website, Mint Paper, and its successful music festival, Grand Mint Festival, that features the same sort of music. The website (2012) says that the community was launched to promote ‘modern music’ that is not categorized by musical genres but is instead ‘sophisticated music stimulating sensibility’. The introduction page of the website emphasizes themes such as ‘sentimental’ and ‘modern life’. In addition, the cultural tourism Great Escape Tour in Jeju shows that indie music is being conceptualized and iconized alongside the attractions of the natural environment of Jeju. This symbolizes indie

215 music as escape and freedom from daily life, and a way to gain new knowledge about different lifestyles. The tour also emphasizes fairness in tourism and ecology on the island through activities such as using the services of local businesses and reducing the use of disposable products.

The conceptualization of independent music portrays the idea that consuming it is special and that it offers value whereby consumers feel and can be described as people with in-depth understanding about culture and emerging trends. For some music consumers, this is a way to achieve self/brand image congruency (Larsen et al., 2010). In this sense, a marketplace myth is occurring (Arsel and Thompson, 2011). In a negative way, this can be understood as competitive individualism that uses music for self-realization, self-management or self-recognition (Hesmondhalgh, 2008). According to Hesmondhalgh, “music can be part of status battles to show one’s openness to a variety of lifestyle pleasures and one’s superior emotional range” (p. 337). One of the interviewees working in the broadcasting industry (Project B) claims: “It means, in some sense, the independent music itself has a characteristic of status. They feel as if they (indie music consumers) become, like, culturally rich, a refined person and a cultivated person as they like independent music. They are not sure exactly what independent music is but, anyway, they like it and communicate with it emotionally, and support it.”

On the other hand, it can be considered a smart move to commercialize music culture, as Harley-Davidson motorcycles did. Schouten and McAlexander (1995) show how Harley-Davidson used negative images of bike riders to turn them into a cultural expression accepted by the broader public. There are other examples of this in the history of the music industry, such as hip-hop and punk music. In the case of independent music in South Korea, it has been regarded in the past as pursuing radical cultural expression and innovation, but being also somewhat unpolished, anti-social, rebellious and lacking broader appeal. However, today it is understood as a source of cultural stimulation, of fresh musical expression and of a trendy culture. An article in an online newspaper produced by citizen journalists analyses the

216 reasons for the success of independent music in recent years. It points to differentiation and the forming of identity by music consumers who use it to say “I am different from others” (Lee, 2012a).

The consumption behaviour, information-processing (See section 7.2.1) and experiential approaches (See section 7.2.2) discussed in this section should not be regarded as referring to completely different and separate consumption activities. Rather, they are related to one another and may act as antecedents to the music consumer’s attitudes to independent music, which are a theme of the next section (7.3). The components of music consumers’ attitudes comprise loyalty, attachment and commitment to the brand. Attachment to brand is regarded as a construct that strengthens ties between consumers and brands (Park et al., 2010). It can “foster brand profitability and customer life time value” (Park et al., 2010, p. 1). In an extreme sense, it can be seen as religious and sacred consumption (Belk et al., 1989; Muniz and Schau, 2005).

7.3. Frame Alignment Attitudes of Music Consumers Regarding Independent Music

Frame alignment practices are used to resolve the tensions that occur in communities, and to contribute to their continuity (Thomas et al., 2013). Thomas et al. state that frame alignment practices are used “to legitimize heterogeneity, attenuate its associated tensions, and preserve continuity. … These collaborative practices reinforce collective and individual belonging” (2013, p. 1024). In this research, two frame alignment practices are identified: fear (minimizing the inappropriateness of independent music), and responsibility (maximizing the appropriateness of independent music). However, it would be more precise to call them frame alignment attitudes, in accordance with findings of this research, because the findings suggest they are a mixture of emotional and physical support aimed at contributing to the continuity of the music culture.

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7.3.1. Fear (Minimizing Inappropriateness)

Fear relates to two different notions about how independent music is thought of. The first is a fear that the consumption of independent music is being thought of prejudicially. In this case, the fears come from different aspects of cultural consumption that others see as wrong. These aspects include rejection, isolation and showing-off. There is also a fear that the image of indie music consumers may be distorted by media influences and social norms. The second fear is that their music will become known to the broader public. Such fears develop from the social relations and circumstances that the music audiences are engaged with. However, these emotional responses should not be thought of as a resistance to sharing the music culture. Rather, it should be thought of as a set of negotiations with people and society to minimize the antagonism to them and their culture, and ruthless commercialization which eventually can harm the music culture.

In some sense, the indie music fans want to share indie music with their friends and other people with whom they are close, but they fear their recommendations being rejected and ignored. Some indie fans have prior experience of rejection and isolation. They are also concerned that sharing and informing others about their cultural consumption could be regarded as showing off to general music consumers who are not aware of the music. This is based on representations of self, self- monitoring and social perceptions. Studies by Larsen et al. (2009, 2010) also emphasize the self-representational aspect of music consumption and show that people are concerned about their representation in different social situations and in front of other people when they choose what music to listen to. This finding is also reflected by one of the female interviewees from South Korea, a university student and participant in Community B, along with other interviewees from the same community: Interviewer: Do you share indie music with other friends?

Interviewee: No. To be honest, it isn’t common. If I tell people that I like them (indie bands), no one has heard of them. It feels like I want to show off. So I don’t tell people.

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Another interviewee in his 30s working in the footwear industry (from Community A) admitted to similar feelings when I asked him the same question: “It is hardly possible. … There are few people who like rock music. Even my friends don’t like rock music. So to listen to rock or that sort (indie) of music, (I) need to go to Internet communities. Either communicating about music on the Internet or having offline gatherings are all [that is available].”

His comment shows that, rather than risking being rejected or isolated from his close friends, he chooses instead to go online to find like-minded people with which to talk about music and share his passion. This participation leads to offline gatherings, which can help to develop social groups dedicated to independent music.

Apart from fearing rejection and being perceived as showing off, the indie music fans also fear that their cultural consumption may show a twisted image of themselves. These feelings are identified in studies of Apple Newton (Muniz and Schau, 2005) and Star Trek (Kozinets, 2001) consumers. Muniz and Schau (2005) explain perceptions of outsiders of the Apple community as persecution and stigma. The media offers the fantasy of cultural consumption on the one hand, but criticizes it on the other. The media in South Korea has reported that the area (Hong-Dae) where many of the music clubs are located, and where most of the independent musicians perform, is a place of wrongdoing by teenagers, and a place where people go to satisfy their sexual desires. The media reports may be true in some respects but they give the impression that all of the people who go there are going to participate in immoral activities. One interviewee, a primary school teacher, expressed her concern: “I am a teacher at a primary school. People sometimes ask me a question like, “what you are doing over the weekend?” If I reply that I go to clubs, they look at me from a biased viewpoint. They think, if someone goes to clubs, they are looking for [sex], but I am going there to listen to music. There is still prejudice.”

Her comment shows that this sort of judgement happens continuously. These biased perceptions make her reluctant to reveal her cultural consumption. Kozinets (2001) shows that social prejudice regarding sub-cultural consumption creates stereotypical

219 images of its consumers. Kozinets’ (2001) investigation of Star Trek fandom shows that the fans are negatively depicted as ‘weird’.

The change in perceptions of Hong-Dae, which was once thought of as a place of cultural innovation and creativity, is related to the co-optation and commercialization of the place. It has also been facilitated by the media, and consumers who fantasize about consumption. At first, the area was able to attract cultural consumers. As it gained a reputation for cultural diversity and innovation, the general public too wanted to experience what it had to offer. Therefore, it was inevitable that commercial brands and retail shops would flock there. As a result, the place is now crowded with people who go to dance clubs, local pubs and bars, franchise restaurants and coffee shops, and to retail shops for commercial products such as clothes.

From the commercialization point of view, some music fans feel a fear of being too exposed and forced into transition from a cultural space to a commercial place. They have also lost their enjoyment of discovering new things and keeping them to themselves. A similar response was seen to the commercialization of the Harley- Davidson biker culture (Schouten and McAlexander, 1995). The authors of that research point out that “as membership in the subculture becomes more accessible and acceptable to mainstream consumers, and as more mainstream consumers begin to don the trappings of bikers, lines of marginality become blurred and some of the distinctiveness of the biker subculture is lost” (p. 58).

Similarly, one long-term independent music fan in her 30s claims: “There is pride and satisfaction that I am listening to music no one knows… It is now too open, it is considered a trend… listening to indie music has become a trend… Unlike in the past, it is not an atmosphere for people who come to listen to music… More people come and the floating population has increased and capital is driven into the area. It is true that shops around the area are better than before but there is no Hong-Dae culture and streets that visitors want to see. The rent has gone up. Already, artists and musicians who used to live there have left the place. It is just a façade.”

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Her comment can be understood that she misses the feeling of enjoying something exclusive. Alternatively, she may want to be a cultural authority over others, and sees as devaluing the recent cultural and commercial trends; thus, vested consumers of indie try to distinguish themselves from hipsters as a research by Arsel and Thompson (2011) shows. It also shows that the heterogeneity of the community has removed the sense of belonging (Thomas et al., 2013). However, her comment should also be seen as showing that she is worried about the way the music culture is being affected by commercialization. Rather than these fans abandoning the commercialized indie culture, a phenomenon identified in previous research (Arsel and Thompson, 2011), this emotion is shown in the current research to have evoked a sense of responsibility. This will be explored in the following section 7.3.2 on responsibility.

This emotional worry is also captured by other interviewees, who express concern that, even in the independent music scene, there is polarization of popularity and economic returns, although there are signs that this issue is going to improve. They argue that the recent success of indie music has relied heavily on the cultural branding of musical styles and culture for female fans in their 20s and 30s, which has become an iconic brand of indie music and culture. Although this success has been able to attract the general public, some interviewees express concern that this implies that this is all there is to indie music. One university student of a group interview depicts this concern well: “These days, there is a gap between the rich and the poor in the indie scene. There are lots of bands but the line-ups at rock festivals are very similar. … Indie has become polarized. … The spectrum of famous acts is expanding by sharing and spreading. … There is indie inside of the indie. While some acts only get a few hundred views, some acts get tens of thousands. … What would you watch first? Of course, (the one with hits of) tens of thousands. People will think this is good. It is also true that when someone goes to experience indie music for the first time, they will be attracted by the content (which gets a high number of hits).”

Her argument and the previous comment show that, due to the co-optation of the indie music culture by commercial markets, authentic environments and practices have been harmed and this eventually deceives newcomers. Thomas et al. (2013) call

221 this an example of the classic co-optation argument. In addition, there are some tensions between long-term music fans such as the interviewee above and newcomers because they have different objectives in listening to indie music. Thomas et al. (2013) suggest that tension between participants is always probable. Their research describes particularly well tensions in a community of runners that had expanded from a community of serious runners to include ordinary joggers. Their research suggests that, when a community is in transition from one of exclusivity to one of openness, tensions between participants are unavoidable.

The co-optation of Hong-Dae has not only been driven by the media, consumers and commercial brands, but has also been accelerated by public sector policy. As was mentioned in Chapter 6, the initial commercialization of the area was driven by the development of Seoul city as a whole. Another public policy and development plan drove further commercialization of the area. Before the 2002 World Cup in South Korea, Hang-Dae was strategically selected to vitalize tourism in relation to the event in order to attract visitors from around the world. According to a report in 2000, entitled The Place Marketing of World Cup’s Strategic Area: A Case Study of Hong- Dae Area, the purpose was to boost cultural tourism and to help boost local culture. A recent survey shows Hong-Dae to be one of the 50 top tourist attractions in Seoul (Seoul Metropolitan Government, 2011). However, another report, from 2001, Research into Seoul’s Regional Tourism Development Plan, criticizes the commercialization as having caused a loss of the cultural features of the space and the expulsion of the cultural producers who had helped to form the distinctive image of the place.

Due to the government efforts, the area has emerged as the most commercial area of Seoul, and rent there has soared (Park, 2011). One independent musician who started his career when the area was emerging states, “I have never been to the street since 2002. Not even once. What we called before the concept of ‘in front of Hong-Dae’ is now expelled to the surroundings. Look at the area now. Design and music is gone. Sensitivity has disappeared. It is full of capital-driven colourless shops. What are the differences between it and other commercial areas?” (Lee, 2011a). The change brought about by commercialization thus appears to have caused the artists and

222 cultural consumers to experience a loss of regionalism and a sense of belonging to the place.

7.3.2. Responsibility (Maximizing Appropriateness)

As well as trying to minimize inappropriate reflections on independent music fans and the expansion of the music culture and the area, the music consumers are found to take responsibility for contributing to the continuity and spread of independent music and culture. This responsibility comes from their pride, duty and frustration.

Although they share the emotional attitude of fear, they also share pride in their cultural consumption and the culture they love. The pride about their cultural consumption comes from their passion about the culture and their enthusiastic consumption of it compared to general music listeners. This emotional attitude of pride is often created through a comparison to mainstream music and their disregard of it. Consider a statement from an interviewee (a university student) from Project B: “If it is mainstream music, this refers to idol music… In the case of idol music, it is music created by someone else who sets the performer’s target. Therefore, it is not artist-oriented, rather it is consumer-oriented music. … In the case of independent music, it is the opposite to that. Rather than the consumer-oriented approach, it is music that I want to create. Independent music sings a message that I want to deliver and that is the power of independent music.”

This was a commonly shared notion among the music consumers interviewed. Muniz and O’Guinn (2001) report that some form of opposition to competing brands is commonly found in brand communities. They argue that oppositional loyalty is based on pride in a well-loved brand and is a source of unity for the members of a community. Users of Apple Newton show similar behaviours of resistance in the computing market (Muniz and Schau, 2005).

The interviewees expressed the view that the lack of public interest in their music scene was due to the media in South Korea, which produces music programmes focused on mainstream music. Therefore, they believed, exposure in the media

223 would help to increase the popularity of independent music. One independent music consumer in her 30s working in the publishing industry observed “Because it is indie music, there is no reason that general public don’t show any interests (in indie music). It doesn’t mean that some of the music is ugly, abnormal and distorted, only that there is a lack of opportunities for it to be exposed. Fortunately, due to a programme, Yoo Hee-yeol’s Sketchbook, people who didn’t previously know about indie music have started to realize that indie music is good as well. People who are tired of idol music have started to flock towards indie music”

The music consumers’ pride also comes from what they regard as a central feature of indie music: independence of production. They consider this to be important as guarantees and fosters the musician’s own creativity and authenticity. Thus, the music listeners believe they are hearing a story that is organically experienced. Therefore, independence of production is regarded as a core value of independent music. One of the core values of any brand is how it expresses meanings and usages, as witnessed in the case of Harley-Davidson motorcycle owners (Schouten and McAlexander, 1995).

The lack of coverage of independent music in the media creates a sense of duty among music consumers to care about musical culture and act as promoters among the broader public. According to Muniz and O’Guinn (2001), brand communities share “moral responsibility which is a sense of duty” (p. 424). Their research reveals that this sense of responsibility leads to activities that contribute to the long-term survival of brands. The activities first act to integrate and retain members and then assist them with using the brand.

This sense of duty means that they are willing to offer contributions to the music scene and the musicians through activities such as participating in online communities, buying their music and sharing information. Sometimes, it involves introducing music and going to live venues with close friends who are not yet fans of indie music. These actions parallel the findings of Muniz and O’Guinn (2001) in terms of pursuing the expansion of a community and assisting other members.

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In the case of the independent music consumers, this includes all kind of activities that contribute to the continuity and dissemination of the culture, through the investment of physical, psychological and financial efforts. Some interviewees pointed to the lack of distribution channels and promotion as encouraging them to disseminate the music and information about it. This is caused by a fear that the music and musicians they love will disappear due to a lack of support. Thus, they feel a duty to consume. This mixture of passion about the music scene and the fear it will disappear gives them a sense of responsibility to protect, nurture and cultivate it.

This sense of responsibility can come from pride in a culture they enjoy or from worries and frustrations: “Mainstream music is known by many people as it is vastly covered by media such as TV and radio. So it is such a shame. It (the independent music) is music that I love so I want it to be heard by many people and I would like to share the experience of it with many people, but there aren’t many ways to do so.” (An interviewee of a group interview, a university student)

Although these music listeners try hard to spread the music culture, to promote it and keep it alive, emotional responses like pity, upset and shame show that this sometimes requires efforts beyond their capabilities and reminds them that they are powerless to compete against the broader industrial barriers. This frustration is well depicted by research into Apple users (Muniz and O’Guinn, 2001). The authors note the users’ frustration with PCs and Microsoft and that, “while enjoying, even revelling in their underdog status, but threatened by outright extinction, they can still not understand why the rest of the world does not appreciate what they have known for so long” (p. 420). This analysis of Mac enthusiastic shares a great deal of similarity with this research.

The frustration of the indie music fans is very complex, and they are well aware of the structural issues of the music industry, such as conglomerations of digital music and their power that allows them to maintain unfair revenue distribution rates for

225 musicians and record labels. The interviewees show concern that, as a result, independent musicians lack sufficient compensation for their creations.

The fear of prejudice and commercialization may deter them from experiencing and sharing indie music with other people. However, there is a general agreement that it deserves to enjoy more success than it is currently experiencing. It seems that the fear of the extinction of indie music if they do not consume it is greater than concerns over commercialization and social prejudice. Thus, the music listeners feel responsible for sharing and spreading the culture. There is also a mutual consensus that their individual and collective efforts will contribute to the development of a culture that will overcome the social, cultural and industrial barriers, as well as a feeling that sharing and spreading their experiences and passions has become easier due to the rise of digital communication media.

The recent developments to and increases in the use of digital communication technologies have offered music fans convenient ways to satisfy their desire to share independent music. The next section will discuss how the music consumers use communications media in terms of cultural consumption. It will show that they are not only cultural consumers, but also cultural producers and contributors eager to demonstrate their passion for the culture and share it with other people.

7.4. Uses of Digital Communications Media

Digital communications media provide an environment in which users can communicate, share their interests and form personal relationships. The impact of the technology has been immense as it has become one of the easiest and most used tools for communicating with friends and sharing life stories. The presence of brand communities in the digital space is common (Muniz and O’Guinn, 2001). The managing effects of the technology are also regarded as an important feature in organizations. Media and entertainment companies are no exception as the media consumers and fans use the digital space to talk about programmes they love, participate in online communities and events, make up stories and create content (Jenkins, 2006; Rose, 2012).

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Investigating the social media space can fill the research gap on value as “much of the extant research on customer (perceived) value has considered individual customer value independently of other customers and has ignored the effects of the latter” (Helkkula et al., 2012, p. 67). It can also offer an understanding of the use and value of a service by providing understanding in terms of “customers’ lives, including context, activities and experiences performing different tasks and how the service supports customers’ life” (Heinonen et al., 2010, p. 538).

The next section details the technical effects of the digital communication tools and will then show the sorts of activities users engage in. Three different activities, acquisition, relationship and engagement, are identified (See section 7.4.2, 7.4.3 and 7.4.4). For each activity, the different purposes and satisfaction provided will be detailed. These practices carried out in the digital space are motivated by the frame alignment attitudes described in the previous section (7.3).

7.4.1. Technical Effects

Hennig-Thurau et al. (2010) propose six characteristics of new media: 1) digital – virtually no marginal costs to re-produce digital products and distribution; 2) pro-active – consumers use new media to contribute to all parts of the value chain; 3) visible – consumers’ new media activities can be seen by others; 4) real-time and memory – new media can be accessed by consumers at the time of production and content produced by consumers is often available indefinitely; 5) ubiquitous – new media allow consumers to reach other consumers and companies almost anywhere and at any time; 6) networks – consumers use new media to participate in social networks, which enable them to create and share content, communicate with one another, and build relationships with other consumers.

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Two forms of the technical effects of digital communication media identified in this research’s data analysis are accessibility and linking. The data suggests that the six characteristics can be regrouped into two themes, accessibility and linking. Accessibility encompasses the digital, real-time and memory, and ubiquitous characteristics. Linking encompasses of pro-active, visible, ubiquitous, and network characteristics. The technical benefits allow the engaging of practices, acquisition, relationship and engagement, which will be discussed later.

Accessibility It has been observed that users of digital media find it easy to use in terms of accessing various content and information, and communicating with other people. In the digital space, one can find information and music one likes. It makes it possible to connect with the musicians one loves, with real-time access to their lives and stories. Most interviewees point out that access has been made even easier by the rise of smartphones, which offer portability and accessibility to the digital space. The rise of smartphone technology has made it possible to communicate using social media forms and listen to music in the digital space through digital music services and video services such as YouTube, without time and geographical restrictions. Users can access the services using their personal devices whenever they want, wherever they are. A respondent of Project B (a university student) mentions that “The most beneficial feature is accessibility. In the case of digital music, it is accessibility and portability. The big benefit is that I can listen to the music of overseas musicians directly.”

Linking One of the most practical features of the recently developed communication tools is that they allow the linking of information and relationships. Even without a direct relationship with someone, one can access information and content about them through a mutual relationship. Relationships in the digital space are not limited to personal relationships with one’s friends but include friends’ relationships as well. In addition, content can be linked between different media forms. For instance, videos on YouTube can be shared on Facebook and Twitter. Therefore, in the digital space,

228 users are exposed to virtually every piece of information and relationship there is. One informant (a group interview, 20s, a university student) reveals the ease of exploring diverse music: “In the past, when Facebook and Twitter were not popular, you know, I listened to music within my boundaries, and any exploration of new genres was passive. It was somewhat limited. Nowadays, so many (social media) pages and people are connected like a network.”

