1 Introduction
The music industry – the businesses and professionals who monetize compositions, recordings, and live experiences – has long been in flux, with disruption intensifying since the turn of the millennium (McLean et al. 2010). Prior research examines the crisis triggered by peer-to-peer file-sharing platforms such as Napster (Spitz and Hunter 2005; Hugues et al. 2008; Aguiar and Waldfogel 2016; Liebowitz 2016) and other economic and technological shocks that have reshaped business models and, therefore, the Music Industry supply chain. These shifts are eliminating some traditional roles and creating new ones, forcing professionals to adapt and influencing consumers. The Metaverse, VR/AR convergence, and AI are accelerating change, increasing uncertainty and motivating further academic reflection.
This paper examines how recent technological and economic shifts are reshaping ecosystem roles, removing some actors, adding others – and changing music consumption (recorded and live). To frame this reordering, we draw on mediamorphosis (technology-driven change in cultural sectors) (Blaukopf 2016; Hijleh 2018), the prosumer (proactive consumer involved in service design) (Grinnell 2009), and the produser (blurred boundaries between user and producer) (Galan 2021; Johnson and Barlow 2021), culminating in the phygital consumer.
The paper is structured as follows. First, we analyze the music industry’s distribution value proposition and supply-chain transformation, with streaming as the dominant model. Next, we examine the transition toward a phygital consumer ecosystem—hybrid physical/digital production, distribution, and consumption—and its implications for relationships among artists, entrepreneurs, and consumers. We then contrast prospects and consumer impacts using a Delphi study based on managers’ forecasts. Finally, we present the main conclusions and study limitations.
2 From verticality to horizontality in the music industry
The music industry includes businesses that shape the supply chain through vertical or horizontal structures: (1) the recording business (recordings and their distribution in physical and digital formats), (2) music publishing (monetizing composition rights), and (3) live music (promoters contracting artists and venues to generate ticket revenue).
Over the past two decades, new technologies for recording and transmitting music have expanded the range and value of music products. The digital environment has reshaped production, distribution, and promotion – especially in recording (Bourreau, Moreau and Gensollen 2008) – and, to a lesser extent, publishing and live music. Industry structures are changing (Towse 2017; Sinnereich 2019) as new digital consumption patterns emerge (Molteni and Ordanini 2003). New distribution models (Wikströn 2012) have followed the shift away from physical formats, with online platforms distributing music via downloads and streaming and becoming key intermediaries in the recorded-music supply chain (Graham et al. 2004).
In the 21st century, technological transformation is blurring the boundaries between record companies, promoters, A&R agencies, and publishers. As business models and competitive dynamics evolve, new roles are emerging, such as the Artist and Label (A&L), positioned between digital distribution and traditional record companies in terms of services to creators (https://www.gov.uk/government/news/cma-provisionally-clears-sony-s-acquisition-of-awal 2022).
Rapid digital adoption has decentralized recorded-music distribution (Arditi 2014) and boosted interest in blockchain across the Music Industry, from creation to exhibition (O’Dair and Owen 2019; Bing 2022), alongside AI (Cao and Zhang 2020). Despite ongoing ethical debate (Manjarres 2021), AI’s convergence with AR/VR („Music in Extended Realities“) suggests uncertain futures, from ambient audio to fully interactive soundscapes (Turchet et al. 2021). These contexts add new supply-chain actors and reinforce a hybrid listener moving between physical and digital worlds.
Similarly, Non-Fungible Tokens (NFTs) are entering the Music Industry and live festivals, enabling new music communities and stronger management of creators’ rights (Katje 2022). While outcomes remain uncertain, this trend may support new music business models.
3 The music industry’s value proposition through online music service platforms
Mass music consumption initially depended on record companies producing and distributing physical recordings. Over time, labels consolidated into large, diversified entertainment groups (Civano 2003). Following Sonys 2004 merger with Bertelsmann (Sony BMG) and Universal 2011 merger with EMI, the recording industry coalesced around the Big Three: Universal, Sony, and Warner.
