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

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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

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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

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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)

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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

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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

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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

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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.

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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

Copyright Statement

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thesis) owns certain copyright or related rights in it (the “Copyright”) and s/he

has given The University of Manchester certain rights to use such Copyright,

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(“Reproductions”), which may be described in this thesis, may not be owned

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and Reproductions cannot and must not be made available for use without the

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and/or Reproductions.

Further information on the conditions under which disclosure, publication and

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University IP Policy

(see http://documents.manchester.ac.uk/DocuInfo.aspx?DocID=487), in any

relevant Thesis restriction declarations deposited in the University Library, The

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(see http://www.manchester.ac.uk/library/aboutus/regulations) and in The

University’s policy on Presentation of Theses

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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.

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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).

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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

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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

14

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,

15

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

16

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

17

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.

18

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.

19

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.

20

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.

21

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

22

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

23

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

Exchange

Two-party reciprocal relationships A↔B

Generalized

Exchange

At least three actors’ univocal and reciprocal

relationships A→B→C→A

Complex

Exchange

A system of mutual relationships between at

least three parties A↔B↔C

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).

24

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

25

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

26

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

27

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

28

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).

29

Table 2. 2. The competing frames of value creation

Traditional Assumptions of Value

Creation

New Assumptions of Experience-Based

Value

1. Value is exchanged between the

firm and a customer. Value is

created by the firm.

2. Value is embedded in products

and services (therefore

innovation is about products

and services).

3. The value chain represents the

value creation process.

4. Innovation is about

technologies, products, and

processes.

5. Customers have a choice of

whether to “buy” or “not buy”

and managers are there to

persuade them.

1. Value is created at the point of

exchange.

2. Value is co-created by the

consumer and the firm.

3. Value is embedded in experiences:

products and services are carriers.

4. Experience fulfilment webs are not

sequential or linear value chains.

5. Innovation is about experiences;

technologies/products/processes

are critical but not the goal.

6. Customers make the key decision

and the associated tradeoffs.

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

30

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.

31

Table 2. 3. Inherent values in relationship and exchange marketing

Exchange Perspective Relationship Perspective

Customers are seen as someone the

marketer does something to, instead of

does something for.

Cooperation is required to create the

value that the customer is looking for.

Customers, as unidentified members of a

segment, are exposed to a number of

competing products, and they are

supposed to make independent choices

from among the available options.

Customers and suppliers or service

providers are not totally isolated from

each other. The choice of that to buy in a

relationship depends to some extent on

mutual influences in the interactions.

There is an interdependence between the

two parties.

Customers are seen as an antagonist who

has to be persuaded to choose a

particular option.

Customers are seen instead as a resource

together with whom the firm can create a

valued solution that fulfils the customer’s

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).

32

Table 2. 4. Services logic versus goods logic

Service logic Goods logic

Nature of the offering Value-supporting process. Value-supporting

resource.

Perspective

A process where a set of

resources interact with

customers, aimed at

supporting their processes

in a value-creating way.

A resource which the

customers use, possibly

together with other

resources, with the

purpose of creating value

for themselves.

Business logic

To facilitate processes that

support customers’ value

creation.

To make goods as

resources available to

customers for their use.

Customer’s role Co-producer and co-

creator of value.

Sole creator of value.

Firm’s role

Provide a service process

and co-produce and co-

create value in customers’

consumption process.

Provide customers with

goods as a resource and

sole producer of this

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.

33

Table 2. 5. Limitations and implications of distinguishing characteristics of services

Dimension Dispelling the Myth Perspective Inverted implication

Intangibility

Services lack the

tactile quality of

goods.

Services often have

tangible results.

Tangible goods are

often purchased for

intangible benefits.

Tangibility can be a

limiting factor in

distribution.

The focus on

manufactured output

is myopic and

goods-oriented.

Consumers buy

service even when a

tangible product is

involved.

Intangibles such as

brand image are

more important.

Unless tangibility

has a marketing

advantage, it should

be reduced or

eliminated if

possible.

Heterogeneity

Unlike goods,

services cannot be

standardized.

Tangible goods are

often heterogeneous.

Many services are

relatively

standardized.

Homogeneity in

production is viewed

heterogeneously in

consumption.

The normative

marketing goal

should be

customization rather

than standardization.

Inseparability

Unlike goods,

services are

simultaneously

produced and

consumed.

The consumer is

always involved in

the “production” of

value.

Only manufacturing

benefits from

efficiency of

separability.

Separability limits

marketability.

The normative

marketing goal

should be to

maximize consumer

involvement in value

creation.

Perishability

Services cannot be

produced ahead of

time and

inventoried.

Tangible goods are

perishable.

Many services result

in long-lasting

benefits.

Both tangible and

intangible

capabilities can be

inventoried.

Inventory represents

an additional

marketing cost.

Value is created at

the point of

consumption, not in

the factory.

The normative goal

of the enterprise

should be to reduce

inventory and

maximize service

flows.

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

34

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

35

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).