The digital space allows her to share and communicate with unexpected numbers of people. She is also able to experience new music that allows her to expand her music consumption.

In this networked environment, individual music consumption can easily be shared on the Internet. One male interviewee (from Community B), in his mid-20s, states, “In the past, whether it was tape or CD, we used to go to record shops together and talk about music together. To be honest, as everyone got MP3 players, we got used to listening to music alone. Now, through social networking services, music can be listened to together.”

Therefore, listening to music, which was for a while regarded as a personal activity, has become social again. Similarly, another female interviewee (Community B) states that she shares music she loves using social media such as Facebook and Twitter. Through these platforms, she points out that she engages in communication about music with her friends.

The two technical benefits, accessibility and linking, show that by using the Internet and social media, the music consumers are engaged with both individual and collective music consumption. Therefore, the music consumers by using the Internet and social media gain convenient access to music related information, connect with other music fans, share what they love, and discuss their passion. In this regard, they are involved in the value creation of independent music. This happens inter- and intra-subjectively as Helkkula et al. (2012) suggest, and is socially constructed (Edvardsson et al., 2011). Based on this understanding, the following sections (7.4.2, 7.4.3 and 7.4.4) will present the particular practices that emerged during the data

229 analysis, where the music consumers engage in individual and collective music consumption that leads to value creation and co-creation activities.

7.4.2. Acquisition

One of reasons for using digital media is to acquire information and content. Through acquisition activities, users can satisfy their desire to know about, and gain pleasure from music, and identify future purchases (which I refer to as referencing). These three different activities are not mutually exclusive but related. For instance, the desire to know can produce pleasure and offer ideas for future purchases.

Desire to Know The participation in and use of digital technology offer users the ability to explore information and content which, otherwise, they would have had difficulty obtaining. In the digital space, they can gain information about new releases, emerging artists and musicians, and the labels they love. It is easily accessible by searching for specific terms and establishing relationships with music labels, musicians and music lovers.

A female interviewee (a teacher) in one of the group interview with general consumers explained her practices: “Nowadays, people use smartphones a lot. I get music and information on Twitter rather than Facebook. If you search for keywords on Twitter, you get all the information. Like bots, if you follow indie bots, you can get all the information about new releases and concerts. Record labels do that. … If I follow them, all the information about gigs and music appears (on my Twitter account).”

These practices of using social media and following labels and musicians are based on their love of music and particular musicians.

Another interviewee, in her early 20s, (a university student) from Community C explains, “Even if I don’t want to know, you can know new releases if you click the “like” button of a record label on Facebook. In

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addition, they tweet a message like ‘a band is working on this project’. It is natural to have a desire to know which bands have released new albums and which music bands I love have released. Even if you don’t listen to (the new releases), it has the advantage that you can expand your interests. You can have diverse choices in terms of the music you can experience.”

She explains that the advantages of digital media allow her to express her love of music and musicians, and the technology enables her to satisfy her hunger to experience diverse and new music. Her comment shows that, even if she does not particularly pay attention to their messages on social media, she feels that it is mandatory to follow them anyway.

Another interviewee, a long-term indie music fan in her 30s, offers a similar viewpoint: Interviewee: I follow all (of the musicians and record labels) of the independent music scene to read what they are talking about whenever I have time because I feel it is basic courtesy.

Interviewer: What do you mean by courtesy?

Interviewee: I want to know what they are doing. How can I explain courtesy? You know they are worse-off than the mainstream. Basically, they suffer economically but they are gathered together by the fact that they love music. … Because of this, I try to read their posts. If there is something I can do, I do it. Even if it is just retweeting.

The digital media also allow users to find out about and share experiences with music and musicians. The music listeners are able to read about each other’s personal experiences and opinions. In this way, they can gain new insights and empathy by hearing other people’s perspectives. In addition, indirect experiences of events are possible for fans who were not able to attend in person. Post-event information and videos on the digital space let them know what happened at concerts, what songs the musician performed, and what the event was like. One female university student (from Community C) interviewed points out that, through the video materials on the Internet, she can feel “a sense of realism”. The post-event

231 materials can also be used as pre-event information for some people who are willing to attend particular concerts. Using digital communication media offers users the ability to gain information and diverse content. In addition, it offers music listeners access to the emotional and psychological experiences of others.

Pleasure Acquiring information and experiences from others gives people pleasure. Sometimes this comes purely from satisfying the desire to know. It can also come from the expansion of music consumption and the experiencing of new music.

One male interviewee (from Project A, a university student) describes his re- engagement with music consumption: “After realizing that all music is available on YouTube, I have started listening to music again. In the past, when I was a university student, I stopped listening to music. About a year or two years ago, I realized that all music is available on YouTube.”

This interviewee’s comment shows that pleasure can also be achieved by finding unexpected content, such as unreleased music from beloved musicians, or music from unknown musicians.

Pleasure, therefore, can be achieved by a variety of means in the digital space. For instance, various digital music services also offer music-related services such as interviews with musicians, musicians’ stories about their favourite music and various snippets of information about the music. In addition, user-generated content on personal blogs, communities and social media are everywhere on the web, to be experienced by other users.

A male interviewee (from Community B) shares his experience: “To get information, I sometimes get it from blogs. When I have visited people’s blogs, there have been cases where their background music was good so while I did something else I kept the page open.”

A female interviewee in her 30s (from Community C) shares a similar experience:

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“When I visit mini-homepages, I can hear great music by chance. That makes me dig the music. I pay attention to music from blogs and that musicians recommend.”

The satisfaction from the purposive exercises of searching and knowing offers pleasure to experience new music to the music listeners. In addition, pleasure can be achieved by accidental and unexpected encounters with music and information through different situations, forms and tools.

Referencing The satisfaction and pleasure music fans gain can offer them references for what music to buy and listen to in the future. Therefore, the use of digital technology changes the way they make decisions about music listening and buying as they can listen to and buy music using portable devices such as mobile phones and tablet PCs.

A female interviewee from an individual interview, in her 20s, states, “Before the rise of the digital music market, it was through live concerts that I could be tempted by bands, to buy their records and become a fan. Now, even if I don’t attend concerts, I can judge whether I like a band or not because their music is available on digital music services.”

In the past, information about future releases would be limited to media forms such as TV, radio, newspapers and magazines. Now, music fans are not only influenced by centralized media forms; they also reference other people’s opinions and suggestions using digital technology. A male interviewee (from Community B) illustrates how he is influenced by other people on social media: “It is often friends’ Cyworld’s mini-homepages that influence me. I might go to friends’ Cyworld, who have distinctive music tastes from my own. I will reference their lists of background music. … Unique people, to use a common saying, have unique music on Cyworld. When I visit their mini-homepaes, I get to know music first, and then get to know the music’s musician. Meanwhile, an interest can be aroused. Sometimes, the interest can remain just an interest and sometimes the interest can grow if there are chances to experience the music. So, if I decide I need to buy,

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I buy the CD. If I think I need to know everything about the musician, I buy every CD they have released.”

His account shows how his friends’ social media spaces have often been sources of discovering new music and musicians. By referencing his friends’ musical tastes, he has cultivated his own music consumption. This has allowed him to build his own distinctive cultural consumption of independent music.

Digital music services such as iTunes and YouTube offer information regarding related artists and music bought by other users. Recommendations by such services are regarded as another source, guiding music buying and listening. Existing research shows that consumers are influenced by the online recommendations and posts of others (Chevalier and Mayzlin, 2006; Senecal and Nantel, 2004). Referencing other people’s opinions and suggestions is based on trust, not of him/her, but of the music they like. According to a long-term indie music fan in her 20s from an individual interview, “Above all, it makes us talk (with someone on the digital space) because we share similar music taste. When a friendship is established based on that, trust emerges. It is trust about what kind of music he/she listens to… It is not about what kind of person he/she is; rather, trust occurs through (judgement) about whether his/her music taste is similar to mine.”

Trust can be a basis for building relationships and interacting with others, which is the next theme we will cover.

7.4.3. Relationship

Forming relationships in the digital space can offer emotional, psychological and social benefits to music consumers. Community members put an emphasis on social links (Fournier and Lee, 2009). In the digital space, relationships can take an active form, such as interacting and communicating with someone, or a passive form, such as observing someone else’s digital activities. Both active and passive forms offer benefits to the users. The music fans Interviewed revealed that having relationships in the digital space can offer music listeners joy, attachment and togetherness.

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Joy Joy refers to the emotional response music consumers have when they form relationships in the digital space. It can take several different forms, such as enjoyment, delight, amusement and amazement. Joy can be experienced in several different ways. It can occur through interacting and communicating with someone or observing someone else’s life in the digital space.

In terms of observing others in the digital space, fans can access and observe updates about musicians whenever and wherever they want. Unlike media appearances and press releases, which are controlled by the media and record labels, the digital space is treated by the users as a very personal and private space. The users know that what they get in the digital space is often the musicians’ own personal messages and actual excerpts from their personal life. It can offer them some degree of amazement, as they feel that they have a personal and private relationship with a musician.

Enjoyment is found to be greater when interaction and communication occur. The digital space provides easier ways to interact and communicate with friends, members of a community and musicians. The music listeners use the digital place to talk about the music they love, share their feelings and experience music, and communicate directly with musicians. One interviewee in her 30s (from Community C) gives a general example: “For instance, if I like some part of some music by a XX band, in the case of a fan of the XX band, they search the band name on Twitter. If there are any tweets which mention the band, I speak to them, ‘I also think the way you do about a song. That is nice to see’… I share the sensibility of other people who attended the same concerts by searching for past concerts or bands from the concerts on Twitter.”

By using aspects of the digital space such as social media and online communities, music fans can gain joy and amusement through meeting people who share the same cultural consumption patterns as they do. The act of talking to strangers and sharing their experiences with them in the digital space is similar to what Muniz and

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O’Guinn (2001) identify as brand community practices or greeting rituals. They point out the implications of the ritual of greeting and communication as follows: “by constantly interacting with other brand users in these scripted interactions, community and the meaning of the brand are reproduced” (p. 422).

Not only does communication between fans take place. Interaction between fans and musicians offers the music listeners great delight and amazement. For musicians, it is a place to meet and communicate directly with their fans. For independent musicians, who may have relatively small fan bases, it is an opportunity to expand them. The music fans interviewed for this research mentioned feeling amazed when musicians they liked followed their Twitter accounts, talked to them and left comments. They also pointed out that this emotional satisfaction developed into a greater attachment to the musician and led to future activities such as buying music, attending concerts, and sharing and disseminating their music and information about them. So, for the musicians, direct communication and relationships with fans can contribute to their sales. In addition, more importantly, it can contribute to expanding their fan base through the efforts of devoted fans.

Attachment Attachment often occurs between a musician and their fans. Such closeness can develop through direct or indirect interaction and communication in the digital space, which can contribute to the success of a band. The music listeners feel a sense of closeness and gain a greater understanding of the music and the musicians by having a relationship with them.

An interviewee in her 20s from an individual interview, and a long-term indie music fan, says, “I used to use me2day (a form of domestic social media in South Korea and very similar to Twitter) a lot. In the case of me2day, having communication with a musician and observing what kind of thoughts they have offers an understanding about the musician, like ‘oh! I see why he/she makes music like that because he/she is like this’. Because there is no way to know how the musician lives unless I have a chance to see them in real life. By looking at these things, there is a certain possibility to understand them.”

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Following the musicians she loves in the digital space offers her enjoyment through seeing how they live, what kind of life they have, what they think about specific subjects, and what they experience. She also makes a connection between the musician’s identity, which she builds up from posts on social media, and the music of the musician.

Therefore, the opportunity to understand musicians is an additional feature of music consumption for the music fans. This shows the emotional and psychological attributes of their attachment to cultural consumption, which provides satisfaction in terms of individual consumption and the experience of music. In addition, these emotional features can contribute to the success and development of a musician’s career. Some of the interviewees identified that one of the attractions of independent musicians for them was that they were more likely to be able to have a direct relationship with them than with major acts.

This form of attachment can lead to active promotion, buying and support. Muniz and O’Guinn state that “by virtue of their collective nature, and enhanced by new forms of computer-mediated communication, consumers simply have a greater voice” (2001, p. 426). As a result, active support can be important in helping independent musicians to develop their careers.

Togetherness The Internet can be used to create relationships between people who share similar cultural consumption habits, and this can contribute to users forming online or offline social relationships. The development of digital communications media has meant that users no longer have to form communities such as online forums. Now, users are participating in a digital community with no specific boundary. They are virtually related to everyone in the digital space. According to the interviewees in this research, togetherness includes three phases: connecting with people, sharing stories and offline gatherings.

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Music consumption is a personal activity that can be limited to a personal experience, but people can also engage and participate in the digital space in order to feel a sense of togetherness and belonging in their music consumption. Muniz and O’Guinn, who introduced the idea of brand community, state “with the rise of mass media, community is spread and reproduced very efficiently. This allows community members to possess a well-developed sense of vast unmet fellow community members, to imagine them” (2001, p. 413). The digital space offers music lovers the ability to share their experiences and feelings on music and music events. The sharing contributes to the establishment of relationships and a feeling of closeness.

Muniz and O’Guinn (2001) also identify the importance of sharing stories. They show that “storytelling is an important means of creating and maintaining community. Stories based on common experiences with a brand serve to invest the brand with meaning, and meaningfully link community member to community member” (p. 423). Togetherness and the sense of belonging facilitate the brand and community consumption. The music fans are constantly exposed to the consumption of indie music through the use digital communications media and by participating in online communities. These activities are centred on their interests, and so they gain knowledge about different consumption stories. Although these relationships are based on sharing the consumption of independent music, the sharing of personal lives is also involved. This can strengthen the members’ sense of belonging. When a long-term independent music fan in her 20s (individual interview) was asked about her experiences in a music community, she answered, “Because people who liked the musician were gathered and there were members who knew each other from attending the musician’s gigs, (in the community) there was comfort, like friends who share their personal stories. There were cases where I met someone from the community whose nickname or ID was quite familiar. There is a greater chance to know each other personally.”

Relationships built on the Internet can lead to offline meetings of the members of a community, or people who share similar cultural tastes. This can be achieved through collective offline music consumption experiences such as attending concerts

238 together. This strengthens the togetherness of a community and can vitalize a community.

Muniz and O’Guinn (2001) see brand communities as having an interpretive function in terms of brand meaning. They also point out that the brand consumption is socially constructed and socially negotiated. Their suggestion also parallels the case of independent music. The desire for togetherness facilitates the sharing of individual consumption experiences and collective cultural consumption. From this process, the consumption of music and meanings around the independent music is socially constructed and socially negotiated between the music lovers.

7.4.4. Engagement

Engagement practices are activities that involve praising, informing people about and disseminating independent music. Attached music consumers act as promoters on the web, by initiating communication about the music and trying to disseminate favourable impressions to the broader public. Schau et al. (2009) call these impression and engagement practices. Impression management involves evangelizing and justifying one’s devotion to a brand. Engagement practices aim to “reinforce members’ escalating engagement with the brand community” (p. 34). They involve activities such as staking, milestoning, badging and documenting. The consumers of independent music interviewed in this study were also found to be involved in some of these activities. The most significant ones were documenting, reproducing and evangelizing.

Documenting According to Schaue et al., “documenting occurs when brand community members construct a narrative of their brand experience, staking their social space, participating in milestones, badging the milestones for posterity, and finally evolving a cohesive personal brand narrative” (2009, p. 35). In the case of the music consumers, it can be identified that they engage in collecting, sharing and communicating information about the music and musicians they love.

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Digital music services and social media offer them technologies and spaces through which to collect and link their favourite music. Through this process, the music consumers can express and share their personal stories and narratives around the consumption of music, as was explained in the earlier section on togetherness. A male interviewee (Community B) explains, “In my case, I have connected my YouTube and Facebook [in a way] that allows me to share my favourite videos on Facebook. My friends who have watched the videos have left comments. We could also say things like, ‘do you also like this?’”

His comment shows that collecting, sharing and communicating are not separate practices. Rather, they can happen together, in real time. It is now a very common practice to share and facilitate communication in social media places. Communication based on individual’s experience of a specific act of cultural consumption can be shared with others, and this communication helps people to confirm their positive experiences.

Apart from collecting and sharing professionally produced content, music fans also produce material themselves, and collect and share it. The rise of communications media that facilitate the easy sharing of user-generated content, and accessible technologies such as affordable equipment, digital cameras and editing programmes for photos and videos offer digital users the ability to create their own content and share it with other people. It is now very common to see on social networking sites photos or videos produced by people who attended concerts or music festivals. Enthusiastic consumers invest in proper equipment and document their cultural consumption, as one interviewee in her 20s (from Community C) mentioned:

Interviewer: Do many people bring cameras, take photos and upload them on to the web?

Interviewee: A lot of people do. Basically, people who go to music venues often do this, because they (photos or videos) are fun to collect. Of course, it is the same band, but from their perspective, yesterday’s concert, today’s performance and tomorrow’s concert are all different for them.

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For those who invest their time, money and effort, every occasion offers them different stories and experiences. Every concert can be different for them in terms of the atmosphere of the venue, the music, and the musicians’ comments. Digital technologies provide them with the ability to collect and document their consumption experiences, and show their devotion to the culture. In addition, they facilitate sharing and communicating with other people.

Reproducing This is one of the most common ways in which people use digital communications media nowadays. Green and Jenkins (2011), who propose the concept of spreadable media, say that “spreadability stresses the technical affordances that make it easier to circulate some kinds of media content than others, the social networks that link people together through the exchange of meaningful bytes, and the diverse motives that drive people to share media” (p. 112). As explained before, linking allows users to reproduce content. The interviewees in this research also point to the activities of reproduction and the power of spreadability.

The reproduction of original content is an easy way to participate in social media and express one’s preferences to other people. In Facebook, users can click the ‘like’ button to share content with other people, while in Twitter the re-tweet function serves the same purpose, as the following excerpt shows: “Nowadays, because there are so many materials on the web, I don’t upload original material. For example, if something is good on YouTube, I share it with people by linking it to Facebook. … What I do is to keep spreading.” (a university student of the group interview)

Reproduced and disseminated content can spread right across the Internet, forming what is known as a viral success. Spreadability expands through the networked web. Users influence other people and are affected by reproduced content.

It could be assumed that reproduction is a very passive form of media consumption but it is not. Content is spread depending on users’ decisions and the technologies allow users to add their own expressions and alter the original content. It is thus another way to achieve a participatory culture (Green and Jenkins, 2011). Green and

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Jenkins posit that “this new ‘spreadable’ model allows us to avoid the language of ‘infection’ and ‘self-replication’ which overestimates the power of media companies and underestimates the agency of audiences. In this emerging model, audiences play an active role in ‘spreading’ content: their choices, their investments, and their actions determine what gets valued” (p. 116).

Evangelizing Schau et al. point out that, “in evangelizing, members act as altruistic emissaries and ambassadors of good will” (2009, p. 34). This occurs because of their devotion to and passion for the culture and brand. It is an activity where the users express their viewpoints in order to promulgate it and attract others to it. The act of evangelizing is obvious in various contexts. Muniz and O’Guinn (2001) show how participants in two brand communities, Saab and Mac, express their superiority and stories around the consumption of the brand. In another article, McAlexander et al. (2002) show how Jeep lovers make recommendations to others with missionary zeal.

Such zeal is also evident among the fans of independent music, as the following excerpt from an individual interview with a long-term indie music fan in her 30s shows: “When I listen to (music), if it is really good, I distribute it illegally. You know, sending e-mails (to friends) saying like ‘this is really good’ or ‘you should listen to this before you die’ … I know that it isn’t right to distribute music illegally. That is obvious. But I am not sure. … I think that music should be listened to by as many people as possible.”

To increase the chances of people listening to the music, she uses strong words like ‘must listen before you die’ to impress her friends. Although she knows that sending music in this way is illegal, it does not stop her because she believes that (good) music should be shared.

This tendency towards sharing is also observed in another interview. This interviewee, in her 20s (from an individual interview), says, “I think I am the kind of person who uploads (independent) music of beloved musicians that I am impressed with. I have

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the idea that, by all means, I want to spread good music to others because [these musicians] don’t get enough exposure.”

Her comment shows her mission to share music she is impressed with, and also how this comes from the media environment in South Korea, which motivates her to promote bands she loves: “I consider myself as a promoter and marketer because I love those bands. If they are successful, that’s good for me as they will be able to keep producing music. I don’t expect any rewards from what I am doing. I just do it because I like it.”

Therefore, reciprocity, which is identified as one of the key characteristics of the traditional gift system and of the digital gift system in Napster (Giesler, 2006), is not necessary. The important thing about sharing for her is contributing to bands she loves. Several other interviewees also mentioned the importance of supporting musicians. For them, supporting through evangelizing is a way to provide independent musicians with the energy to keep producing music their fans love.

These devoted fans spend time and effort trying to attract other people who are not yet part of the culture. One interviewee in her 30s, a long-term independent music fan who runs an amateur community involved in organizing independent music concerts, explains: “There are cases where fans in their 20s and 30s can afford to invest their money. For example, they take photos and videos that can be used to promote bands; they invest millions of Won on buying cameras or camcorders.”

Thus, there is a group of people who are passionate about independent music taking photos or videos. These amateurs produce high-quality materials, using affordable high-specification tools, and attaining a certain degree of competence (Prahalad and Ramaswamy, 2000) by participating in related communities or searching for learning materials on the web. These photos and videos are provided for free to the bands and uploaded onto band community sites. The fans are also involved in spreading the material by talking about it on social forums.