Music Industry commercializes musical creations as products and services that deliver value. This value proposition has evolved with shifting business models: traditional models persist with updated propositions, while innovative ones are reorganizing the sector. This study focuses on these changes.
Digitization and online distribution have shifted recorded-music consumption from ownership (physical collections) to on-demand access (Nicholson 2019). Streaming offers unlimited access to large catalogs, affecting consumption volume, variety, and discovery (Datta, Knox and Bronnenberg 2018). Ownership and access now coexist as complementary value propositions, reshaping supply-chain business models from creators to consumers (Wikström 2012).
4 New intermediaries in the music supply chain
Self-production has grown, reducing artists’ dependence on music companies (Rogers et al. 2023). While artists and independent labels can produce and sell music, digital distribution has posed challenges. Until recently, access to online platforms was possible but administratively complex, as service providers had to negotiate legal terms with many rights holders (Sánchez et al. 2016). This led platforms to rely on a new intermediary, the music aggregator – responsible for uploading content. Aggregators pool „the demand of many customers or the products of many suppliers“ (Bailey and Bakos 1997, p. 9); although common in many industries, their role in digital music often goes unnoticed (Galuszka 2015).
With the rise of aggregators, rights holders (labels or independent artists) can either negotiate directly with digital platforms or use an intermediary. Direct deals are difficult because platforms prefer to secure the most content through as few negotiations as possible (Association of Independent Music 2019) and impose technical and metadata requirements. Aggregators handle these requirements, reducing administrative burden and acting as intermediaries in the digital music supply chain (Chen 2022).
In short, with the emergence of this figure, two different supply chains are proposed for the dissemination of musical creations, starting from the record label or directly from the artist and/or independent producer:
• Artists can stay with a label that combines physical distribution with digital distribution via an aggregator that uploads music to streaming and download platforms.
• Alternatively, artists can self-produce and use an aggregator to distribute their music on major streaming platforms.
Streaming platforms – and, by extension, aggregators – have reshaped the music industry supply chain by creating a more direct route between creators and digital listeners. Self-publishing artists and micro-labels now deliver large volumes of content to the mainstream market, which was not feasible pre-digital. Early evidence also suggests modest demand shifts toward a wider set of creators beyond the major-label system (BPI 2021).
In line with the above, the emergence of the Internet in the music landscape is associated with three drivers of change (Carreras 2017) that alter business models and relationships between industry players, namely:
• The way artists produce and collaborate with each other.
• The way audiences consume and participate.
• The relationship between the artists and their fans (contact, music recommendations, etc.).
Digital tools enable greater self-production and more independent dissemination at minimal cost. Social media can make artist-fan relationships direct, reducing reliance on record labels. Connected devices also close the music-consumption cycle – search, discovery, acquisition, consumption, and sharing. Metaverse further extends this chain by enabling virtual live-concert experiences (Turchet 2023).
Online music service platforms (especially Spotify) disintermediate downloads and streaming, reducing wholesalers/retailers and eliminating physical storage and transport. Distribution becomes the industry’s core activity rather than a marketing tool (Raphaël 2019). New players include white-label digital distributors (e.g., Sonosuite) and multinationals offering broader artist services (e.g., Believe Digital).
Carreras (2017) attributes the success of online music distribution to continual platform business-model innovation and global expansion. While some platforms remain open to independent artists and labels (Patiño 2021), others require distribution via aggregators such as CD Baby or TuneCore. Aggregators offer basic or premium services (e.g., release management, playlist pitching, physical distribution) and charge per release, by commission, by subscription, or a mix. They also earn from downloads, end-user subscriptions, and, increasingly, advertising-funded freemium access.
From a global perspective, Majors still dominate top positions in both physical and digital channels. In negotiations with aggregators, their scale enables substantial corporate power over other players. Yet aggregators also hold a strategic position that can redirect – and especially moderate – the Majors’ power in the recorded-music supply chain, ultimately affecting consumers.