36

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

37

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).

38

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).

39

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.

40

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

41

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

42

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,

43

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-

44

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

45

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

46

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,

47

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

48

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.

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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).

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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

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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.

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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

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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

54

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.

55

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

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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

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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

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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

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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.

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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

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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

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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

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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.

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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)

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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

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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

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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,

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“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

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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

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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

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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

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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

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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

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‘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

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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

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

the next chapter.

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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.

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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

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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

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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.

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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

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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

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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

Music

30.84 29.85

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

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Table 4. 2. UK Market Share of Album Sales by Company by Volume (%)

Company 2005 2006 2007 2008

Universal

Music

25.5 30.0 32.7 35.7

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

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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

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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.

Copyright over sound recordings

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

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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

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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

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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.

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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.

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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

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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

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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

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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

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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

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).

Producer Text Audience

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Figure 4. 2. Two-step flow model

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

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’

Mass Media

= Opinion leader

= Individuals in social

contact with an opinion

leader

Text Audience

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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

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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

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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

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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 Music

Author Argument

Mixture of Active and Passive Consumption

Riesman (1950)

There are two types of listeners, a majority prefer to listen to commercial radio and a minority listen to uncommercialized music

Hall and Whannel (1990)

Teenage culture is a contradictory mixture of the authentic and the manufactured (1990, p. 29)

Everyday Experience

Chambers (1985)

Modern leisure is transformed into the very fabric of personal life, the most significant context in which we have the chance to affirm our ‘selves’ (1985, p. 17)

Williams (2001)

Music consumption can be meaningless and routine

Subculture Hebdige (1979)

Alternative expressions of cultural forms against mainstream cultural forms and societal standards

Fandom Lewis (1992)

Fans as a creative and imaginative group that offers creative 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

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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.

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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

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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

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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

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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,

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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

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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

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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,

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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

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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

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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

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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,

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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

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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

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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

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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

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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)

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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,

quantitative data

Produces rich, subjective, qualitative

data

Produces results with high reliability

but low validity

Produces findings with low reliability

but high validity

Allows results to be generalized from

the sample to the population

Allows findings to be generalized from

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

the role of theory in

relation to research

Deductive; testing of

theory

Inductive; generation of

theory

Epistemological

orientation

Natural science model,

in particular positivism Interpretivism

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 understanding Emphasis on testing and

verification

Focus on understanding from

respondent’s/informant’s point

of view

Focus on facts and/or reasons for

social events

Interpretation and rational

approach Logical and critical approach

Observations and measurements

in natural settings Controlled measurement

Subjective ‘insider view’ and

closeness to data

Objective ‘outsider view’ distant

from data

Explorative orientation Hypothetical-deductive; focus on

hypothesis testing

Process oriented Result oriented

Holistic perspective Particularistic and analytical

Generalization by comparison of

properties and contexts of

individual organism

Generalization by population

membership

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

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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

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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

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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

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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

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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

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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

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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

Record

Label

Interviewee’s

Position

Years in

Music

Industry

Genres Year

Established

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

I President 7

Rock, Folk etc 2005 Digital Media 2

J Manager 11

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

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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

Community Year

Established

Numbers of

Interviewees Gender Age Jobs Features

Community

A 2003 3

Male 30s Footwear

industry Online rock

music

community Male 40s Salesman

Male 30s Salesman

Community

B 2008 3

Male

20s University

students

Local

music and

culture

supporters

Female

Female

Community

C 2008 3

Female 30s Publishing

industry Music

concert

organizer

Female 20s University

student

Male 10s High school

student

Project A 2009 2

Male

20s

Video

producer Music

video

filming and

sharing University

student

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Project B 2011 2 Male 20s

Broadcasting

industry Podcast

production

University

student

General

Consumers

Group 3 Female 20s

Primary

school

teacher Long-term

indie music

fans University

students

Individuals 2 Female 20s

University

student Long-term

indie music

fans 30s Journalist

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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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 (%)

Age

Records

(incl. tapes

and CDs)

Books and

magazines

(incl. rental)

Movies

Videos

(incl.

rental)

Others N/A

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

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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

379404 410

353380

410373

286

183138

10884 78 81 80 82

0

100

200

300

400

500

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

records 80 66 27 27 17 9 3 6 6 7

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

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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

Age Internet TV Radio

Books/

Magazines Newspapers

Friends/

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

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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

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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

Turnover 2011 109.9 78.1

2012 168.5 106.5

Profit 2011 20.5 17.7

2012 47.8 21.4

Amount of Export 2011 48.0 31.8

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

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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

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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, %

56

18.5

129.3

3.3

0

10

20

30

40

50

60

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

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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

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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

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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-

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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,

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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,

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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,

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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 non-

utilitarian 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

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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

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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

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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

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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

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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

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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

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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

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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,

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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

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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

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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-

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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

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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

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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

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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

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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

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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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357

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?

358

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?

359

Appendix 3. Example of codes and themes developed using

NVivo 9