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The motivation of fans to evangelize comes from pride and a sense of responsibility towards independent music, as mentioned in the section on the attitudes of music consumers to independent music. Their pride in the music scene, their sense of responsibility and their judgement of it increases their missionary zeal and desire to evangelize.

This section has described the different practices music consumers use to create value in music in the digital space. The practices are categorized under three different themes: acquisition, relationship and engagement. The discussion of each theme has shown that the music consumers use the digital media to develop personal cultural consumption, establish relationships with others and share that cultural consumption with others. The findings indicate that the value of music is co-created. In the next section, the organization and resource integration of independent music communities in South Korea will be discussed.

7.5. Music Communities or Projects

Research in marketing has emphasized the role of consumers as value co-creators (Vargo and Lusch, 2004). It is suggested that the way consumers co-create value is by integrating their resources (Arnould et al., 2006). According to Vargo and Lusch (2004a), there are two different types of resources, operand and operant. Operand resources are what we traditionally regard as resources, such as economic resources and tangible resources including raw materials. Operant resources are intangible and invisible, including knowledge and skills. Arnould et al. (2006) posit that consumers’ use and integration of operant resources co-creates value. They categorize the operant resources into physical, social and cultural types:

• physical resources (physical and mental endowments: energy, emotion, strength);

• social resources (family relationships, consumer communities, commercial relationships);

• cultural resources (specialized knowledge/skills, history, imagination).

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This categorization may have been proposed as a way to understand a firm’s integration of the consumer’s resources, but Baron and Harris (2008) show that it is also useful when no organization is involved. Their paper investigates a consumer campaign to save a local cinema in Woolton, a suburb of Liverpool in northwest England. The case shows that it could be a helpful framework to use for investigating independent music communities or projects in South Korea. As in the case of the local cinema, music communities and projects can be understood as music consumers’ campaigns or activities aimed at supporting the independent music scene in South Korea. The case of South Korea also sheds light on the impact of digital communications on consumer resource integration, which Baron and Harris (2008) suggest as a future research opportunity. Involvement in the digital space is not a separate activity for them but an integrated one. The interviews carried out for this research, with key participants in five different music communities or projects, offer rich data on their resource integration.

The analysed data is thus categorised according to Arnould et al.’s (2006) physical, social and cultural resources. Each category further contains sub-categories, which suggest how each resource can vary.

7.5.1. Physical Resources

Sense of Responsibility The participants in this research share a sense of responsibility as they are emotionally attached to the culture. Their sense of responsibility manifests itself in a desire to inform and share their cultural preferences with others. This sense of responsibility is what drove them to start their communities or projects.

A podcast producer (a university student) explains his thoughts on initiating his podcast to introduce indie music and culture: “The first goal was to establish a channel to introduce alienated indie musicians. The most critical source of the sense of alienation among indie musicians is that they don’t have any channel to promote their music, even if they create great music. I wanted to shed new light on the (indie) music, at least, in the form of podcast. Because good music is out

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there, I started this project hoping that many people would start to listen to it.”

Most of the communities, like his, were started in the hope of spreading knowledge of the music they love, and bringing the deserved rewards to musicians. As he explains, the catalyst for the project was the ignorance in the established music market and the media environment.

Moral responsibility (Muniz and O’Guinn, 2001) and the desire to solve problems (Muniz and Schau, 2005) are not unusual for brand consumers. For example, the study of Apple Newton (Muniz and Schau, 2005) shows that consumers of the product were devoted to solving the technical issues they faced when using a discontinued product. According to Muniz and Schau (2005), this was based on faith that the abandoned technology would continue to work. Like the Newton consumers who thought that the product “had been discontinued after Apple failed to market it properly and consumers failed to ‘get it’ ” (Muniz and Schau, 2005, p. 739), consumers of independent music think that the failure of indie music is due to media channels’ failure to recognize it and deliver it to consumers.

For the interviewees to achieve their purpose, they show commitment in energetically participating in independent music communities. At the same time, they demonstrate emotional attachment and use other resources, such as their time and money. The physical resources that come from their passion for independent music motivate them. For instance, participants in a community involved in organizing a music concert pointed out their desire and obligation to know the music and musicians they asked to take part in their event. To fulfil this aim, they would go to music clubs to see performances and study the musicians and their music, even if they did not have enough time to attend entire club nights.

This is also linked to a desire to organize themselves well and their feeling of having a duty to sustain their community. Similarly, a participant in a community aimed at fostering local music culture described her nervousness when organizing a music concert for a musician she loved. The nervousness came from two sources: the

246 anticipation of meeting a musician she loved, and her desire to ensure that the concert was well organized so as to present the musician to the public in a good light.

Emotional Satisfaction The organizing and running of communities and projects requires physical and emotional endowments on the part of the participants. Passion for music is one of the strongest motivations to give such physical and emotional resources to the cause. Emotional attachment to the music is one of the key resources that keeps people participating in communities and helps to sustain projects.

In real life, it is difficult to meet people who share similar cultural interests to oneself. It is even more difficult if one’s interests are part of a subcultural phenomenon. Most of these people will therefore feel isolated. One interviewee (from Community B) said that she felt lonely. This is a common occurrence, due to persecution and ignorance, for consumers of a subculture or unpopular products (Kozinets, 2001; Muniz and Schau, 2005). However, by participating in these communities, they feel there are other people they can talk to about the culture they pursue, which offers them some comfort.

A podcast producer working in the broadcasting industry expressed his enjoyment at communicating with podcast listeners through social media: “I wouldn’t do (using social media) that if there was no fun in it. When I post messages like ‘I have this thought’ or ‘I like this music’, people (listeners) do respond to that. I really like to see their comments and reply to them. So I do it every day.”

Thus his engagement with social media to communicate with listeners is an everyday practice for him. It offers him emotional satisfaction, such as fun, enjoyment and amusement. This makes him invest his physical resources, such as energy and emotion.

Some other interviewees, who organize projects producing music videos for independent musicians, explain the freedom they have to create videos. Unlike their involvement in the commercial production of videos, which requires them to meet

247 the criteria of clients, it gives them freedom over what, when and how to produce. They point out that it is a hobby. Therefore, unlike their commercial activities, it is fun. In addition, it gives them more energy in their daily lives and helps to sustain their careers.

Sense of Achievement Another reason why these people invest their physical resources is for the emotional satisfaction and sense of achievement it gives them. This might come from good feedback or simply from a sense of accomplishment.

Such emotion is also observed in the study by Baron and Harris (2008), in which participants in the campaign to save the local cinema were supported emotionally by the positive reactions of the general public. A podcast producer working in the broadcasting industry states, “I thought that our podcast would be shared with a closed set of people and then disappear. The first time I saw good feedback from strangers on Facebook and Twitter, it was weird. It is still a weird feeling. When I get that feedback…it is such a great feeling.”

When he started producing podcasts, he did not expect such success or to get feedback from people he had never met before. Although this obviously still feels unreal to him, it clearly provides great emotional satisfaction and the physical energy to continue with the project.

Another female interviewee in her 30s, who participates in a community organizing independent music concerts, shares a similar story: “There are many people in bands, labels and who run clubs, who still remember the fervent responses to the concerts. There are cases of audience members (from our concerts) becoming musicians. ... People still remember from bands and record labels, because they want to perform on a better stage, and they know our concerts have attracted big audiences and that we work hard in planning our concerts.”

She expresses her pride, here, that the concerts produced by the community are respected by people in the music industry. She is also proud of the big audiences

248 attracted and that some of the attendees have become musicians themselves. For her, these are symbols that show the success of the community and give her a sense of personal achievement.

As the participants in these music communities and projects are focused on self- satisfaction, financial rewards are not a big issue for them. They prefer to work with musicians they like than just any musicians who want them: “After our work had gained some recognition, we started to receive calls (from musicians). But, generally, what they wanted was materials for promotion … it feels weird to us producing content in that way. So, it is very unusual for us to produce content for someone who contacts us. It would be an exaggeration to say that we are curators. We work with musicians who we like or value, or if we think it would be fun, then we contact them.” (a university student, Project A)

What they want is the freedom to produce content they want to produce. They want to have full authority to express their creativity rather than be directed by someone who wants them to produce content for their purposes. Therefore, their continuous devotion to the project is given in order to achieve self-satisfaction and a sense that they are doing what they want to do.

Careers Physical resources are also used to achieve other roles and projects in the music fans’ lives, such as career aims. In the case of one of the video producers interviewed, although they try to avoid any connections between their commercial work and their indie music-based project, they explained how the project had helped them to establish their name. Therefore, a voluntary project as a music fan had helped them to pursue a dream career in the video production industry.

This connection between something done voluntarily and career aims was not unusual, but a shared theme among the interviewees. One interviewee chose to get involved in Community B partly because he was studying media and communications and wanted to be a radio producer. He was able to gain experience in radio production as the community was involved in the production of a radio

249 programme for a local radio station. The interviewee expressed his satisfaction with this: “If I think over what has influenced my life, this (involvement in the community) has been the biggest thing over the last year. It is also the biggest event when I look back at my entire college life. Various things have affected me about it, and it will be a great help for what I want to do.”

He explained that what he has experienced participating in the community should be very valuable in pursuing his future career. He also told of how he felt he would never forget the experience over his whole lifetime.

7.5.2. Social Resources

Reciprocal Relationships with Producers In order to organize communities or projects, social resources are important. The first such resource comes from relationships with musicians and independent record labels. Relationships with commercial businesses are one of the key contributors to the consumer campaign in the study of Baron and Harris (2008). In the current study, it was found that consumer communities and projects often lack financial resources to attract the participation of musicians and record labels, which is, however, vital for them. For example, they need musicians to do performances for them and participate in the production of podcasts or radio programmes. The musicians and the record labels do participate, despite the lack of financial rewards. Participation of well-known independent musicians can provide for the expansion and success of those communities or projects.

A participant in her 30s in the concert-organizing community expressed her appreciation for the record labels: “It would be impossible without the help of the record labels. The reason we have come this far is that the record label, XX, of the band XX, has allowed us to book the band for a concert. Without this, it would be impossible to develop (a community) like this.”

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Band XX is now a very well-known band in South Korea and signed with one of the big record companies in 2011. Although the band became a popular act in the indie music scene after releasing their debut album in 2008, the community was able to include the band in its 2010 concert. The relationship has a history as one of the participants in the community was formerly a manager of the band’s online community and has been a fan of the band from its very early days. While she was actively participating in the band’s community, she helped the record label and the band in several ways without any financial rewards, including promotion and making posters. This historical relationship has helped her to access the record label and the band. Therefore, the relationship is reciprocal in that the fan, the record label, and the band have done favours for each other.

A podcast producer working in the broadcasting industry included in this study has also benefited from voluntary participation by musicians who have sent them their music and helped to produce podcasts. The interviewee pointed out that the biggest help has come from musicians who have appeared in their podcast and then recommended other musicians to do the same. In addition, some musicians have promoted the podcasts to their fans. Through this experience, the producers have realized the importance of building relationships with musicians first rather than trying to build their own audience base from scratch. They believe that it is positive relationships with musicians that attract their fans to listen to their podcasts. This case also shows that music communities and projects are not just dependent on the resources of their producers. Their participation in the music scene also offers the producers benefits. This reciprocal resource dependence between producers and consumers is also described in research into a runners’ community (Thomas et al., 2013).

Resources from Personal Relationships The second type of social resource comes from personal relationships, which can be used as a form of human resource to fill gaps in the communities or projects or to access essential facilities. This does not simply consist of filling manpower needs, but can also include finance.

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In the case of Community C, promoting a music concert requires a visual image or design to be used in brochures or flyers. Ordering one from a professional service would cost money so the community filled this need through a personal relationship: one of the community members met someone at a music concert, who introduced them to a university student of visual design who was also passionate about the same music. The designer’s passion for the music and their personal relationship with a key participant of the community contributed to a better quality of product. Therefore, filling such gaps using personal relationships can offer not only cost reductions but also quality improvements.

In the case of Project B, in order to record and produce podcast programmes, they needed a venue. However, renting a space for recording and editing is an expensive option for a volunteer project that offers no financial rewards. They were able to solve the problem temporarily through one of the podcast producers who worked as a part-time manager of a media studio at the university where he was enrolled. As a result, they were able to use the space to produce their podcast when no one was using it. He had access as a part-time manager and had personal relationships with people there. The interviewees explained that, without that access, they might not have been able to begin the project.

Resources from Digital Networks The last social resource is related to the involvement of consumers and communities. The interviews showed that resources mainly came from digital networks as they facilitate easy involvement and communication between the community organizers and consumers. The interviewees showed that they know the power of digital networks; one referred to them as a networked space where all related people can promote their communities or events together.

A community member from Community A commented on how the staff who manage online communities are recruited from among the members of the communities. The participation of members, and their efforts and sacrifice therefore form an important resource for maintaining communities. Without the voluntary participation of members of the online community, monitoring inappropriate content

252 and managing members would not be possible. The devotion of staff is also required for the organization of offline events such as gigs by bands formed by members of the community. During offline events, community staff members are needed to perform tasks such as taking tickets outside of venues or organizing and managing members who come to the events.

The members of another community (Community B) showed that they understood the importance of user participation and online communication as important ways of interacting with others. One female member explained the importance of digital networks as follows: “Well, it is impossible for us to do everything ourselves. There needs to be participation. In the case of radio, there is a programme that requires stories. We can’t get them offline so we have been getting them through an online community. … We thought that the online community needed to be revitalized in order to attract people and their stories.”

Using digital networks to interact with members of communities is essential, to keep them energized and to manage them. This is not just an issue that applies to the two communities mentioned above. All communities have to communicate and interact with their members or fans in the digital space. This does not just provide benefits in terms of human resources. It is an essential part of these communities. This will be further explored in Section 7.5.4.

7.5.3. Cultural Resources

Individual and Collective Resources The communities or projects each involve several people, who contribute different skills and knowledge. Each participant’s different competences act as driving forces to maintain and expand the communities or projects. In addition, the skills and knowledge are often shared within the communities.

Key participants’ own skills and knowledge are often crucial to managing a community or project. In one of the cases studied here, producing podcasts requires several skills, including recording and editing them, and presenting. Each

253 participant’s skills and knowledge is used to overcome various difficulties. One participant knows how to record and edit digital audio files having previously been involved in film production. Another participant’s previous experience in broadcasting enables him to present the show. These two participants’ skills and knowledge help them to produce a well-organized and high-quality programme.

This is also relevant to the concert-organizing community (C). One of the participants mentioned that her job in project management in the book publishing industry has helped her in planning the music concerts. Her experience has helped her to develop the concepts for each concert and strategies for attracting audiences. These skills can be obtained by continuous trial and error but her experience has helped the community to avoid that process. In addition, her skills and knowledge can be learnt by any other member of the community who is interested in taking on the role.

Different competences are sometimes shared or passed down so that the communities or projects become richer in terms of cultural resources, and this helps them to carry on even if key participants leave. In Community B, which supports local culture by organizing offline events, the managing staff and the online community change every year. When it is time for a change, new members are recruited, and the existing members spend time with the new participants, passing on their knowledge and skills.

History of Cultural Consumption Cultural resources can also include the participants’ histories. Many of the participants emphasized their personal histories of music consumption and their love of the subculture. Their histories with independent music had attracted them to maintain their involvement in music communities or projects and to participate in amateur cultural production. Some of the history of the independent music scene can be seen in their stories and histories. One interviewee (Community C) in her early 30s was first attracted to independent music when she was in her early 20s: “One of my friends asked me come along to a concert of an indie band… Since then, I have been to (music clubs)

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frequently. It was around 1999. I have grown up with this scene.”

7.5.4. The Use of Digital Networks

The use of digital networks enables the participants to promote their communities or projects. All of the communities or projects have their own websites or social media accounts. Through such channels, they communicate with other users and promote what they are doing. For projects like the podcasts and the video production, there are no offline interactions with listeners/viewers. Therefore, digital media is the only method of communicating with their fans. In particular, social media provides them with an affordable and accessible way of communicating and promoting their content. In the case of organizing offline events such as music concerts and open forums, activities related to the events, such as recruiting participants and selling tickets, are normally done in the digital space. Most of the feedback or enquiries for both online and offline events and programmes comes through digital communication technologies such as e-mail, social media and forums. Therefore, managing online communities is an essential part of these communities and projects. Without their online presence, they would have extreme difficulty communicating with people and organizing and maintaining their activities.

The online space is also a place where members can share their own material, such as photos, rare records, and experiences, with others. Through participation in online communities, members can gain cultural resources such as knowledge of music and the history of independent music from others. Sharing personal cultural consumption and knowledge can produce emotional responses and increase members’ energy through their communication with other members. It can give them a feeling of contributing to the community. In addition, this interaction can expand their social resources. The use of digital media can make these communities and projects richer in terms of the resources they share and the interactions they have. Communication and interaction between users and members through the digital networks therefore involves all three resource types.

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7.5.5. Continuous Resource Integration

Participation in and management of these communities and projects offer the participants the chance to be exposed to new challenges and experiences. From this process, they gain new cultural, physical and social resources. Thus, these projects often influence the participants’ skills development and personal lives. This can be understood as a very personal process and benefit. However, the resources gained are shared and contribute to the management of their community or project. Each participant’s newly acquired resources are either directly shared with other participants or indirectly affect them. Therefore, this can also be viewed as a collective process and a collective benefit.

Life-Changing Experience Through participating in these communities and projects, the participants can gain experience and learn new things. For the participants, participating and managing these communities or projects is not their main job; instead, it is an extra and exotic activity in their daily lives. Participation gives them constant exposure to new experiences and learning environments. This can offer them life-changing experiences, sometimes leading to different careers and perspectives on life.

A female interviewee (Community B) who is studying a computer-related subject, told how she had never had any experience in the cultural sectors before joining the community. The experience had made her consider a career in a cultural industry. A participant from the podcast production, who was involved in the production of a short film, pointed out that he had been able to gain experience in a long-term project as the podcast production had lasted for more than six months. He also commented that it had changed his future career plans. Before starting to produce the podcast he had had the vague notion that it would be good to expand the project. Now it has become reality as some interested people have expressed a desire to invest. As a result, at the time of the interview he was preparing a website dedicated to independent music and planning to organize offline events.

Another interviewee (from Community C) with a job in book publishing told how the experience of organizing music concerts had given her further understanding of

256 her job. She explained how both planning music concerts and working on project management in book publishing required an understanding of people: “This (participating in the community) offers help implicitly with what I am doing. It is helpful for my job and it makes me see things from the position of a researcher. … I work in a marketing department so the department focuses on selling books to people. Likewise, this helps me to study how to attract bigger audiences for our concerts, so it is beneficial.”

Another interviewee (Community C), studying psychology at university, stated similarly that her involvement in the community helped her to study as it enabled her to meet a variety of people and view their different behaviours attending the same concert.

Several interviewees also mentioned that their involvement had had an influence on their perspectives on life and culture. Their actual involvement in cultural production, and their interaction with artists, gave them more of an understanding about artists and ethical cultural consumption, such as buying legitimate products and avoiding illegal downloading. Some interviewees also expressed the view that because the independent musicians were trying hard to produce original material based on their own life experiences, learning about these artists and their lives gave them different perspectives on their own lives and life goals, which they had not been able to imagine previously.

Energy for Life Many of the interviewees agreed that their involvement in communities or projects gave them more energy and enjoyment of their lives. Members of Internet music community A had formed their own band, which was registered as one of the official bands supported by the Internet forum. Their Internet forum encourages members to form their own bands, one of the benefits being opportunities to do live performances. An independent musician who is barely known and has not signed with a record label will find it difficult to get gigs at music clubs, due to the cost involved. However, with gigs promoted heavily in this online community, which has many members, the profits made as a result can be used to pay for renting performance spaces and other fees. Thus, the members can engage in their hobby

257 without worrying about finances. One of the members working in the footwear industry stressed the importance of this: “It is only possible to practice at the weekend; it is hard during the week… So we all wait for the weekend because we are thinking ‘I am going to give a great performance’. Although we are stressed out at work, we hold back and go to the practice session. It is not only about music but also meeting good people through music as well.”

Another female participant in a different community (30s, Community C) said: “When you go to work, it is same every day. This (being involved in a community) is stimulating and gives you energy. It is a different world. After spending the weekend at Hong-Dae, when I get to work on Monday, I think ‘where have I been?’ Especially when I have a great time at the weekend, it is worse… It is such a reinvigoration in my life.”

Participating in the communities not only gives them more energy but also acts as an escape from their reality, which may be stressful, busy and competitive. Participating in a community offers them the momentum to continue with their daily jobs.

This effect not only applies to the employed but can also be seen in the response of this university student from Community C, who is in her early 20s: “I am going to be a final-year student next year. Everyone talks about finding a job. General topics are about boyfriends, marriage and jobs… certificates… grades … The topics are very selective and limited… I know it is time to worry about those things, but I don’t think I should focus all my attention on it. When I come to this community, the emotions I’m suffering from are relieved.”

Energy not only comes from people’s personal emotional responses to their experiences. It can also come from interacting with others and learning from them. One interviewee (from Project B, a university student) said, “I have learnt a lot by talking with them (independent musicians). In fact, it is very hard to be an independent musician. I have been able to get more courage from talking with them directly. I always felt that ‘there were passionate people who pursued their dreams’. Most of the people around

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us want to go and get a job at a big corporation. It is hard to meet people like these (musicians). For their dream, they are doing part-time jobs during the day and they are practising and rehearsing at night. When I hear such stories, I feel as though I have received good energy.”

The way the independent musicians pursue their dream forces him to ask the question of what a good life is. In a society where people often pursue lives that are defined by others, he sees these people as pursuing their own life goals. By interacting with these musicians, the interviewee, who also decided to pursue his own life goal, gains energy, comfort and a conviction that what he is doing is right.

Social Relations Several interviewees point to the fact that participating in these communities or projects has increased their social relationships. The communities or projects are not formed based on social criteria such as age or background. Rather, these people meet because of their passion for music and subcultural consumption. This makes them meet and interact with people with a variety of backgrounds, stories, skills and knowledge. It offers them the opportunity to broaden their social relationships and also to learn from others, both culturally and socially.

This section has examined the resource integration and organization of independent music communities. The findings suggest that the organization and maintenance of the communities are made possible by the integration of participants’ resources that are physical, social and cultural. This section has also shown that resource integration is a dynamic process as participants are devoted to continuous resource integration.

7.6. Conclusion

This chapter has offered findings from interviews with independent music consumers in South Korea.

The section 7.2. of this chapter showed the various consumption behaviours of independent music consumers in South Korea. These were categorized into

259 information-processing and experiential approaches. Under the information- processing approach, three behaviours were identified: evaluation (shaping cultural tastes), investigation (cultivating cultural consumption) and benefit seeking (learning about different worlds). The experiential approach consists of empathy (building intra- and inter-subjective emotion), pleasure (having inter- and intra-subjective enjoyment) and fantasy (imagining self through music). Although the music consumption behaviours are grouped into two different approaches in consumer research, the findings show that symbolic and emotional music consumption is apparent. In addition, it shows that the value of music is individually and socially constructed.

The section 7.3. discussed two frame alignment attitudes found among independent music consumers: fear and responsibility. The emotion of fear shows that music consumers worry about how they are represented to people they are close to and within society. In addition, they are concerned about the co-optation and commercialization of music culture in terms of the structure of independent music culture and the scene they are pursuing. Secondly, the music fans have a sense of responsibility to spread knowledge of the music scene. This responsibility comes from pride, duty and frustration. Although they share a feeling that the development of the area and the increased media coverage have negatively affected independent music and its culture, these music fans show themselves to be more concerned about how to spread the word about the music they love rather than devaluing or abandoning it. Therefore, these two attitudes are to minimize inappropriateness (fear) and maximize appropriateness (responsibility) of independent music culture in South Korea. They want to carve an image of the music culture they are pursuing so as to legitimize their cultural consumption.

The section 7.4. showed the practices music consumers are following in order to create value. The value-creating practices are enabled by the development of new technologies and their use by ordinary people. The technical benefits of these allow users easier access, and link people and content. These practices include acquisition, relationships and engagement, each of which includes different activities, and reasons for their practice. Firstly, through acquisition, music consumers can satisfy

260 their desire to know about music, and gain pleasure from expanding their cultural consumption. In addition, it can give them idea for future music purchases. Secondly, music consumers use social media tools to develop relationships. Through relationships formed in the digital space, users experience emotional joy, become psychologically attached to the musicians they love, and gain social capital. Thirdly, the music consumers are engaged in the practice of collecting, sharing and disseminating their cultural consumption experiences. To do so, they document their cultural consumption, spread content and perform the role of evangelist. This section of the chapter suggests that the value of music is co-created in the digital space.

The section 7.5. of this chapter investigated the organization and resource integration of independent music communities. By adopting the categorization of Arnould et al. (2006), the section suggested that music communities are organized and maintained via the physical, cultural and social resources of the participants. This integration of the participants’ resources is not static. Rather, it is continuous and dynamic as they reinvest the resources they obtain from participating, back into the communities. This reinvestment contributes to their own personal welfare and to the continuity of the communities.

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Chapter 8. Independent Record Labels in the Digital Age

8.1. Introduction

The previous chapter presented, firstly, the consumption behaviours of consumers of independent music in South Korea. The findings suggest that they are engaged with both information-processing and experiential consumption. Secondly, the chapter showed that the consumers pursue two frame alignment attitudes, fear and responsibility, contributing to the continuity of the independent music scene and culture. Thirdly, the chapter suggested that music consumers participate in three value creation and co-creation activities when using digital media. Lastly, the chapter examined the organization of music communities and the resource integration of participants in them.

Just as the independent music consumers have had a significant impact in South Korea, so have the Internet and digital media had a large influence on independent record labels. As Chapter 6 showed, the rise of the Internet has changed the nature of the industry. However, the new media has also offered artists new opportunities to promote their music and connect with their fans. In particular, music fans’ use of new media have impacted on the independent music industry. As was noted in Chapter 6, consumers’ engagement with social media and their own creative expression have offered positive benefits to the independent record labels. Therefore, it is also necessary to investigate how the record labels themselves utilize digital media.

Vargo and Lusch (2004a) point out that consumers are always value co-creators and a service provider’s role is to provide a value proposition. However, some research (Grönroos and Voima, 2013; Heinonen et al., 2010; Helkkula et al., 2012) argues that the main variable is still what the provider can do for the consumers. This view argues that customers should be involved in an environment where a company provide to co-create value. Alternatively, this research states that value can be created in the consumer’s sphere alone, to which a company does not have free access. It emphasizes consumers’ experiences as being important for creating value. Such experience does not have to be actual experience but could include imagining

262 or thinking about, or reading reviews of albums or concerts, before or after actual consumption. Therefore, the experience can be both physical and mental. In this perspective, “value creation becomes an on-going process that emphasizes the customer’s experiences, logic, and ability to extract value out of products and other resources used” (Grönroos and Voima, 2013, p. 135). Holbrook defines customer value as “an interactive relativistic preference experience” (2006, p. 212). In the same sense, Helkkula et al. suggest that “value in the experience is an intrasubjective, socially intersubjective, context- and situation-specific phenomenon that is both lived and imaginary, constructed based on previous, current, and imaginary future experiences and is temporal” (2012, p. 66). This emphasis of the consumer’s experience stresses the concept of value-in-use, the symbolic nature of value and the phenomenological perspective, so as to understand value creation from the customer’s perspective. Although it is understood that the customer’s sphere of value creation is completely isolated from that of the provider, Grönroos and Voima (2013) suggest that it can be accessed through a firm’s efforts or a consumer’s invitation.

Based on this perspective on value and value creation, this chapter will, firstly, suggest the independent record labels’ motives for using new media. Secondly, it will present four processes or practices that are used in value creation and co- creation in the music industry. These are the activities that the record labels carry out in order to access and interact with the value creation spaces of music consumers. The four processes are contacting, bonding, spreading and managing. They are used to increase contact with consumers, develop relationships with them, distribute promotional materials and music, and learn from consumers. Each category contains different activities that the record labels use to maximize the benefits of the new media and increase their interaction with consumers. Thirdly, this chapter will identify the difficulties record labels experience in utilizing the new media. These are divided into four themes: adaptability, uncontrollability, representability and applicability. They derive from internal issues such as lack of competence, and external issues such as the rapid pace of technological developments.

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8.2. The Impact of and Motives for Using Digital Communications Media

Digital communications media have influenced various industries. The independent record labels have not been immune to the transition. They must inevitably find ways to deal effectively with the new ways in which music is consumed today. The three most common responses of the independent record labels interviewed for this research regarding the impacts of and motives for using digital communications media were as follows: (1) They believe it is an alternative method offering new possibilities. (2) They believe it is cost-effective. (3) Those who have experience of using it, have found it to be effective.

For the independent record labels, digital media offers an alternative way to promote their music, and opens up new possibilities for reaching fans. Independent record labels have faced difficulties in promoting their music through media channels such as TV and radio; the only viable promotion channel used to be music magazines, but the sales of music magazines in South Korea have slumped due to economic difficulties and most of the popular music magazines have disappeared to be replaced by webzines. In this tough economic climate, the independent record labels see the Internet and social media as an alternative method that offers new hope. Small record labels that are unable to promote their artists through large media channels believe the technology offers them more power and may eventually even change the power structure of the media and the music industry. According to a vice president of Label A, “I think it is very positive from a marketing perspective. I think it is very positive. Unfortunately, we don’t utilize 100% of it at the moment but I think that considerable parts of the power structure have been shattered, like the difficulty exposing your company’s name unless you can get press coverage. You know that it is very difficult to have that (type of promotion) offline. … Hanging posters. If you consider hanging posters, it should be large quantity”

Secondly, using digital media is regarded as a cost-effective way of marketing compared to offline marketing strategies, such as using traditional media and posters,

264 which are costly. Furthermore, the effectiveness of traditional marketing is unclear for these labels, making it difficult to tell whether it is worth spending money on it: “There aren’t many options for offline promotion. Advertisements on TV are very expensive and it is hard to tell how effective street promotion is. Promotion on the Internet doesn’t require any finances. In the case of offline promotion, we needs to make something (e.g. posters) and it is all about money.” (Label I: President)

Thirdly, those record labels that have used the Internet and social media as a primary space for marketing and communicating with their fans have seen how effective they can be. One of the interviewees (Label E) explained that he had doubts about their effectiveness when he started using these methods, but now believes them to be quite effective, leading to messages, enquiries and feedback from fans.

The independent record labels regard the digital communications environment as a positive rather than a negative for their businesses because it offers them an opportunity to compete with big players in the music industry that have previously dominated the media channels in South Korea. The media environment has in the past been one of the biggest barriers to their attempts to promote their music. They regard digital media as, at least, offering them an equal chance of promoting their music. The next section will show how they utilize digital media in order to realize its potential. It will be identified that they are conducting various strategies to communicate and interact with their fans. Four themes, contacting, bonding, spreading and managing, will be identified. These four co-creative strategies will be discussed in the next section.

8.3. Four Value Creation and Co-Creation Strategies

This research has identified four value creation and co-creation strategies: contacting, bonding, spreading and managing. They can also be thought of as business objectives aimed at increasing the chances of contacting and interacting with consumers. By doing so, the independent record labels can develop relationships with fans and disseminate their messages. Each strategy involves various practices

265 used to achieve different business objectives, all aimed at maximizing the positive effects of digital communications media.

8.3.1. Contacting

Prahalad et al. (2000) argue that, “spurred by the web, digitization of content, high speed wired and wireless networks and new consumer devices and appliances, there is an unprecedented number of touch-points between the firm and the end-consumer”. The record labels consider one of the benefits of digital media to be accessibility: it allows them to disseminate their information and reach fans. Promoting their music via traditional media, and using traditional marketing methods such as flyers, is costly and labour-intensive. The most fundamental issue for the independent record labels with using traditional media is that they lack the power to attract media attention and the finances to enter the media market. However, digital media technology is always there to be used and requires little in the way of finances (Etgar, 2008). Through digital media communication tools, the labels can share their music and promotional materials, including music videos and news, without having to overcome the barriers of the traditional media. Because of its easy accessibility, fans can be contacted without time and space restrictions. Whenever and wherever the record labels or musicians want to do so, they can share ideas, talk about what they are doing and otherwise communicate with their fans. The activity of contacting is important as it is a part of the process of developing a relationship between a firm and a consumer. Due to the accessibility of digital media, functional benefits such as exposure, notifying fans of important events, and reaching a larger audience can also be identified.

Several of the interviewees from the record labels pointed out that there is more possibility of their music and musicians being exposed to the broader public due to the rise of social media. It is easier to notify fans of their projects and news. A firm acts as a facilitator, enabling its customers to create value and to realize value-in-use (Grönroos and Voima, 2013). This has become one of the most important daily tasks for the record labels:

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“We are doing it every day; uploading new music releases, press releases, posters of concerts, music videos and videos from gigs. It is the first job the staffs do as soon as they come to the office… Uploading promotional materials on Facebook or Twitter is the first job they do every day.” (Label E)

The reason for this is that, without constant effort, consumers will not be notified and the record label will lose the opportunity to benefit from voluntary information spreading by consumers. One record label’s CEO further explains, “We should approach them first. We should go and tell them constantly that ‘we are here and we do this kind of music’. We are in a different situation from the past. … In the past, there was no way to obtain information. In the past, the Internet didn’t have any well-sorted databases like it does today. Nowadays, if you just search ‘Naver’, even if the band is unknown, you can get a video. So it is an age in which information can easily be found. In addition, unlike in the past, you can download self-released music from the Internet. Because it is very easy to search for information, we need to go and talk [about our music]. We need to make them search. Go and tell them, and make them search. … It needs to be consistent.”

Unlike in the past, when consumers would struggle to find information about unknown musicians, record labels now have a tool to put information and music on the Internet to be read and listened to by consumers. The CEO quoted above knows that it is the responsibility of the record label to increase the opportunities to expose its music and notify consumers. He understands that, in order to increase the opportunities, work must be on-going.

In addition, anyone can upload, read and share material in the digital space. For both the record labels and the fans, this makes things much more open and convenient than before: “There are more opportunities to gives ourselves exposure. It used to be homepage or community-centred before, so we had to create the web traffic. To supplement this, we used mailing lists. However, at some point, this lost its appeal due to spam mails. When we had new content to share, the advantage of mailing lists was that we could say, ‘new content has been uploaded so come and see it’, but at some point this showed its limits… Therefore, a few other ways

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have emerged to publicize our content.… The convenience of social networking services is that relationships are formed. It is subscribed to based on relationships.” (Label I: President)

The above excerpt shows that, unlike in the past, fans no longer need to visit the record label’s or musician’s website and be a member of a community (which may require a stringent joining process). More recent digital media forms, such as social media, offer users much more convenience and freedom as all of the information simply appears directly in a user’s account. All information-sharing or interactive activities used to happen within the boundary of a website or community but now information can move freely from user to user. Anyone who is interested can join in with the communication and interaction. This is an important feature that allows fans or consumers to contribute to value co-creation. Information and knowledge from the digital media can be a source of value creation for music fans. Payne et al. point out that “one key aspect of the customer’s ability to create value is the amount of information, knowledge, skills and other operant resources that they can access and use” (2008, p. 86).

Social media networks also offer the possibility of reaching the broader public, nationally and internationally. It is not just person-to-person relationships that are facilitated; rather, social media encourages a mind-set in which all individuals’ relationships are inter-connected. Moreover, these relationships are not limited to the national level. Users can have relationships with people in different countries and continents. Thus, a culture from one country can spread to another one if it can attract people, despite different social and cultural backgrounds. One interviewee (Label D), a hip-hop musician who also runs his own record label, expressed the fascination of being able to connect with fans globally: “All people in the world are using Twitter. What I really feel is great about using Twitter is that, unexpectedly, overseas fans are formed. Countries like China, Taiwan... European countries such as France, Germany, Italy… Even African- American people love my music. I never imagined someone living in Harlem would listen to my music.” (Label D)

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Several other interviewees also talked about the Internet’s power to connect with fans abroad. The interviewee from Label H talked of the business opportunities in different countries: “I take a positive view because one thing I know for sure is that it can expand the pie. It is known that the number of Facebook users is more than 800 million people worldwide. … It is possible to promote yourself through a Facebook page or app. … I used paid advertising on Facebook as a trial targeting Southeast Asia. … You can target it. I am not sure all of it is going to be returned as purchasing power but interest was quite overwhelming. I was very surprised.”

This label owner sees an opportunity to be connected with consumers in different countries through social media tools that have no geographical restrictions on communicating and interacting with people. This issue is connected to the managing of relationships, and will be discussed further later in this section but it is enough to state here that the record labels are fully aware that the digital media tools offer them an opportunity to reach overseas consumers.

8.3.2. Bonding

The accessibility and convenience of digital media for contacting consumers, facilitates closer relationships and interaction between fans and musicians, and also encourages gatherings of fans in the digital space. It therefore promotes bonding between fans and musicians, and also between fans. Service-dominant (S-D) logic emphasizes the importance of relationships. Payne et al. suggest, “evolving to S-D logic for marketing represents a shift in marketing focus from designing relevant products to understanding the potential for co-creating relationship experiences” (2008, p. 86). It is claimed that value co-creation can be realized whether a firm tries to access to the value creation networks of consumers or a firm is invited by consumers to join their value creation space (Grönroos and Voima, 2013). It is therefore critical that the staff of record labels are committed to developing strong relationships with their customers. According to Grönroos, “the success of relationship marketing is highly dependent on the attitudes, commitment and performance of the employees. If they are not committed to their role as true service employees and are not motivated to perform in a customer-oriented fashion, the

269 strategy fails” (2007, p. 35). Three different approaches to maximizing bonding and interaction can be identified here: active approaching, active reacting and participation encouraging. In addition, it is shown that one of the advantages of bonding is the moral support it offers to the musicians.

Active approaching concerns the record labels or musicians approaching and talking to their fans. Such activities create friendliness and closeness with fans. Because digital technology is now used daily, musicians use it to communicate with their fans and friends. All of a person’s activities can be broadcast, and this is what musicians do now, often on an hourly or minute-by-minute basis. Such communication can show that the daily lives of musicians are not too different from the fans’. The daily use of technology means that the fans are no longer so concerned with gossip, which used to be the dominant consumer material for fans. It also offers the chance for musicians to share their lives and life stories with others. With traditional media, the record labels would be in a position to control how much of the musician’s private life was accessible to the public, but now the technology and the media is in the musicians’ own hands and thus uncontrollable.

Digital communications media is not limited to providing updates of the account holder’s opinions and experiences; musicians and record labels can also reply to fans’ comments and vice versa. One interviewee (Label J: Manager) points out, “It has become very easy to contact people personally through Facebook or Twitter. I have no idea about the past, but now communication can be started if you just leave one comment like ‘Oh! I really enjoy your music’. And you can also gain some understanding about what kind of person he/she is through a Facebook account or Twitter… It has therefore reduced the gap… like awe, unnecessary awe (that consumers used to have about musicians).”

For some fans, who would feel awkward at expressing their appreciation in person, because of shyness, their age or their social background, the digital space offers a much more comfortable environment in which to interact with musicians they love. It is possible to approach and interact with fans, regardless of personal or social barriers.

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In this environment where communication is valued more than simple admiration, companies are required to approach their consumers and establish relationships with them. There are two different levels of relationship in the online space. The first is based on a user’s personal relationships, such as family, friends and colleagues. The second is based on their hobbies or interests, such as cultural, social and political issues. Ordinary people use the digital media to communicate, share and express their personal interests in culture, politics and social issues. As networks are formed based on common interests, some record labels actively search for relevant networks and try to approach them. Once they have connected to a network and thus included it in their own network, messages or digital materials can be delivered and shared effectively. The president of Lable I explains: “When Twitter didn’t exist, the most common job was searching for everything mentioning us on search engines. If there were interesting things, we left messages. Now, I search for our artists’ names on Twitter, follow people who mention our artists, and interact with them.”

This excerpt demonstrates that the record label does not sit back and wait for consumers to follow its social media accounts. Rather, it actively searches for and approaches people who are interested in its music and musicians. By doing so, it is building a network of fans. Building networks is critical in order to benefit from social media, where people share information they consider worth sharing. This can be achieved by building a network of fans, as Label I does, or, as Label H show, through an indirect approach of building relationships with people in the music industry: “It is a network. On Facebook, we have to establish a network. We are building a network targeting people who are related through music, such as music college students, people who study music abroad, professors, and session players. We are developing a network with people like them.”

It is common to be connected to people in the same industry and, in such a small industry as South Korea’s independent music industry, most people will know each other. However, this record label is going further to establish a network of people

271 who are more broadly connected to the music industry. This ensures it connects with people with different roles in music.

The second approach to bonding is active reacting, which can cover various topics and situations. It can include simple enquiries such as ticketing and schedules, a survey to ask fans which songs they want to hear at the next concert, or conversations between fans as a musician performs on TV or radio. In the digital media, it is important to react and respond appropriately and in a timely fashion. The interviewees also explained that consistent and sincere responses from the record labels and musicians were necessary, otherwise it was meaningless. When a company is devoted to responding and reacting to its consumers’ enquiries and demands, the consumers will feel that the company cares about them, leading to further participation and interaction. Grönroos and Voima argue, “service providers’ opportunities to co-create value with customers during direct interactions influence not only customers’ value creation but also their future purchasing and consumption behaviour” (2013, p. 147).

Lastly, participation encouragement is required for bonding as this encourages fans to gather and form communities. The digital space allows for easier forming of communities or community-like spaces by consumers (Prahalad and Ramaswamy, 2000). Koh et al. define a virtual community as “a group of people interacting predominantly in cyberspace for their own common interests, relationship building, transactions, and fantasies” (2007, p. 70). Likewise, in the social media space, community-like spaces can be formed around loved brands, musicians or TV programmes. Especially on Twitter, every conversation is open and can be read by anyone. As social media allows users to follow celebrities, see their tweets and leave comments on them, music fans can even track musicians who were famous in the past. An example of this is suggested by an interviewee from Label G: “In our record label, there is a musician, xxx, and I think he/she has benefited from Twitter. The musician used to be a star in the 90s... He/she was able to gather fans through Twitter. As the fans, who are now middle-aged men and women, started using Twitter, they were able to connect with the musician and find out how he/she was doing... No matter how well music is produced, if people do not know about it,

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it will not sell well. But this musician’s music sold well. In other words, Twitter gathers fans together.”

However, gathering fans is not enough. It has also been identified that encouraging communication and interaction between fans is important. It is apparent that both viewing and posting activities are important for the survival and flourishing of a virtual community (Koh et al., 2007). The vice president of Label A shows in the following excerpt that he understands that, in the digital space, encouraging the participation of consumers is more important than the volume of information the label uploads: “I think that a company that communicates (with its consumers) by any means is in a favourable position. There is no merit any more in simply throwing or exposing as much information as possible at consumers. … Media coverage is all about volume. It is limited. There is no limit (in the digital space). The important point in traditional media is how much you can occupy it in advance. … In the online environment, you also have to occupy in advance, and should receive enough exposure. But the exposure is not just about volume, the important thing is how much feedback you can get.”

In the digital space, a company can upload as much information as they want but, unless it is read and shared by consumers, it will disappear among all the other companies’ promotional materials in the digital space. Without active participation, fans will feel that it is not a place where they can talk and are unlikely to visit again. Active interaction between fans helps to form a lively community space and community that is rich in terms of the resources shared and conversations had. Therefore, firms must make an effort to encourage fans to participate. A lively community will become a place where diverse participants with different backgrounds share and negotiate a variety of resources, stories and meanings, just as Arnould and Holbrook argue, from the perspective of consumer culture theory, that “the marketplace provides consumers with an expansive and heterogeneous palette of resources from which to construct individual and collective identities” (2005, p. 871).

While attempting to maximize interaction, firms should also be careful to minimize disputes. According to one interviewee,

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“When you upload writing or materials, you should be very careful because it (social networking services) does have a great ripple effect. If you upload something and it produces bad feedback or a backlash, actions must be taken to deal with the issue, such as taking it down or clarifying the issue.” (Label E)

This negative aspect of digital media will be further explored in section 8.4.

The interviews also suggested that, through interaction and communication with fans, musicians can gain moral support. Several interviewees indicated that interacting with fans who support their music and share similar ideas about social and cultural issues provides them with a sense of being appreciated, and the energy to continue their careers. By talking and connecting with fans in the digital space, musicians feel there are people out there who love their music and support them. In the case of the musician from Label G mentioned earlier, the musician was able to regain the energy to create music again. The label owner commented, “In the case of xxx, the musician thought that no one cared about his music any more, but now he has got energy again. ‘There are people who are still interested in my music.’ Because he has seen that people respond to what he says and they tell him they love his music. … I think that will give him the will to keep creating music.”

A musician and a manager of record label J responded similarly: Interviewer: why are comments from and communication with fans on social media important? Interviewee: Hmm, of course it will differ from person to person. In my case, it is satisfaction. Interviewer: Satisfaction? Interviewee: The first thing is to share music, but if that were the only reason, I would not need to do performances... The feedback from gigs, I can feel it while I am doing it, but I am not sure if it is genuine or not. I think feedback coming from social networking services is more honest and frank. It is not words spoken in front of me. (If the feedback is good,) I think the performance must have been great.

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8.3.3. Spreading

In the social media space, one of the most powerful effects is spreadability and the reproduction of content (Green and Jenkins, 2012; Jenkins et al., 2013). Jenkins et al. define spreadibility as follows: “[it] refers to the potential – both technical and cultural – for audiences to share content for their own purposes” (2013, p. 3). Due to this effect, digital materials can travel from person to person and from network to network: “The possibility that social media has brought is that people do retweets when content is fun, so the advantages of it (social media) are spreading. Due to this force, much bigger numbers of people see or read… Therefore, the small-sized companies in this field are feeling the power of the effect much more.” (Label B)

Digital communication makes it easier to reproduce digital content. On social media such as Facebook or Twitter it is not difficult to reproduce another person’s content in one’s own account. It can be done with just one click. In addition, the media is interconnected and networked. The technology allows a user to share and move content from one media format to another. In this environment, the content produced by a person does not only reflect their own experiences, interests and opinions; rather, it can be moved around and used in different ways to reflect other people’s preferences and expressions as well. Therefore, it is not products or services that are considered as offering value; rather, value is created through experiences (Prahalad and Ramaswamy, 2000). In addition, this suggests that value is not only realized through actual experiences or direct interaction with a service provider but can also be created through indirect interaction, such as by reading information and reviews (Heinonen et al., 2010; Helkkula et al., 2012). Hence, it is possible to share personal experiences, which are the core of value creation in the networked society. In this environment, value creation is possible not only at the individual level, but also at the collective level (Grönroos and Voima, 2013). Therefore, value and its creation are understood as individually and socially constructed processes (Edvardsson et al., 2011; Helkkula et al., 2012).

Anyone can be involved in communication, read conversations and leave their opinion. No membership in any strict sense is required in order to do so. As the new

275 forms of digital media are more open and offer more autonomy in terms of communication and interaction, they help to gather people and encourage interaction around topics they are passionate about. In closed communities, all communication is kept within the community and it is hard to imagine it being shared with people outside of the community. Jenkins et al. (2013) argue that companies should try to forget any traditional sense of community that was based on “stickiness” of content, as this is no longer attractive to people. They criticize that, although stickiness offers a company an easier way to measure statistics such as viewing or visiting numbers, it does not reflect people’s digital media use today. Therefore, rather than trying to confine consumers’ activities through content, a company should encourage open participation and the spreading of their material across diverse social media forms. As both the user relationships and the media are interconnected and networked, digital content can be spread to unexpectedly large numbers of people. Green and Jenkins, who point out the importance of spreadability, argue, “audience members are using the media content at their disposal to forge connections with each other, to mediate social relations, and to make meaning of the world around them” (2012, p. 123).

For record labels and musicians, their content can reach people who have never heard of them before. Research shows that referrals in online communities improve customer acquisition (Trusov et al., 2009). Other research reveals that consumers’ perceptions of brands and buying decisions are increasingly influenced by social networking services (Jansen et al., 2009). For instance, a positive review or feedback, and digital materials such as videos or audio files, from a fan of a musician could be shared with person A in the fan’s digital network, and the shared content will then be exposed to other digital networks of A. The digital space is, therefore, a space of unpredictability. However, this is not necessarily negative as it often causes unexpected, successful outcomes: “For instance, we had made the utmost effort to promote our music on the Internet. Well, we got large amounts of feedback that we could not deal with. Therefore, it was spreading that much. … There were cases of massive sales because people talked about (the excellence of the content).” (Label A)

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The above comment indicates that it is not media companies who control the spread and delivery of media messages any more, but users and consumers. It is their decision whether content will be shared or discarded. A few interviewees pointed out that they need to satisfy the desires of their consumers or fans, such as for play or fun, which are categorized as hedonic values (Holbrook and Hirschman, 1982). In this environment, as one interviewee pointed out, a company’s role is to play with consumers in the digital space. Hennig-Thurau et al. also argue, “today, the flow of information about a brand has become multidirectional, interconnected, and difficult to predict. Marketers have lost control over their brands, but now participate in a ‘conversation’ about the brand” (2010, p. 313). The power of audience participation lies in the fact that they can act as promoters; if they decide to spread content, it can become a popular phenomenon.

A recent example clearly shows the ability of the audience to act as promoter, and the power of spreadability. The case of Jang Ki-Ha and the Faces, who became a phenomenon in 2008, was mentioned earlier in Chapter 6. In 2008, the band had released a single album, manufactured by staff from the label, and the musicians themselves, from pressing to packaging. The band was barely known to the public, but this all changed suddenly when users of an online community, DC Inside, which discusses everything from philosophy to entertainment, decided to spread content related to the artists. In this community, the frontman was regarded as a religious leader and the community members created and shared user-generated content, such as composite photos and videos parodying the band’s distinctive dance style and music, having fun with it and expressing their admiration. When the popularity exceeded the community level, the band reached the broader public and became a cultural phenomenon.

Another case is Psy’s Gangnam Style, which features on his sixth album, released on the 15th of July, 2012. Soon after the release of the album, the song became a hit single in South Korea, dominating digital music sales and traditional media coverage. His distinctive dance moves and the song’s music video were enough to attract music fans in South Korea, who found it funny and joyful. No more than two weeks after its first release in South Korea, the music video reached people overseas

277 through Internet video services such as YouTube. Then, videos showing the reactions of people in different countries to the music video were shared on the Internet. Celebrities like T-Pain in the US and Robbie Williams in the UK shared their thoughts on the video on social media such as Twitter and their blogs. Videos parodying Gangnam Style began to appear. Within a month of its initial release, the song became a worldwide hit. The artist himself has now entered the international market, signing a management contract with Scooter Braun who also manages Justin Bieber, and performing at various special occasions, such as at Time Square, New York, on New Year’s Eve. The phenomenon of Psy would not have been possible without social media such as YouTube and the people who use such media. The song was not released for the international market and the artist had no intention to make a global hit. It was all achieved by people sharing the video, discussing it, and parodying it.

The reproduction of content is not controllable by a single company. However, the record labels do have some ideas on how to encourage the reproduction of content. As Grönroos and Voima (2013) suggest, a firm can directly and actively influence consumers’ value creation. There are two ways of doing this: the first is related to formatting content and the second to content delivery. Content should be formatted so as to attract and persuade readers. Social media users generally demand simple content or information, presented clearly. Some of the interviewees suggested that they do not simply or thoughtlessly leave messages on their social media accounts. They try to find the most effective way of presenting a message. Several of the interviewees mention the importance of readability of content, one points to the mystification of content and another record label (Label I) acknowledges the value of the differentiation of content when promoting the same musician or album, as explained below: “If we leave the same tweets, constantly, it will look like junk mail. For example, to promote a gig, we first leave a message to inform people about the concert and where they can buy tickets. If we keep uploading the same message time and time again, readers will get very bored and consider it spam. If, the first time, you make an announcement about booking, the next time you include with the announcement an interview with a musician… And then you can include with the announcement a teaser video. Then, although it

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contains same details each time, it also offers different content as well.”

The important issues concerning content delivery are the frequency and timing of content exposure. Several interviewees suggested that content or information needs to be offered continually in order to increase the chances of catching the users’ eye. In the social media space, millions of people leave comments and upload digital material. Therefore, the chance of one specific piece of content catching users’ attention is not high. To solve the issue, one interview comments on the “need to create exposure continually. Especially in the case of Twitter, the numbers of tweets an individual may read is now very high as the number of users has increased so much. But most of these messages are missed. So a message needs to be put out in a different time slot. Sometimes, although it has been promoted for a month, there will still be people asking me the date of a gig right on the date of the gig. Therefore, I think it is quite important to continue creating exposure constantly.” (Label I: President)

However, a few interviewees argued that constant exposure can annoy and irritate users and that occasional use is more effective. In addition, the timing of content delivery is suggested to be an important feature. Two different time periods are suggested to be key: after lunch and around midnight, before people go to bed. The lunch time slot was thought by some to be one of the most active times in terms of using social media; thus, content needs to be updated around this time in order to attract people.

8.3.4. Managing

Using digital communications media also helps the record labels to manage their businesses. It offers two benefits: assessment of the current business performance and strategy development. Firms can use the technology to assess and monitor feedback and business performance, and to develop new content and carry out business planning. If the previous activity (spreading) depends on consumers’ or fans’ behaviour and decisions, managing is conducted at the business level. It concerns how well the record labels or musicians deal with the feedback or criticism

279 that results from contacting, bonding and spreading, and use it to improve their performance and relationships with fans. Dealing with information and responding to it well has become an essential capability for co-creating value. Payne et al. point out that “value co-creation demands a change in the dominant logic for marketing from ‘making, selling, and servicing’ to ‘listening, customizing, and co-creating’” (2008, p. 89).

Using digital communications media helps companies to assess their business performance. Several interviewees suggested that social media helps them to gain feedback from fans and audiences that was previously difficult to get hold of, which they can then assess and evaluate. Although it may be hard to accept harsh criticism, the interviewees mentioned that it is criticism rather than positive comments that eventually helps them to assess their current position and make improvements. For instance, it is now possible to search for reviews of performances or to receive feedback directly from fans. By assessing concert feedback, they can make swift changes to improve the satisfaction of future audiences: “It seems that this feedback is helpful, such as which parts of a performance weren’t good enough. We, at our company, do monitor gigs, but these are concerts that we watch every day, so we get used to them.” (Label I: Media)

Another interviewee (Label J: Committee Member) shared an experience that shows how social media can harm record labels. The record label announced the name of a party to be held, which could be translated as ‘Big Dick Show’, although the people who had thought up the title had clearly intended a different meaning as it was an abbreviation of different words. However, it turned out to be very provocative and some people claimed that they felt sexually harassed by it. People condemned the record label on social media and the label had to apologize for the controversy. The interviewee explains the implications of the controversial event as follows: “We were blamed a lot. … However, the criticism has ended up being positive because we are not going to make the same mistake again. So, criticism is one way of interacting. … We can make swift improvements from criticism.”

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This incident taught the label a lesson that they needed to be careful in how they organized their business, as they saw how failing to do so could provoke consumer resistance. If they had failed to recognize the gravity of the issue on the digital space, it could have brought about even fiercer reactions from consumers. Although the event itself was not a pleasant experience for the label, through its quick response and apology it was able to reduce the controversy.

Feedback does not only come from consumers. Professional feedback from the music industry can also be beneficial. People in the music industry who are digitally connected can exchange opinions and suggestions. Feedback from professionals can be extensive in terms of the production of music and concerts, and promotional materials such as music videos. It can be more critical than that from consumers, as it is based on their own experiences, trial and error and the feedback of their own fans. In some senses, this is a form of knowledge and know-how exchange and transfer. Möller and Svahn (2006) talk about business nets that stress knowledge sharing and value co-creation in the relationships between companies. Akaka et al. assert that, in the business nets, “knowledge is created and recreated through network interactions, rather than merely distributed or disseminated” (2012, p. 26).

Another way that the record labels monitor their businesses is by using data they extract from using social media and the Internet. Data on labels and musicians is shared on the Internet and can be tracked by searching the web. Thus, labels can amass reviews and comments on their music and musicians. Some of the interviewees also suggested that social media such as Facebook and blogs offer metrics that they can review to maximize the effects of marketing. At a simple level, Facebook provides data about its users, such as their ages, locations and activities. Twitter shows the number of retweets and allows the path of the retweets to be tracked. Blogs offer data such as numbers of visitors. Hoffman and Fodor (2010) indicate the importance of social media for increasing brand awareness, engagement by consumers and the word-of-mouth effect. The authors point out that metrics from social media spaces “are important…because they let marketers measure the bottom- line impact of their social media efforts” (2010, p. 49). In the long term, establishing and maintaining databases of customers is a desirable strategy as “databases can be

281 used for a variety of marketing activities, such as segmenting the customer base, tailoring marketing activities, generating profiles of customer types, supporting service activities and identifying likely purchasers” (Grönroos, 2007, p. 34). However, the record labels also point out that such data-gathering activities are still at an early stage, and they currently lack the ability to fully benefit from such data. The concern that using metrics to measure and monitor the performance of customer relationship management is not well developed has been pointed out for companies in general (Payne and Frow, 2005).

Engaging with social media also helps companies with business planning and developing new content. The same data referred to above can also be used to plan for the future. By reviewing the influx of users on social media, labels can target the next possible market abroad. By analysing the effects of marketing in the digital space using simple metrics such as numbers of tweets or good reviews, they can forecast the possible success of future content or events. The interviewees recognized these benefits; several mentioned how they had forecasted and achieved their targets for small gigs by using social media to promote their content and events. One interviewee (Label G) labelled it a means to achieve “economic effectiveness” in terms of promotion and marketing, meaning that, for the record labels, in the case of small concerts, it would not be desirable to conduct national, big-budget marketing campaigns. Instead, they can use social media to inform fans. Another interviewee (Label B) expressed a similar view: “In the past, selling records came first and then we could attract people to gigs. However, this has changed completely. Now, gigs come first and records or digital music follow. … Especially, in the case of small gigs, promotions in (digital) spaces with strong contacts are influential.”

More fundamentally, using social media can offer an understanding of the fans, enabling the targeting of consumers, as one interviewee (Label G) argues: “It is very valuable information, even if it only shows what kinds of people follow us. It is not about numbers and the number of followers. I can look into these people. If I invest a little time, I can look into what kind of things they write, their preferences and how they use social media.”

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The understanding and evaluation of consumer groups can be used to develop future marketing strategies and forecast possible trends. Therefore, the social media space offers the possibility to plan, forecast and develop marketing strategies using both quantitative and qualitative methods. It is a place to gain not only quantitative data derived from digital technology, but also a qualitative understanding of the market and the consumers. This is knowledge that is a key operant resource in S-D logic. Understanding customers’ value-creating processes, Payne et al. (2008) argue, should be based on both hard data, such as measures, and an understanding of the customers’ experiences and processes. Heinonen et al. argue similarly, “instead of focusing on what companies are doing to create services that customers will prefer, … the focus should be on what customers are doing with services and service to accomplish their own goals” (2010, p. 534).

The data and interaction that occurs through the use of social media can also contribute to the development of new content. Helkkula et al. point out, “it is important that service organizations recognize that future service innovations and development ideas can originate from service customers’ imaginary experiences” (2012, p. 70). The interviewees mentioned that, by monitoring the social media space, they can learn about consumer needs, such as the kinds of gigs or merchandise they want. According to an interviewee from Label C, “If fans say ‘we want you to play the new album in your next gig’, we have to capture that information by monitoring. We have to put it in the next gig. If there is demand for a special edition an album, we have to make it. Fans may ask for a live album. In that case, we would assess the demand and feasibility and then, if it sensible, we have to go for it.”

Ideas for future developments can, therefore, be obtained by listening to the voices of fans and consumers.

In addition, social media can be used to broaden the fan base. One possible strategy, as one interviewee (Label I: Media) suggests, is to hold a joint gig, allowing the fans of one musician to find out about another. Monitoring the digital space can provide information about musicians’ fan bases. Then, joint events can be put on between

283 musicians with very different fan bases. Thus, social media can be used both to retain existing consumers and create new ones.

This section has presented the value creation and co-creation practices that are conducted by the independent record labels, divided into four themes, contacting, bonding, spreading and managing. The findings show that the record labels utilize social media in order to connect with their fans, effectively spread their message and learn from their consumers’ comments. However, there are also some negative aspects of digital media and these will be discussed in the next section.

8.4. Concerns and Limitations Concerning Digital Communications Media

Several issues can be identified regarding the use of social media by the record labels and the impact it has on them. There are some uncertainties and risks in the use of media and the co-creation of value. These include both internal issues, such as the utilization of social media, and external issues such as swift technological change and its impacts. The issues are categorized under four themes: adaptability, uncontrollability, representability and applicability.

8.4.1. Adaptability

The issue of adaptability includes three different concerns: the emergence of new media forms, the increase of work and disparity in use. The first of these comes from the co-existence of different media forms. Although the importance and effectiveness of marketing and promotion online is well-recognized, this does not mean that there has been a complete transition from traditional media and street marketing. It might be fair to say, therefore, that marketing in this era is a mixture of both traditional and digital (Hennig-Thurau et al., 2010).

This implies more work for the record labels and their staff, which is the second concern. Materials need to be uploaded to the online space constantly, and feedback and communication with fans must be dealt with. Moreover, there are various forms

284 of digital media through which the labels may distribute content and interact with fans. The emergence of new media forms thus increases their work. Over the last ten years, the digital technology and media have been changing rapidly. Such change requires continual learning and adapting to new technologies, which can be stressful for companies. In addition, it creates uncertainty in terms of business management. However, the concern is that this increase in the amount of work done does not actually result in the growth of the record labels or an increase in financial returns. In addition, it may be difficult to find people who are specialized in social media marketing due to financial constraints. Thus, there are difficulties in terms of developing and improving capabilities and competence in marketing. The capability issue will be discussed further later.

Thirdly, there is disparity in the use of digital media. The interviewees pointed out that, although it has become very important to promote and connect with fans through digital media, the use of social media depends on the personalities of the musicians. One interviewee (Label G) says, “After all, someone who wants to show something and to talk would like to use Twitter and someone who wants to interact with others with his/her present persona is able to use Facebook.”

This demonstrates the tendency of the record labels to leave the use of social media upto the musicians themselves.

8.4.2. Uncontrollability

The digital media space is not something that companies can control. The spread of content depends on the users or fans. It is always possible for content to simply disappear without any consumer interest. Some interviewees describe it as simply throwing something into the digital space in the hope that it will attract someone’s attention and survive among the fierce competition.

Another issue with uncontrollability is that a company has no control over what kind of content or conversation will be shared (Aula, 2010; Muniz and O’Guinn, 2001). Obviously, the digital space is a place where everyone can criticize, express their

285 feelings and point out problems. However, there is also the possibility of it being used to circulate false information, or of a musician’s creative output being used in an unacceptable way. This is a relevant issue not only for small companies but also for big corporations. A recent case in South Korea clearly shows the dangers of the web. A pregnant customer of a branch of a franchise restaurant reported on social media that she was badly treated by a waitress at the restaurant. The most striking part of the story, which provoked public anger, was that the waitress had kicked the pregnant customer in the stomach. While the issue was being investigated, the story was shared and delivered across social media, and the public expressed anger towards the restaurant and the waitress. However, when the investigation was finished, it turned out that the person who was kicked was the waitress. Although the truth was eventually revealed, the company was not able to avoid a significant fall in sales across its branches, and damage to the brand. In this age, managing reputation is regarded as an important part of managing an organization. Aula argues, “from the strategic management point of view, a major change will likely be the shift from a world of careful planning to one of continuous uncertainty and risks. Because of social media everything an organization does is profoundly public” (2010, p. 48).

8.4.3. Representability

The impact and the effect of the digital communications media are obvious, and using the media has become an essential and basic task, but the interviewees also expressed the view that the traditional media still has a significant influence. They clearly emphasized the limits of the digital space. Through digital technology, it has become easier to reach specific groups of people who are actively engaged with a particular cultural phenomenon. However, reaching the general public is another issue, which requires engaging with the traditional forms of media such as TV and radio. Therefore, although online media can encourage the emergence of new cultural phenomena, at some point, the power of the traditional media is required as well. This means that there is a missing link between the networks of the general public, and the networks of subcultural consumers. Reaching the general public from the networks of subcultural consumers is not easy and cannot be achieved through

286 the support of the subcultural consumers alone; support from the traditional media is essential.

In this sense, several interviewees expressed their concern by describing the digital space as a biased and one-sided world. Some of the interviewees admitted that, because the interaction and communication mostly happens with their fans, most of the feedback and messages are positive. Blazevic and Lievens (2008) also identify this issue in research on customer knowledge co-production in electronic services. They found that a customer can act as an active informer by reporting problems, concerns and feedback. However, limited numbers of customers actually participate in this process, creating an issue with representativeness. The interviewees from the record labels clearly understand that the feedback they receive from the online space does not reflect the view of the general public, as a member of staff from one of the record labels (Label I: Media) explains: “Personally, social networking services offer great help for promotion. Certainly, there are some aspects to overcome when using it actively... Not everybody uses social media. It seems it is mainly used by students and white-collar people. Limited groups of users use it. We certainly feel it is a necessity to find a way out (to reach the broader public) when using it (social media).”

However, encouraging participation is not a simple issue. Although anyone can participate in the digital space, there is an invisible barrier preventing firms from accessing the general public. One interviewee points out that some of the characteristics or rituals of fandom can discourage the general public from joining. What counts as ordinary behaviour in the cultural consumer community can be thought of as bizarreness and eccentricity by others. In the digital media, the word choice or way of speaking about a cultural phenomenon acts as a barrier. In other settings, barriers could be formed by appearance, such as hair style or dress code, or even by particular behaviours. The distinctive style of a cultural consumer group can be used by general consumers to stereotype them (Kozinets, 2001), distinguishing between what is peculiar and what is common. This stereotyping of a particular group in a negative way will make it even more difficult for the record labels to

287 attract the broader public. On the other hand, this distinctiveness can sometimes be shared with the broader public and used to overcome national and cultural boundaries (Fox, 1987; Schouten and McAlexander, 1995; Stratton, 1985).

8.4.4. Applicability

A lack of capability and competence in utilizing digital media is a common issue among small record labels. They may lack the capability to exploit the media, and the small scale of their operations and lack of financial returns may prevent them from hiring expert knowledge or support. One interviewee (Label I: President) who told of how his record label is trying hard to fully utilize digital media, explained that the use of social media is heavily focused on the distribution of information to fans and consumers. The interviewee said that, in order to fully exploit the digital media, it will be necessary to take an analytic approach to the data obtained from using social media, and to encourage participation. Other interviewees also talked about operational problems with using social media in that the focus has been on disseminating information rather than facilitating interaction with, or participation by, fans. The labels understand that encouraging participation and interaction between fans is desirable if they are to invigorate their networks and maximize the effects of their promotional and marketing activities. However, it is not clear to them how they can fully utilize social media.

In the interviews, one particular issue emerged concerning the use of social media: the balance between the formal and the informal, and the commercial and the personal. The interviewees pointed out that social media will not be effective if it is used too commercially. One interviewee (Label G) commented that, in his experience, if a social media account gives consumers a feeling that it is an official place devoted to promotional and marketing activities, then it is likely to fail to attract fans or facilitate interaction with them. The interviewee argues: “When it is based on credibility, so the way a person thinks or speaks is helpful to other people, then that person’s business information will also be trusted … If people consider it is only for promotion, they won’t give it a careful look. It is more influential if it actually makes the person feel

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something. It is observable that the (social media) accounts that only promote their products are not that influential.”

Another interviewee (Label I: President) expresses a similar concern: “A difficult issue with music promotion on social networking services involves a person’s character... It contains issues from their private life to everything else. It is hard to promote here carelessly. If it is thought of as too commercial (by the consumers), it will be damaging (for the musician and the record label).”

The issue the record labels face is not unusual; Etgar (2008) suggests that consumers are more willing to participate in co-creation when it involves emotional responses such as trust and empathy. Trust can emerge when something is based on the expectation that favourable past experiences will lead to positive future interactions (Preece, 2002). Grönroos (1983) shows that the opportunity to engage with empathetic partners offers a greater chance that consumers will participate in co- production. Therefore, for the record labels, the task is to take a balanced approach, and interact with their consumers in ways that make them feel.

This section has shown the difficulties that the independent record labels face in utilizing the social media. The difficulties are categorized into adaptability, uncontrollability, representability and applicability. This section has also shown some of the limitations of digital media for the independent record labels, occurring due to the rapid technological developments, the small size of their businesses, their lack of capabilities and competence, and the limits of the digital media itself.

8.5. Conclusion

In this chapter, the findings from the interviews with independent record labels have been discussed. The discussion was divided into, firstly, the impacts of digital media, secondly, value creation and co-creation practices, and lastly, difficulties with utilizing digital media. Thus, this chapter has shown the reasons why the labels engage with social media, the ways in which they utilize it and the constraints that prevent them from fully benefiting from it.

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The first section showed that the record labels are not exceptions to the general finding that the emergence of the new media has changed the ways a firm interacts and communicates with its consumers. In the independent music industry in South Korea, the transition has occurred due to the benefits the labels can gain from using social media. These benefits are threefold: Firstly, the record labels have witnessed that social media is an alternative approach that offers them new possibilities for promoting their music and interacting with their fans, which the traditional media has failed to offer them. Secondly, using social media is cost-effective for them. Unlike traditional marketing channels such as TV and radio, accessing social media does not require any significant costs, and allows the labels to connect with their core fans. Thirdly, their experience tells them that social media is an effective promotional tool. This easily accessible and effective media form has provided hope that these record label may be able to promote their music and compete with the mainstream music companies in South Korea.

The second section of this chapter described four value creation and co-creation strategies that the record labels are using to maximize the effects of digital media. Four objectives, contacting, bonding, spreading and managing, were also identified. The labels use different practices to achieve each objective. Firstly, contacting is realized through three functional benefits of social media: exposing, notifying and reaching. To notify consumers about their music, the labels constantly disseminate information on the web. In the current digital media environment, information is not confined to a central community with a membership requirement but is open to anyone. Therefore, information that attracts consumers’ attention can be shared with many people through social networks. Due to this characteristic of social media, the record labels have the possibility to reach consumers in different countries. Secondly, bonding is used to develop relationships with consumers. Three approaches used to establish relationships are identified. These are active approaching, active reacting and participation encouraging. The record labels do not wait for their fans to contact them first; rather they actively post information and try to develop relationships with their customers. This involves activities such as searching for people who talk about them and communicating with them. By doing so, they can build social networks with their customers. This network building can go even further, so that the labels

290 develop relationships with other people in the music industry, not only record labels but also music college students and session musicians. The second approach is active reacting. Record labels using this approach can strengthen their relationships with consumers and encourage continuous participation from their customers. The third approach is participation encouragement. This is required to gather fans and stimulate interaction between them. Without fans’ participation, the messages that the record labels and musicians want to share will simply disappear. In the digital media space, lively interaction and communication between fans are much more important than the volume of information produced. Active communications between fans can provide evidence that there are people who care about a certain type of music. Therefore, it can offer moral support to musicians and record labels. Thirdly, spreadability was identified as one of the key features used to measure success in digital media. In the digital media space, information can be shared from person to person and from network to network. This allows people to reproduce content and share personal experiences with others. It is consumers who decide which products are valued. Therefore, a company cannot control the spread of information. However, the record labels do have some strategies that they use to maximize their chances of being valued by consumers. These are related to how and when they deliver messages. Lastly, the record labels gain two benefits from utilizing social media: the assessment of business performance and future business development. The record labels can get feedback from their customers and from other professionals in the music industry. In addition, they can obtain statistical data from social media. This feedback and data can be critical sources of business performance assessment. The information can play a critical role in planning future business strategy, as the digital media offers record labels both qualitative and quantitative sources of information. Moreover, interaction with fans and the use of data can contribute to the development of further products inspired by consumers’ demand and imagination.

The third section discussed the difficulties the record labels face when utilizing the social media. Four issues were identified: adaptability, uncontrollability, representability and applicability. Firstly, as many different types of social media have emerged, the record labels have been required to do more and more work to

291 promote their music. However, their financial limitations make it impossible to hire extra staff or experts to do this work. Secondly, the digital space is uncontrollable. Therefore, marketing success depends on the consumers’ choices. However, a bigger issue is that the record labels are vulnerable to negative and false opinions being shared on the digital space. This raises an issue of risk control in terms of managing companies’ and musicians’ reputations. Thirdly, the record labels share a limitation that the digital media is a biased place. This means that, although the digital media offers them an easier way to connect with their core fans, accessing the traditional media is still necessary if they are to connect with the broader public. Lastly, the record labels suffer from a lack of competence and capabilities. Due to their difficulties in employing experts in digital marketing, the record labels have been focusing on disseminating information rather than using the media analytically. In addition, they also mention that it is difficult to balance between commercial and informal uses of social media.

This chapter has discussed small South Korean record labels’ motivations for utilizing digital media, how they use it, and their difficulties in doing so. On the negative side, the record labels cannot fully benefit from the effects of digital media. However, the findings show that it clearly offers them opportunities to interact and communicate with their customers, which contributes to value co-creation.

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Chapter 9. Discussion

9.1. Introduction

This research has investigated the value of music in the digital age, how that value is created and the implications of the rise of the digital age for music consumers and producers. To examine these issues, interviews have been conducted with consumers of independent music and independent record labels in South Korea. Analysing the interviews and the secondary data has shown how consumers consume and experience music and how they engage with digital communications media to express and share their music consumption. In addition, this research has explored how independent record labels in South Korea use digital communications media to their advantage and the difficulties they face in using the technology. The approach taken to this research consisted of, firstly, reviewing literature on value co-creation and consumer research in marketing, secondly, reviewing digital media studies suggesting the convergence of the production and consumption of media content and, thirdly, analysing the production and consumption of popular music.

The research findings were presented in Chapters 7 and 8. Findings regarding the consumers of independent music in South Korea were presented in Chapter 7 and those concerning independent record labels in the country in Chapter 8. The research findings show that the consumers are involved in not only information processing but also experiential consumption. This suggests that post-purchase consumption activities are important and the value of music is created through the consumers’ experiences with it and emotional reactions to it. These consumers who are symbolically and emotionally tied to independent music contribute to its continuity and development. This occurs through their desire to minimize the inappropriateness and maximize the appropriateness of independent music and its culture. The music consumers’ online behaviours – grouped by theme into acquisition, relationship and engagement – suggest that they are value co-creators. This value co-creation happens as a result of both individual and collective value-creating activities. Another aspect that encourages value co-creation is the organization of independent music communities that combine the resources of the participants. The new media is a technology in which both consumers and producers are involved. Therefore, looking

293 at how independent record labels use the media is also important. This research has proposed that the value (co)creation strategies they use are contacting, bonding, spreading and managing. They use these strategies are to interact with consumers and co-create value with them.

Before discussing the findings of this research, this chapter will present a summary of the literature review. After that, the research findings will be discussed, along three themes: symbolic consumption of music, co-creative consumer community and co-creative strategies. Firstly, the symbolic nature of music consumption suggests detailed relationships between consumers and their music consumption. Secondly, the devotion and commitment of independent music consumers suggests that the value of independent music is co-created. The independent music consumption community combines the characteristics of subculture, brands and tribes. Thirdly, consumers’ use of new media and producers’ value (co)creation strategies are discussed.

9.2. Summary of Literature Review

The literature review chapters suggested that value co-creation between producers and consumers occurs in various industries including media, cultural, and health-care. Though it is possible to apply the concept of value co-creation between producers and consumers to other industries, this research is limited to studying the music industry—namely, a case study of the independent music industry in South Korea. Chapter 2 argued that the creation of value is no longer an activity controlled within the firm and that value is no longer embedded in goods. Instead, value is co-created by producers and consumers (Vargo and Lusch, 2004a). Based on this perspective, the review showed that firms are required to interact and communicate with their consumers in order to co-create value. This requirement has been intensified by the rise of digital technologies that enable consumers to interact and communicate with firms and other people, and express their own opinions and talk about their daily lives.

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This transition means that value is no longer only an economic concept, but can also be symbolic, emotional and experiential, and something that consumers create while participating in digital media (Edvardsson et al., 2011; Helkkula et al., 2012; Vargo and Lusch, 2004a). The symbolic, experiential and emotional nature of value and value creation are thus important features in any attempt to understand the value of a good or service and its value creation. In addition, in this environment, value is not only created through direct interaction with a firm or direct participation in its value creation spaces. Rather, value can be created indirectly in the open digital media space, individually or collectively. This requires firms to interact and learn from the consumers’ value creation (Blazevic and Lievens, 2008; Payne et al., 2008).

The review of consumer research suggested that consumers are involved in nonutilitarian consumption experiences, such as symbolic, experiential, cultural, and ideological activities. By doing so, they construct meanings, individually or collectively, from their consumption experiences and create value from them (Arnould and Thompson, 2005). In this research stream, consumers are depicted as cultural producers, value creators and creative consumers (Arnould and Thompson, 2005). Research on consumption communities suggests that consumers engage in collective consumption activities, using market offerings to express their consumption experiences, share them with others and create value from them (Canniford, 2011; Goulding et al., 2013). Three types of consumption communities, subcultural consumption, brand communities and consumer tribes, are widely discussed. Each type has its own distinctive culture and characteristics but distinguishing between the types is not clear-cut as communities can have a mixture of different aspects of the three (Canniford, 2011).

Chapter 3 showed that the forms of influential media of each era have shaped discourse networks that have, in turn, influenced society and culture. The new media form has constructed the discourse network of this age, which has changed society, people’s lives and the ways they engage with culture. Consumers in the networked society are involved in value-creating activities, whether active forms such as creating their own content or passive forms such as sharing (Deuze, 2012; Jenkins, 2006; Jenkins et al., 2013). The literature review suggested that the convergence

295 view of value creation, which suggests that the value of content in the networked society is co-created by media producers and consumers, is relevant to this research. However, such value co-creation does not only occur through direct interactions. Consumers can create their own value-creating spheres, as we see from the various uses of social media. Users’ various activities, such as streaming videos and mentioning their favourite brands on Twitter, influence other consumers and producers. These activities do not necessarily involve direct interactions between consumers and producers.

The literature review also suggested that this transition is also happening in the music industry. Since the rise of the Internet, the music industry has been transformed in terms of both production and consumption. The production, distribution and marketing of music have all been significantly influenced by the new media and the various ways consumers use it. It is no longer relevant to think of music as being produced by record labels alone. Rather, it is produced by diverse actors, including consumers and other industries such as digital music services. Music audiences can now interact with their favourite musicians and share their consumption experiences with others. They can experience music from various sources, including traditional physical formats and emerging new media technologies such as social media and digital music services. In addition, the integration of social media such as Facebook and digital music services such as Spotify is now a very a common feature. These media forms are now value creators. Therefore, rather than seeing music consumers in the digital age as thieves, the literature review suggested that they should be considered value (co)creators.

The review is important since marketing literature indicates the sort of values that consumers create in the digital age and how they are created. In this sense, the media literature of Chapter 3 explores how the discussion of values and value creation in Chapter 2 occurs in the case of media content, as well as in everyday life contexts with the Internet and social media. Although the review of Chapter 4 offers a fundamental understanding in terms of the popular music industry in the digital age, the existing literature cannot fully explains the daily involvements of consumers using the Internet and social media, and their value creation and sharing processes

296 whilst doing that. There is little research and understanding in terms of the production and consumption of popular music in the digital age, based on the perspective of value co-creation.

Research in user-led innovation (Lakhani and von Hippel, 2003; Lüthje et al., 2005) and virtual customer environments (VCEs) (Nambisan, 2002; Nambisan and Baron, 2009) suggest collaboration between companies and their consumers. However, those studies focus on the benefits that companies gain while collaborating with their consumers that require consumer commitment and participation (Moeller et al., 2013). By contrast, the literature review suggests that, in the digital age, value becomes multidimensional and includes not only economic terms but also non- economic aspects, as well as that value creation is co-created in a process shared by producers and consumers and in a process among consumers. Nevertheless, very little is known about how consumers connected to the Internet and social media without temporal and spatial limitations are engaged in the consumption of content, such as music and music videos, and what values they create and share in the process. Furthermore, we know little about how record labels utilise social media and the values that their consumers create and share to co-create value.

9.3. Discussion of Research Findings

The first contribution of this research is that it extends our understanding of the symbolic consumption of music (see section 9.3.1 for more details). This is because the marketing research regarding music has focused on music’s role as a marketing tool (Larsen et al., 2009, 2010). Therefore, music consumption itself has not been of great concern in marketing literature. The section (see section 7.2) outlines how the independent music consumers in South Korea are engaged with music and how they experience music. The findings about the consumers of independent music in South Korea (see section, 7.2 and 7.3) explain that music consumption is not only related to music consumers’ emotions and their aesthetic judgements but is also connected with different features such as social, political and cultural concerns. This research shows that consumption experiences are constructed by past, present and future consumption and are socially constructed (Edvardsson et al., 2011; Helkkula et al.,

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2012). This confirms the nature of value as intra- and inter-subjective, and lived and imaginary (Helkkula et al., 2012) and extends consumer culture theory examining symbolic and experiential consumption (Arnould and Thompson, 2005).

The second contribution of this research is that it demonstrates the phenomenon of a co-creative consumer community (see section 9.3.2 for more details). Unlike previous consumer research that depicts consumers as devaluing or abandoning consumer trends or communities (Arsel and Thompson, 2011; Thomas et al., 2013), the consumers of independent music in South Korea are shown in this research to be trying their best to present positive images of the music culture to the public. To do so, they are involved in activities aimed at minimizing the inappropriateness and maximizing the appropriateness of independent music and its culture (see section 7.3). Moreover, the interviews with the music community participants showed that their devotion to independent music and their pooling of resources contribute not only to the music communities in which they participate, but to independent music and culture in general (see section 7.5). Therefore, this research contribution extends our understanding of consumer culture theory that investigates “how consumers actively rework and transform symbolic meanings encoded in advertisements, brands, retail settings, or material goods to manifest their particular personal and social circumstances and further their identity and lifestyle goods” (Arnould and Thompson, 2005, p. 871).

The third contribution of this research is to suggest co-creative strategies for use in the networked digital environment (see section 9.3.3 for more details). Unlike previous research into consumer communities, which are centred on offline activities (Thomas et al., 2013), or consumers of brands gathered in central online communities (Muniz and O’Guinn, 2001), this research highlights dispersed consumers’ activities in the networked digital space (see section 7.4). Popular music studies in the Internet era argue that music consumers act as investors, promoters, and creative partners. They offer financial, marketing, and emotional support for musicians and labels (Baym, 2011; Baym and Burnett, 2009; Wikstrom, 2009). In addition, this research also offers an understanding of value-creating activities carried out by consumers within their own spheres, whereas previous co-creation

298 research has focused on the collaboration between consumers and a firm (Blazevic and Lievens, 2008; Michel et al., 2008; Payne et al., 2008). Therefore, previous research on co-creation has focused on producer-centric products and service innovation (Greer and Lei, 2012), while this research suggests the individual and collective co-creation of music value by independent music consumers.

In addition, this research presents the strategies that independent record labels in South Korea conduct to utilize social media (see section 8.3). These strategies are understood to be efforts by the firms to participate in the consumers’ value creation sphere (Grönroos and Voima, 2013). Some of the research findings parallel the theoretical model of managing co-creation, by Payne et al. (2008), and the research findings of Blazevic and Lievens (2008). Therefore, the findings of this research offer further understanding of the value creation practices of consumers, and value co-creation by producers and consumers, and shed light on how firms can interact with the value creation of consumers.

9.3.1. Symbolic Consumption of Music

Apart from research regarding music as a marketing tool, Larsen et al. (2010) point out that other studies have investigated topics such as individuals’ music purchasing decisions and the development of music preferences linked to age. Although those studies explain music consumers’ intentions and characteristics, unlike the research treating music as a component of marketing, they still fail to fully explain how consumers experience music. Larsen et al. indicate that “the actual purchase of music is only a small part of the consumption experience … the post-purchase consumption of music is an area that has largely been ignored by consumer researchers” (2010, p. 197). In addition, previous research suggests that, in theory, value has inter- and intra-subjective aspects, can be both lived and imaginary and is socially constructed (Edvardsson et al., 2011; Helkkula et al., 2012). The present research supports these aspects, empirically. This study of music consumers also proves that consumer experiences are interactively constructed by past, current and future consumption, as Helkkula et al. (2012) suggest. Therefore, the findings of this research, on the consumption of independent music, extend consumer research investigating

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“contextual, symbolic, and experiential aspects of consumption” (Arnould and Thompson, 2005).

This research highlights the symbolic consumption of independent music, which is constructed from various influences, including social, media, industrial and aesthetic features. Cultural consumption is negotiated and articulated, as in Kozinets’s depiction of Star Trek fandom. Kozinets (2001) notes how the culture of consumption is related to the identification of fandom through commercially produced images from the mass media. The meaning in cultural consumption is co- created by various actors in the music industry. The meaning is not rigid; rather, it is open to change from the influences of commercial producers and consumers.

However, there are negative views of this consumption. According to Arsel and Thompson (2011), linkages between a field of culture and commercial consumer culture create marketplace myths. In their study of the marketplace myth of independent music in America, labelled the hipster culture, Arsel and Thompson point out that “once a countercultural field of consumption proves to have identity value for a broad swath of consumers, its mythic representations also tend to proliferate across the consumer culture spectrum” (2011, p. 794).

In addition, Hesmondhalgh points out that the consumption of music has been depicted as “a positive resource for active self-making” (2008, p. 330). Therefore, the conception of music is too optimistic and ignores the ways music is associated with negative social conditions and historical processes. Hesmondhalgh (2008) argues that the modern society, which requires individuals to take responsibility for themselves, has seen a rise in the number of depressed people and in social anomie. In this society, individuals feel under pressure to achieve self-realization and one way to achieve this is through cultural consumption (Hesmondhalgh, 2008; Honneth, 2004). According to Hesmondhalgh, “music… may well become bound up with the incorporation of emotional self-realisation, authenticity and creativity into capitalism, and with intensified consumption habits … such emotional self-realisation is linked to status competition, in particular over the degree to which individuals are

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“emotionally sensitive” and over involvement in hedonistic collective activity” (2008, p. 330).

This is also the case for the consumers of independent music in South Korea. For some consumers, listening to independent music is a way to show their superiority in terms of cultural tastes, and to differentiate themselves from others. It is a way for them to present their desired selves. In this way, the cultural form is regarded as a sort of luxury commodity. The independent music culture itself gains status as an authentic and creative cultural form in the capitalist market. The authentic and autonomous creations of musicians are well matched with the pursuit of self- realization by individuals who feel powerless and helpless in a society with social issues such as economic depression and the rise of youth unemployment.

For the consumers in this research, their attitudes and consumption of independent music are not only influenced by personal interests and social concerns (Larsen et al., 2010) but also cultural judgements and the political circumstances of the media and music industries. Larsen et al. (2010) show the symbolic consumption of music to be socially situated and constructed. According to the research (Larsen et al., 2010), consumers are concerned about the congruence between them and the music they consume. They think of the music they consume as being a way of presenting themselves. In addition, the consumption of music is situational in terms of the people they interact with. Their choice of music can be influenced by other people, especially if they are not close. The selection of music can be based on relationships between the person who chooses music and others. Thus, people use music to build relationships and introduce new music to close peers.

The consumers in this research also expressed concerns about the negative ways they are represented to other people and in society. In addition, they talked of a fear that their cultural interests might lead to being rejected by other people, eventually isolating them physically or psychologically from others. However, their consumption of independent music is often based on cultural aesthetics, such as diversity or autonomy, which these consumers tend to regard highly. This leads to pride in their consumption of culture, and encourages them to contribute to the

301 development of this cultural form, in an environment where the fans feel that independent music is disregarded.

Independent music fans are shown to connect with the culture of music in different ways. Six types of consumer consciousness contributing to the creation of value in music have been identified: self, aesthetic, political, social, commercial, and cultural. Self-consciousness refers to music audiences engaging with music in order to fulfil their desires, which can be psychological, intellectual, or cultural. Some interviewees (see p. 211) mention different intellectual perspectives they have and psychological comforts they experience during the consumption of indie music. Aesthetic consciousness refers to their judgements about music. These can be based on musical standards or personal interests, or focused on a comparison with mainstream music. For instance, interviewees (see pp. 207 and 208) express their evaluations of indie music over mainstream music and their constant engagement with music to distinguish their musical tastes. Political consciousness refers to their concerns about the sustainability of the music culture. This arises from their evaluations of the media environment in South Korea, concerns about commercialization, and their passion for the culture of the music. Most of the interviewees demonstrate concern about this issue. Social consciousness is related to the ways in which they communicate with other people and society through music. The interviewees (see pp. 212–214) show that they build inter- and intra-subjective emotions and enjoyment by consuming music. This relates to the consciousness of the congruence between them and the music they listen to, as well as to concerns about rejection, ignorance, and showing off. In addition, it concerns how the music culture is understood in society. Commercial consciousness refers to their awareness or desire to keep up with cultural or commercial trends. The findings on pages 215 and 216 discuss how indie music in South Korea has been conceptualised as modern culture and creative music forms. Consuming indie music is perceived as an expression of cultural understanding. Cultural consciousness refers to their desire to expand their cultural consumption of music, for example, by exploring different genres and musicians, and building collections of artefacts such as records or intellectual resources such as music history. For example, interviewees (see pp. 209 and 210) actively search for music they love and express pleasure in buying and collecting music.

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9.3.2. Co-creative Consumption Community

While the consumers of independent music in South Korea are involved in symbolic consumption of music, they are also concerned with raising awareness of the indie music culture within society and introducing it to other music consumers. The fans of independent music accept that some level of mainstreaming is necessary as long as it does not harm the culture. These music consumers can be identified as co-creative consumer activists. They need to be seen as value co-creators and it must be recognized that the subcultural brand value is co-created by producers and consumers (Merz et al., 2009; Vargo and Lusch, 2004). Unlike previous research (Blazevic and Lievens, 2008; Michel et al., 2008; Payne et al., 2008), which has focused on the co- creation of value through direct interactions between firms and their consumers, this research shows a more open and indirect type of co-creation between consumers and producers.

The section on consumer attitudes showed how the way in which a cultural good is conceptualized in a market affects how audiences communicate with the cultural form, and how this evokes competing emotions and inner conflicts among music fans. These consumers share some similarities with the vested consumers of indie music in a study by Arsel and Thompson (2011), who try to keep their distance from the marketplace myth of indie music described as a hipster culture. Arsel and Thompson (2011) conceptualize the activities carried out by vested music audiences in order to distinguish themselves from hipsters as ‘demythologization’. Some level of demythologization was seen among the interviewees in this study too, reflecting the idea that “indie consumers view this marketplace myth as a caricature of their aesthetic tastes, which threatens the value of their field-dependent capital” (Arsel and Thompson, 2011, p. 803). One interviewee in the present research described indie music fans categorized as hipsters as “someone who reads a book and plugs earphones in their ears while sitting at the bar table of Starbucks”. The interviewees in this research were also concerned about “cultural devaluation” (Arsel and Thompson, 2011, p. 803) occurring as a result of the commercialization of the culture and the area in which the indie music scene is situated in South Korea.

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According to Arnould and Thompson (2005) and Holt (2002), consumer sovereignty is achieved when consumers express volition or autonomy over market influences such as marketing strategies. Meanwhile, the abovementioned study by Arsel and Thompson (2011) suggests that consumers proclaim that indie is just one dimension of their consumption, by degrading the importance of indie culture or claiming to have multidimensional cultural consumption in their lives. Therefore, the research of Arsel and Thompson shows resistance to the transformation of a subcultural community into a mass-market trend. Thomas et al. (2013) also suggest an antagonistic reaction of this sort to ‘mainstreaming’, due to a loss of exclusivity for members. Members’ reactions can be diverse, including abandoning the old community, forming a new one or reclaiming the old one. Although both express consumer volition, demythologization and resistance show different forms of consumer sovereignty. What they share, however, is an image of consumers trying to ignore or abandon what is going on around them, and old markets, in order to construct their own imagined places so as to express their self-identities.

In the case of the independent music consumers in South Korea, their sovereignty comes from the desire to create and share the value of the music culture with others, rather than ignoring or abandoning what is going on in the market. This sharing of mutual value is similar to ethical consumer activism such as green consumption or the Occupy Wall Street movement. The music consumers show a genuine love for the music culture and the will to spread it. However, they also remarked on the antagonistic aspects of social perceptions of the culture and of themselves, and the adverse effects of the expansion of the culture and the area around Hong-Dae. These findings extend the consumer research field that has identified how consumers make meanings and values from their consumption practices in a market in which different sets of cultural, commercial, social and historical narratives are interwoven.

Two contrasting images of independent music are competing here: cultural good and commercial commodity. Music consumers hover between self-realization and helplessness, a cultural hipness and a cultural consciousness, and a commercial trend and psychological consolation. This gap also appears in the independent music sector

304 itself, as some record labels such as Happy Robot and Pastel Music pursue the business ideals of big corporations, while coalitions such as the Independent Music Production Cooperative of musicians and consumers pursue cultural amateurism, do- it-yourself ethics and political resistance to mainstream culture and commercialization. The priorities of the consumers of independent music in South Korea might be a result of commercialization and iconization in the market, although they regard their cultural form as an independent and autonomous creation.

Some music fans see commercialization and stereotypes of indie music and its fans as a threat. This is a similar reaction to that of the indie consumers in Arsel and Thompson’s (2011) research. However, they take part in the independent music culture in different ways, which express their desires and reflect their current situation. Both the contrasting images of independent music can be understood as music consumption through the act of communicating through music. The interviewees in the present study, who can be considered relatively devoted music fans, generally talked of their music consumption not being limited to independent music but also including mainstream music. They were also reluctant to use the term, indie or independent to define their music culture, finding it too broad and vague, and express metaphorically the idea that independent musicians do not want any commercial success. This indicates the rejection of a mystical or iconic image of independent music labels and musicians as those who pursue purely cultural and musical achievements. This is due to the distinctive music market in South Korea, where teen pop and dance music dominate the music charts and media. In this environment, the music of singer-songwriters and soft-rock and pop bands is highly regarded, whether it is produced by independent or big record labels. This genre, whether mainstream or independent, is expanding in South Korea. It demonstrates the heterogeneity of the independent music consumption community in South Korea, rather than its exclusivity or homogeneity as Thomas et al. (2013) suggest.

Aspects of the music consumers’ attitudes contribute to the continuity of the music culture. They fear the rejection, distortion and commercialization of the culture they are passionate about and they feel responsible for it, based on their aesthetic judgement and strong attachment. Their sense of responsibility also comes from their

305 frustration over the subordination of independent music. The independent music consumers also share anxieties, based on real-life experiences, that their cultural consumption may isolate them from their existing social capital and give other people the impression that they are bragging.

Being aware of these aspects, they tend to develop new social networks with people who share similar passion rather than forcing their cultural tastes on others. This tendency is the basis for collective activities by independent music fans, both online and offline. They are also concerned about the commercial expansion of the music culture and the area of Hong-dae. Their concern is not solely about a loss of status as obscure subcultural consumers and devaluation as a result of commercialization; rather, they demonstrate apprehension. Judging by their competing emotions, it seems that what they want is the spread of the culture in the market as a cultural form rather than as thoughtless expansion which might eventually harm the culture. They also recognize that support from market institutions such as the media is essential for this. Therefore, the reactions of the music fans are based on interactions with external and internal forces, and the competition between those forces. This shows that music is a symbolic good that is socially constructed and that the value of music is not fixed (Larsen et al., 2009). These are the features of independent music consumers in South Korea that give them consumer sovereignty. They build self-identities by constructing a cultural brand in the marketplace rather than by devaluing market trends in the marketplace as was identified in studies by Arsel and Thompson (2011) and Holt (2002).

These attitudes are aimed at minimizing inappropriateness and maximizing the appropriateness of the music and culture. There is a similarity in this respect with research into Apple Newton consumers by Muniz and Schau (2005). Due to persecution of and stigmatizing of these consumers, Muniz and Schau (p. 739) describe how “first, members are cautious when describing their devotion to outsiders. Second, members work to clear up what they see as misconceptions surrounding the Newton”.

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Other research suggests different types of collective activities. For instance, a study by Schau et al. (2009) describes the collaborative practices of consumers in digital communities. Another piece of research by Diamond et al. (2009) looks at collaboration between consumers and a single brand. Lastly, Thomas et al. (2013) describe the collaboration of multiple actors, including consumers, producers and resources. These previous studies are based on particular central settings, whether online communities or offline stores.

However, the present research suggests that collectivism is based on shared attitudes. These attitudes are not just shared notions based on direct interactions with other actors or products in focal communities or stores. They are shared mind-sets among the members of the community, although the members may be scattered and, in some cases, have had no direct interaction. These shared emotional attitudes guide their behaviours and mentality, and motivate them to strive for the sustainability of the music culture and scene. There are similarities here with the concept of the alter- brand community (Cova and White, 2010). Cova and White (2010) argue that alter- brand communities show utopian and altruistic characteristics and that value is created and appropriated by the communities and not by brands or products.

The consumption community for independent music has a mixture of characteristics, combining subcultural, brand and tribe communities. South Korea’s independent music consumption community can be seen as subcultural because it is cohesive and includes committed participants (Canniford, 2011). However, the current expansion and mainstreaming of independent music cannot be fully explained by the subcultural community concept.

It also shows signs of the brand community. Previous studies of brand communities, groups of people who share a devotion to particular brands, show that the participants are eager to share their consumption experience and feel a moral responsibility to sustain and expand the communities in which they participate (Canniford, 2011; McAlexander et al., 2002; Muniz and O’Guinn, 2001; Schau et al., 2009). However, the previous studies show that participants in brand communities normally gather in

307 central, virtual places, which is not the case for the independent music consumers studied in this research.

Thirdly, South Korea’s indie music scene shows characteristics of consumer tribes. The consumers of independent music share desired lifestyles that can be characterized as modern, comfortable and an escape from their busy daily lives. In addition, they are interested in building relationships with people and playing with market offerings such as videos or photos to express their own creativity (Canniford, 2011; Cova et al., 2007; Goulding et al., 2013). However, the participants in consumer tribes do not typically show any moral responsibility or religious zeal for the brands they love (Goulding et al., 2013).

This clearly demonstrates that the independent music consumption community cannot be defined simply as a consumer tribe. Thus, the community of independent music consumers can be seen as a mixture of consumption communities, for which the term ‘co-creative consumption community’ seems appropriate. It is an assemblage of networks of invisibly and visibly tied consumers whose boundary is not fixed. Its participants are cohesive and highly regard linking value. Such networks are formed through shared lifestyles or interests such as culture or social issues. Market offerings can be means of play for the members. They are committed fans and share a sense of moral responsibility to sustain and expand the culture or brand they love.

The findings based on the interviews of participants in music communities and projects offer further understanding in terms of the view that consumers are resource integrators (Arnould et al., 2006; Baron and Harris, 2008; Vargo and Lusch, 2004). Here, the findings are categorized according to Arnould et al. (2006), while the study of Baron and Harris (2008) offers empirical evidence to support the validity of the categorization. However, further studies are required as Arnould et al. point out that “we know relatively little about the interaction among various types of consumer operant resources. Furthermore, we do not know much about how consumers selectively manage expenditures of various types of operant resources. In other words, in what contexts do consumers expend

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relatively greater operant resources and on what do they expend them?” (2006, p. 98).

Although the study of Baron and Harris offers valuable evidence, their research relies on a single case study. The present research offers further support for Arnould et al.’s (2006) categorization. In addition, this research suggests that the sub-categories can vary and are interrelated rather than mutually exclusive. For instance, a sense of achievement can evoke emotional responses such as a feeling of fun and joy. In addition, reciprocal relationships with producers can help people to achieve personal projects that may help them in their pursuit of a career in music or other cultural industries.

The findings of this research, therefore, extend the empirical understanding as very little research has been produced on this subject to date. In addition, Baron and Harris (2008) call for research into the impact of the Internet on consumer resource integration. The communities and projects investigated in this research rely heavily on digital technologies to communicate, and to manage and maintain their communities. For them, digital technology is not something to explore in order to gain benefits, as in the case of consumer campaigners (Baron and Harris, 2008). Rather, it is embedded in their daily lives. Therefore, these participants are able to offer an understanding of the issue raised by Baron and Harris (2008). The findings also show the influence and involvement of Internet technologies in the organization of these communities and projects.

9.3.3. Consumer Sharing System and Co-creative Strategy of the Independent Music Sector in the Digital Age

Although Berger and Heath (2007) argue that consumers diverge from others in their symbolic consumption of items such as music or hairstyles in order to express their own identities, this study suggests that music consumers converge with others in order to share their cultural tastes and pool resources. This convergence has been accelerated by digital technologies, which support the co-creative community.

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Previous consumer research (Kozinets, 2001; McAlexander et al., 2002; Muniz and O’Guinn, 2001; Muniz and Schau, 2005; Schau et al., 2009; Schouten and McAlexander, 1995; Thomas et al., 2013) has suggested different practices that members of communities use in order to contribute to and create value for the communities in which they participate. In particular, a study by Muniz and O’Guinn (2001) suggests that a sense of belonging, rituals and traditions, and moral responsibility are all key factors that contribute to brand communities. In addition, an article by Schau et al. (2009), based on empirical research and a review of previous related studies, identifies twelve practices used by members of communities in order to create value. These practices are grouped under four themes: social networking, community engagement, impression management and brand use. Social networking practices are used to create, enhance and sustain relationships between members. Impression management refers to practices used to create favourable impressions of brands outside the community. Community engagement practices are activities used to motivate members’ participation. Finally, brand use practices refer to improved or creative uses of brand products.

Some similar practices were identified in this research (see the section on findings in Section 7.4). Three broad practices composed of different objectives were identified: acquiring information (Section 7.4.2), building relationships (Section 7.4.3) and engaging with cultural consumption (Section 7.4.4). This implies that the consumers on the virtual space are involved in not only individual but also collective consumption practices involving the capturing, sharing and creating of emotional, symbolic and experiential value. These practices are used to construct individual cultural consumption experiences, develop relationships so as to construct a collective consumption experience, and share a devoted culture with others. They are not separate practices but inter-connected, influencing one another or occurring simultaneously.

As depicted in section 7.4, music fans acquire music-related consumption activities such as photos of concerts, writings, and tracks, and build relationships with people who share similar tastes in music or musicians and engage in activities to collect, reproduce, and evangelise their passionate consumption of music. Before the rise of

310 the Internet, the consumption of popular music was centred on offline activities such as going to concerts and participating in fan clubs. With the rise of the Internet, music consumers can participate in online activities, such as forming and sharing their opinions, and participating in online music communities. Some of the activities these consumers carry out are extensions of offline activities, and some are new. It would be interesting to examine their activities on the Internet based on different elements, such as music, gigs, concerts, fan clubs, and writing. However, the aim of this research is to investigate how consumers of independent music in South Korea use social media and the Internet to consume music, rather than focusing on the various elements of music consumption. Therefore, their activities using digital content on the Internet in regard to independent music are a critical concern. In addition, nowadays it is very difficult to divide online and offline activities because these are interconnected. For instance, an activity like leaving comments on a social media site while walking on the street is difficult to categorise as an online or offline action. In addition, attending concerts can be associated with online activities, as many audience members use their smartphones to upload photos, tweet emotional reactions or responses, or record in real time. Therefore, there are only vague distinctions between online and offline activities.

Schau et al. argue, “we assert that an emergent sense of membership and identity arises from the trajectory, or the development of practices that foster the exchange of collectively defined and valorized resources” (2009, p. 35). This is because previous research by Muniz and O’Guinn (2001) and Schau et al. (2009) investigates online communities such as Saab, Mini Cooper, Lomo and Apple, whose members are mostly owners of the products who gather to discuss various technical issues involved in using the products.

However, this research shows that the practices applied by the music fans are not only community-driven or clearly aimed at helping other community members. Some of their practices are, instead, individual goal-driven practices aimed at satisfying their needs and objectives. This is because they are not only participants in particular communities but also users of personal social media in general. They share their individual activities with other people knowingly or unknowingly. Therefore,

311 the shared resources are collectively defined based on each individual’s experience, judgement or evaluation of them. This sheds light on the value creation practices that go on in the daily lives of ordinary people who use digital technologies every day. In this sense, it is not particularly useful to separate these activities into those aimed at satisfying individual needs and those aimed at pursuing community goals, because one goal-driven activity can contribute to the development of the culture as a whole. Therefore, individual goal-driven practices are associated with the development of the community.

For these people, sharing “creates solidarity and bonding” (Belk, 2010, p. 717). This does not need to be a form of reciprocity as is prevalent in commodity exchange or gift giving (Belk, 2010; Giesler, 2006). In addition, there is no distinction between giver and receiver. In the digital space, everyone is both a giver and a receiver, although they do not necessary feel that they are giving or receiving anything. According to Belk, unlike a gift exchange that involves two parties, a giver and a receiver, or a commodity exchange between a seller and a buyer, “there are no separate terms to distinguish the parties in sharing. This mutuality of possession is an important characteristic of sharing” (2010, p. 720). Giesler (2006) suggests that the nature of Napster can be seen as a consumer gift system. The consumers in this research and their practices can be thought of as forming a consumer sharing system. These individuals in the social media space clearly contribute to value creation in the music community by engaging in these practices.

The consumers’ activities in the digital space confirm the suggestions by Edvardsson et al. (2011) and Helkkula et al. (2012) that value can take contextual and experiential forms, and is individually and socially constructed by consumers. The findings could provide valuable information for independent record labels as Payne et al. argue that, “from the supplier’s perspective, creating value for the customer begins with an understanding of the customer’s value-creating processes” (2008, p. 88). This means that the independent record labels need to understand the nature of their consumers’ activities in the digital space using music related information and digital content. Similarly, Grönroos and Voima suggest that “what is required to enable firms to get access to the customers’ sphere and strategies for doing so are

312 important research areas” (2013, p. 147). The empirical findings regarding the independent record labels’ use of value (co)creation strategies in order to interact with their consumers and learn from them are valuable as they fill the research gap suggested by Grönroos and Voima (2013). In addition, the collective value (co)creation practices and strategies used by consumers and producers suggest that value (co)creation cannot be restricted to an interaction between a single consumer and a firm, which has been the focus of previous research (Helkkula et al., 2012).

Payne et al. (2008) suggest a model for managing the co-creation between a firm and its consumers. Although their model is based on direct interactions, as mentioned before, their model parallels the findings in this research. Their conceptual model consists of customers’ value-creating processes, encounter processes and the supplier’s value-creating processes. The customers’ value-creating processes are related to the relationship experience and customer learning. Relationship experiences are categorized as cognition, emotion and behaviour. They are based on research by Holbrook and Hirschman (1982) that suggests the hedonic nature of consumption. Cognition refers to “memory and related phenomena” in the information-processing approach and aspects that are “more subconscious and private in nature” in the experiential approach. Emotion refers to affects, attitudes and preferences. Behaviour is derived from experiences and brand uses by consumers rather than focusing on purchase decisions (Holbrook and Hirschman, 1982; Payne et al., 2008). Customer learning is occurred through relationship experiences (Payne et al., 2008). Therefore, a firm’s role is to encourage “dialogue with customers in support of their experiences and learning processes” (Payne et al., 2008, p. 88). The customers’ learning processes are involved with remembering, internalizing and propositioning (Payne et al., 2008).

The present findings regarding the consumers of independent music in South Korea strongly correlate with the ideas of Payne et al. (2008). Aspects of the relationship experience are well depicted in the behaviours and attitudes of this study’s consumers. Therefore, this research empirically confirms that model and extends our understanding of consumers’ value-creating processes. In addition, this research offers further explanations of value (co)creation by music consumers in the digital

313 space. It describes not only the individual but also the collective nature of value and value creation, unlike the study of Payne et al. (2008) that focuses on the individual level of value creation.

The supplier’s value-creating processes are arranged according to opportunities to co-create value, such as the development of technologies that enable the supplier to connect with consumers, outside-in planning, implementation and appropriate metrics for evaluating relationships with consumers. They also involve organizational learning, which offers an understanding and knowledge of the consumers. The findings based on the independent record labels in South Korea show similarities with the model of Payne et al. (2008), although the research findings are organized differently. However, what the model of Payne et al. (2008) and the findings of this research have in common is that the value creation processes of a firm should be based on interaction and communication with consumers, and an understanding of the consumer’s experience. This is important as it can help firms to detect, develop and deploy new products or services (Blazevic and Lievens, 2008).

The research findings offer strategies that record labels can utilize in order to benefit from the new media. Marketers in general can also benefit from building relationships and co-creating value with consumers. The most important implication of contacting is that it can offer sources (e.g. information and videos) for consumers to play with. The resources consumers can access are a key attribute that supports their value creation (Payne et al., 2008). Bonding, that is establishing relationships with consumers, is one way for a firm to access its consumers’ value creation sphere (Grönroos and Voima, 2013). S-D logic also claims that marketing should be about co-creating relational experiences (Payne et al., 2008). Relationships in the digital media are not limited to personal social networks but also include the relationships of others. This allows content to spread. Therefore, one person’s consumption experience can be shared with other people and may influence their consumption experience. This suggests that value is co-creative. Engaging with social media offers the record labels two benefits: assessing their business performance and future business planning. Therefore, there are parallels between the findings of this research and a study by Blazevic and Lievens (2009), which states that knowledge co-

314 produced with customers can help companies to detect problems and the needs of their consumers, develop new products and services, and make improvements.

Along with the (co)creative value creation strategies, this research also demonstrates some critical issues that firms may experience when using digital media. Previous research on value co-creation has focused on the positive aspects of communication with consumers. However, this research suggests that there are negatives as well. These difficulties can be more critical for small firms that may be more vulnerable than big corporations.

For managers, these findings regarding the use of digital media by music consumers, (co)creative strategies and the difficulties of utilizing digital media could help them to engage with digital media. They need to realize that communicating with their consumers and interacting with their value creation can be more difficult on open digital communications media such as social media than it was previously. In addition, the findings should also warn managers that the benefits of social media are not automatic but require constant effort in order to interacting with consumers and understanding their behaviour. Finally, they should be aware that the thoughtless uses of social media may not show any return for their efforts and could even harm their brand reputation.

9.4. Conclusion

This chapter, firstly, gives a summary of the literature review. Chapter 2 gives an idea of the current understanding on value and value creation. Chapter 3 discusses the convergence of the creation of value in media content between producers and consumers. Chapter 4 examines networked value creation in the music industry and consumer participation in value-creating activities.

Secondly, this chapter discusses the three research contributions: the symbolic consumption of music, co-creative consumer community and co-creative strategies. The first, the symbolic consumption of music, demonstrates that music consumption is multi-dimensional. Independent music consumers in South Korea take different

315 factors into consideration when they experience music, including aesthetic judgements, emotions and cultural concerns. Secondly, this research suggests the independent music scene in South Korea has a mixture of characteristics of existing consumption community forms. The consumption community of independent music in South Korea is termed a co-creative consumer community. In the community, independent music consumers act as value co-creators, contributing to the continuity of the music scene and its culture. There is a shared mind-set among independent music consumers, which they express and share using digital media, and they participate in independent music communities or projects that require the integration and sharing of resources. The third contribution of this research is that it extends existing research about the value (co)creation strategies of consumers and producers. In addition, the findings suggest that consumers have their own value-creating and sharing spheres in the networked digital media. In these circumstances, firms are required to interact with consumers to co-create value. The record labels’ value (co)creation strategies identified here show how they interact and communicate with consumers, particularly with regard to their value-creating activities.

From a theoretical perspective, the research findings confirm and extend existing research in S-D logic that suggests a value co-creation perspective, and consumer culture theory that demonstrates consumption to be a combination of symbolic, experiential and emotional activities. From a practical perspective, this research suggests that managers need to understand that the value of goods or services cannot only be explained by traditional economic value but can also have symbolic, experiential and emotional forms. Thus, managers must realise that consumers can (co)create value and share it with other people. The value (co)creation activities of consumers identified here demonstrate how the consumers do this, while the value (co)creation strategies of the producers show how they interact with the consumers’ value creation sphere.

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Chapter 10. Conclusion

10.1. Revisiting the Research Aims

The aims of this research were threefold. The first was to investigate the value of music in the digital age. The findings confirm that the value of music cannot be explained in purely traditional economic terms such as selling physical formats. This research suggests that the value of music in the digital age can also take symbolic, emotional and experiential forms. In addition, the value of music is inter- and intra- subjective. It can be lived and imaginary. It can be structured by past, present and future consumption experiences (Edvardsson et al., 2011; Helkkula et al., 2012). Chapter 6 suggests that music consumption in South Korea has transformed from physical to digital formats. Music consumers in the digital age in South Korea experience music to express their identities and to socialize. Chapter 7 also shows that the music consumers in South Korea experience music using both information- processing and experiential approaches. Therefore, they are engaged with both cognitive and hedonistic consumption experiences (Payne et al., 2008; Hirschman and Holbrook, 1982; Holbrook and Hirschman, 1982). Using the information- processing approach (see section 7.2.1), music consumption is processed by consumers’ own evaluations, investigations and benefit-seeking behaviours. With these activities, music consumers can shape their own cultural tastes, cultivate cultural consumption and learn about different perspectives. In addition, consumers experience music in emotional and psychological ways (see section 7.2.2). In these manners, music consumers feel empathy, experience pleasurable emotions like joy and enjoyment and have fantasies. Through these experiences, consumers can build inter- and intra-subjective emotions, have inter- and intra-subjective enjoyment and imagine themselves through music.

The second aim of this research was to examine the value creation of music in the digital age. This research argues that the value of music is not produced by record labels alone, but co-created with consumers (Prahalad and Ramaswamy, 2000; Vargo and Lusch, 2004a). Consumers of independent music in South Korea show that they are involved in value co-creation by minimizing the inappropriateness and maximizing the appropriateness of South Korean independent music (see section

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7.3). Therefore, intrinsic motivations, such as responsibility, motivate them rather than financial benefits (Benkler, 2006, 2011; Gauntlett, 2011; Pink, 2010). With the rise of digital media, consumers can (co)create value individually and collectively; section 7.4 suggests that to (co)create value, consumers conduct three activities: acquisition, relationship-building and engagement. Through the activities, consumers acquire music-related information, develop relationships with others and engage in cultural consumption. In addition, independent music fans in South Korea participate in different independent music related communities or projects to co-create value of independent music. Such communities or projects are managed by integrating various resources of participants: physical, social and cultural. This categorization is adapted from Arnould et al. (2006). Therefore, the co-creation of value does not have to involve consumers participating in a company’s value-creating space. Instead, companies are required to find ways to communicate with consumers and to participate in consumers’ own value spheres in order to co-create value (Grönroos and Voima, 2013). The findings of Chapter 8 demonstrate this phenomenon well by suggesting four value (co)creation strategies companies employ: contacting, bonding, spreading and managing. More specifically, these involve contacting their consumers, building a bond with them, spreading their products and information and managing their businesses by assessing their current performance and strategy development. However, the chapter also argues that there are several difficulties and limitations of utilizing digital media, including adaptability, uncontrollability, representability and applicability. These are constraints to value (co)creation activities. Therefore, companies and managers need to be aware of the risks they may face when using digital media.

The third aim was to explore its (value and value creation of music in the digital age) implications for actors (e.g. consumers and producers) in the music industry. This research shows the production and consumption of independent music in South Korea. Literature suggests that there has been some overlap between production and consumption. However, the literature review also offers that the overlap between production and consumption has become far greater in the digital age. It illustrates that these two spheres, which used to be understood as having different responsibilities and roles, are now inter-linked. The value creation of producers and

318 consumers has converged in the digital age (Jenkins, 2006). Music audiences are not mere consumers nowadays; rather, by using social media to express and share their music consumption, they have become value co-creators. They express their identities and socialize in the digital space while consuming music. In the digital space, they create, capture, alter and share values that reflect the contexts of their everyday lives or express their creativity (Benkler, 2006; Cover, 2006; Deuze, 2012). This changing nature of value and value creation indicates that music consumers in the digital age are no longer pirates. What they do while using digital media can create diverse values that are symbolic, emotional and experiential. These values can contribute to the development and continuity of music culture consumers are passionate about (Baym and Burnett, 2009; Baym, 2011; Kibby, 2000). Music companies and musicians need to interact and communicate with their consumers to explore the rich contexts consumers create and to encourage their activities. Therefore, music companies need to redirect their focus in terms of the Internet’s impact on their businesses from a music piracy paradigm to a value co-creation paradigm. When they are able to escape from the music piracy paradigm that is governed by the traditional economic value and value creation at the firm level, they will be able to see the true possibilities of digital media and rich values music consumers create using digital media (Potts et al., 2008; Uricchio, 2007). In addition, record companies also need to understand that the value creation of music is networked with different business models and experts. The cases in South Korea depict this quite well (see section 6.3.3). Therefore, the value of music in this age is shaped by various other value-added services and people who use the services (Fox, 2004; Styven, 2007). However, they should also be aware that digital media has its own limitations and requires careful use.

10.2. Limitations

This research has investigated the independent music sector in South Korea. The findings of this research suggest how music consumers consume music in the digital age. In addition, this research shows the strategic practices record labels engage in to promote and sell music in these turbulent times. Music production and consumption are not only about buying or selling music but also concern the different ways music

319 consumers and record labels engaged with digital media. Therefore, the current digital environment in which music audiences and producers participate needs to be thought of as a co-creative community.

Although this investigation has provided rich details in terms of the production and consumption of independent music in the digital age, it would be hard to generalize the findings from this single case study conducted in one particular industry. Therefore, it is questionable whether the findings will apply to other industries. Studies of different industries may produce different outcomes. Additionally, the music markets in different countries could provide different results. This offers future research opportunities to gain a more detailed understanding of value creation by consumers, and companies’ efforts to interact with them. In addition, as this research is a case study of the independent music industry in South Korea, a research about the mainstream music industry in South Korea would offer a different understanding of the production and consumption of popular music.

This research is a qualitative research and collected primary data using semi- structured interviews with consumers and producers of the independent music sector in South Korea. Therefore, the findings of this research may only reflect the perspective of a small part of the industry and would not be able to reflect the more general case of the production and consumption of popular music. To overcome this limitation, applying different research method strategies such as carrying out a survey would produce different outcomes and implications in terms of the production and consumption of popular music in the digital age. Using statistical analysis would be able to offer more generalised findings and understanding in terms of the research questions.

Finally, the term value requires a more clear understanding because “the notion of value is a notoriously elusive concept in marketing and consumer research” (Karababa and Kjeldgaard, 2014). There is “a variety of ways in which the notion of value is used in marketing theory and consumer research” (Karababa and Kjeldgaard, 2014, p. 120). This means that the findings of studies which focus on the different concepts of value can vary - offering different perspectives and research implications.

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There is a possibility that a study may only reflect a particular concept of value. This study is not also free from the limitation.

10.3. Implications for Theory and Practice

The first implication of this research is that the value of music in the digital age cannot be fully explained by the economic standard. Record companies should consider their consumers as “operant resources that are endogenous to the value- creation process” (Vargo and Lusch, 2008c, p. 33) rather than seeing them as objects to be targeted and segmented using the traditional marketing mix (Vargo and Lusch, 2008c). This is based on a view that “value resides not in the object of consumption, but in the experience of consumption” (Frow and Payne, 2007, p. 91). Therefore, rejecting the notion of music, as goods that only have exchange should be a starting point (Condry, 2004). Condry argues that “if music is just a commodity, consumers will get it as cheaply as they can. If music is the art and lifeblood of a group they care about, fans will support that group. This could be the foundation on which to build alternative compensation systems” (2004, p. 359). Music in the digital age is no longer only produced and consumed in physical and rigid forms manufactured in a factory. Music consumers can now assign personal or collective meanings to music and share them with others without the limitations of time and space. Therefore, the value of music is not defined by economic terms alone, but can also include symbolic, emotional and experiential forms. This finding can provide managers with an understanding of the value of music and how it is created in the digital age. The critical implication for managers in the music industry is that the key point is not solely to sell large volumes of records but how to encourage personal and collective consumption that will construct and distribute the symbolic value of music. These findings extend the literature on value and value creation. In addition, the findings on the symbolic consumption of music extend research on music consumers and their consumption experience.

Secondly, the music consumers’ attitudes indicate that consumers pursue the co- creation of the music community and its brand. Previous research about consumer sovereignty and identity projects has shown consumers’ attitudes to marketplace

321 myths such as demythologization or resistance (Arsel and Thompson, 2011; Thomas et al., 2013). However, the present research shows the co-creative attitudes of consumers. Therefore, independent music companies need to find effective ways to work with their consumers. This strategy will offer music consumers the chance to develop strong attachments to the music they love. In addition, this offers further understanding of consumer culture theory, which has investigated how consumers pursue personal and collective identity projects in association with brands and commercial materials. Furthermore, this research shows that the independent music scene is made up of a mixture of consumption communities. It may be defined as a co-creative consumption community. This co-creativity is also shown by the resource integration that occurs between participants in independent music communities and projects in South Korea.

The third implication of this research is that consumers’ value creation is dispersed and networked, and companies are required to participate in the consumers’ value creation sphere. The consumers’ participation in consumption communities does not only refer to offline activities or central online communities. Rather, this research shows that dispersed consumers in the networked space, such as on social media, can create value. Grönroos and Voima (2013) argue that companies need to access consumers’ value creation sphere to co-create value with them. The findings of this research indicate that companies who want to access the consumers’ value creation sphere should cultivate relationships and interactions with them in order to co-create value. This way, the companies can gain benefits whether these are tangible or intangible.

Previous studies (e.g. Nambisan, 2002; Nambisan and Baron, 2009, 2010) have normally shown that companies need to invite their consumers to gain benefits from them or encourage activities of online consumption communities that the consumers can participate in and create value from (e.g. Schau et al., 2009). Therefore, the studies show that engagement with the consumers and their value creation normally takes place in physically bounded virtual spaces.

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However, this study demonstrates that the value co-creation between producers and consumers can occur in dispersed networks on the Internet. The daily uses of media by people and their networks within the media illustrate that relationships in the media cannot be easily defined. Although the previous studies show that the boundary of place for value co-creation is physically or visibly fixed, this study implies that the boundary can be flexible and invisible. The networks that can be strongly or loosely tied can be an important place.

In the virtual space, there is no distinction between value givers and value receivers. Therefore, the phenomenon cannot be fully explained by the theory of gift giving; sharing is a more appropriate term. In this sense, the music consumers’ value creation can be defined as a consumer sharing system. This also indicates that consumers do not necessarily participate in companies’ value-creating spaces, and that value can only be created by consumers. This implication suggests that the consumers’ sphere of value creation is key, and thus firms must try to participate in that sphere if they want to co-create value with their consumers. In particular, the value (co)creation strategies of record companies suggested in this research could be a platform for other companies to use. In addition, the value (co)creation activities of consumers described here could help companies to understand how consumers produce value and how they engage with digital media. These strategies, from both consumers and producers, extend existing research on value creation and co-creation.

This research implies that relationships and interactions are critical for value co- creation between producers and consumers. Schau et al. point out that “cocreative actions have not been clearly identified and categorized in a uniform or generalizable way, nor has the nature of their value creation been revealed” (2009, p. 31). However, this research suggests four specific practices to co-create the value of music that the labels in South Korea conduct to cultivate relationships with their fans and to encourage expressive circulation of their content. Gummesson argues that the marketing relationship has been trapped in the objective of ‘managing customers’ rather than ‘cooperating with them’ (2008b, p. 323).

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This research suggests that companies which emphasise on relational aspects and the interactive nature of value co-creation have the opportunity to truly cooperate with consumers. Schau et al. also argue that “companies that want to encourage cocreation should foster a broad array of practices, not merely customization” (2009, p. 41). The findings of this research show that if companies try to develop relationships and initiate interactions with their consumers, they will respond. To get positive reactions from the consumers, the companies should offer the right value propositions that their consumers can satisfy and which can encourage co-creation of the consumption experience. In addition, the companies need to send signals to their consumers that they care about them. This will contribute to the building of trust between them. The consumers will return their emotional ties, showing intangible supports such as showing moral responsibility or expressing attachments to the companies’ brands or products.

Apart from the relationship building between the companies and consumers, the companies should also pay attention to ways in which they can facilitate interactions between their consumers. The active interactions between the consumers will increase the chances that the corporations’ message or content can survive and encourage people to contribute to the extra creation of value for it. Moreover, the findings indicate that strong control of their products and intellectual properties does not offer them benefits in this age of social media. Rather, they should allow consumers to share and recreate content freely. By endorsing freedom, the companies will witness the spread of content and creative expression of their consumers which will add value for their products. They should understand that these are ways to utilize technologies in the current era and various uses by people. The connected consumers will eventually contribute to improve the firms’ performances, and have positive brand or product images.

10.4. Future Research

It would fruitful for future research to investigate the impacts of digital communications media on different consumption cultures or industries, so as to expand our knowledge of how consumers and producers are engaging with digital

324 technologies. This should involve research about open digital networks such as social media, not just central digital spaces such as firms’ websites. In addition, further research is required into firms’ attempts to participate in the consumers’ value creation sphere (Grönroos and Voima, 2013), as existing research has mainly investigated consumers’ participation in firms’ value creation spaces. Such an approach will also be beneficial in terms of offering further understanding of the music industry in this networked age in which consumers’ activities in social media are highly regarded (for example, Billboard recently announced that YouTube’s streaming data would be included in its chart).

As this research has investigated the consumers and producers of independent music, which is a form of subculture, a study of the consumers and producers of mainstream music could offer further understandings. This kind of research could be started from scratch in order to depict the nature of music production and consumption in the digital age or based on the findings of this research, as a comparison study. For consumer research, the findings regarding the symbolic consumption of music could act as a guide for future research on music consumption. In addition, consumers’ desire to minimize inappropriateness and maximize appropriateness could act as a theoretical platform from which to investigate other consumption cultures.

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Appendix 1. Typical Interview Guide for Record Label

Part 1. Questions about the music community 1. Please describe the independent music sector 2. What make people come to this area, Hong-dae 3. Please provide your thought why the audiences shows interests in independent music

Part 2. General questions to see effects of the Internet and interactive media forms 1. What are the main Internet’s impacts on your organisation? 2. What are differences from the past business operations of the music scene and your organisation? 3. What sorts of social media forms are popular for independent record labels and audiences, and why? 4. What are main social media/Internet community’s advantages and disadvantages affecting on the independent music industry and its practices? 5. What are difficulties to utilise social media in your firm?

Part 3. Questions about relationships with audiences 1. Please describe the impact of social media uses by audiences on your organisation 2. Please describe your strategies or daily practices to communicate and interact with consumers and users? 3. What are motivations to have relationships with audiences? 4. In what ways, is user’s engagement and participation important? Why? 5. What are advantages and disadvantages to have relationships with audiences?

Part 4. Questions about relationships with digital music services, firms or experts 1. Please describe business relationships such as outsourcing, partnerships, sponsorships or alliances you have 2. Please describe relationships with other digital music services or experts 3. What are motivations to be engaged with digital music services or experts? 4. What are advantages and disadvantages to have relationships with digital music services or experts? 5. What are difficulties to manage relationships?

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Appendix 2. Typical Interview Guide for Music Audiences

Part 1. Questions about independent music 1. What is independent music? 2. What make you bring to this area, Hong-dae? 3. Please tell me musicians and genres you like and Why?

Part 2. General questions on music consumption on the digital age 1. How do you use the Internet to experience music? 2. Where and how you get information about music you like? 3. What are differences from the past music consumption?

Part 3. Questions about the impacts of Interactive media forms 1. What sorts of social media forms do you use to engage with indie music? 2. How do you engage with indie music related online communities? 3. What sorts of contents are shared and do you share generally? 4. What are motivations and reasons to participate in the space? 5. What are positive and negative aspects of the social media forms in terms of the interaction with other music audiences, musicians and record labels?

Part 4. Questions for members of a particular projects or communities 1. Please describe your community or project 2. Why did you decide to initiate or participate in the project or community? 3. What are pros and cons to be involved in the community or project? 4. What sorts of supports do you get and from who? (e.g. cultural, commercial resources) 5. What are motivations to continue the project or community?

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Appendix 3. Example of codes and themes developed using NVivo 9

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