These developments are reshaping business structures across recorded and live-music supply chains, redefining relationships among industry actors. New intermediaries are also entering the supply chain, further intensifying digital reintermediation.
On another note, growing festival demand and live-music opportunities are strengthening links between recorded and live business models across the supply chain. As recorded sales have fell over the past decade, revenues of live music have become more important (The Economist 2015).
All these changes are bringing the phygital consumer to the fore.
5 Towards a phygital music consumer in the new technological context
The term „phygital“, emerge in marketing discipline to put in the focus of the strategy on building relationships with customers in both physical and digital domains creating immersive and frictionless experiences for customer and increase consumer retention (Mishra et al. 2023). Recent research examines how technology shapes neuroscience-informed consumer psychology and marketing dynamics (Del Vecchio 2023; Johnson and Barlow 2021), althouhgt this research has been focused mainly on retail (Hewett 2016; Christchurch 2017; Banik 2021; Pusceddu et al. 2025). Althought, the phygital consumer behavior spans music products, and artistic disciplines, and attitudes about them (Joy 2023; Pangarkar et al. 2022; Belghiti 2017; Banik and Gao 2023) studies linking hybrid-consumer insights to music remain limited.
The music industry continues to evolve faster with technological progress. New changes are expected in emerging spaces such as Metaverse, where physical/virtual hybridization creates new opportunities for stakeholders. Musical experiences already exist there (e.g., live virtual concerts) with artistic and commercial implications; Turchet (2023) frames this as a Musical Metaverse enabling deeper musician audience engagement and new revenue sources.
Blockchain extends digital infrastructure by enabling peer-to-peer value exchange without intermediaries. It supports business models in which artists connect directly with fans and automate payments (Awuor 2020), IP management (Ciriello et al. 2023), and digital content storage/access (Potts and Rennie 2019; Cai 2020). This can shift market participation terms toward artists; Turchet (2023) documents multiple music-industry use cases. In relation to the Music Industry, the role of possession in streaming has been analyzed (Danckwerts and Kenning 2019), concluding that, although there is no physical enjoyment, the psychological appropriation based on the music positively influences the sense of control. These impressions are close to the phygital concept of the music consumer, where the physical live experience is conditioned by a digital purchasing process.
Thus, the evolution towards a hybrid phygital environment – physical and digital – is growing in today’s music ecosystem. We are therefore talking about a consumer who has matured in digital transactions, not only in the consumption of streaming music, but in all fields of economic activity. Every sector is being affected by this trend, and the world of culture is no exception. Entrepreneurs, artists, and consumers are part of a process of change that is already underway. The digital and the physical are no longer opposing contexts, but they form a new hybrid stage, where both are enhanced.
As consumers move across physical and digital contexts, they seek experiences that combine both. The Music Industry is responding with personalized, interactive, and social experiences, especially since COVID-19 (Hansen et al. 2021), tailored to userssituational context, age, and circumstances.
This adaptation reflects both technology and platform algorithms that tailor content to user searches (Muller 2015). In the phygital era, recorded and live music increasingly coexist and reinforce each other: recorded music remains key for communication and promotion (Martin 2021), while the live and licensing segments have grown as record-label revenues declined (Wikström 2014). Overall, the phygital consumer turns listening into an end-to-end journey – from platforms to live concerts – across the industry’s value chain. To better understand this uncertain outlook from industry actors’ perspectives, the next section presents a Delphi survey of experts.
6 Methodology
Considering the exploratory and prospective nature of this work, a qualitative type of research has been carried out. Specifically, a Delphi analysis has been designed (Linstone 2022; Landeta 2006) adapted to the new environment of technological demand and musical behavior (Insunza 2017). With this, and through a process of consensus among experts in the music value chain, the aim is to identify the future scenario of the phygital consumer. In short, it is about gathering impressions about what is likely to happen in the management and exploitation of the music business and its consequences on consumer behavior, considering both recorded and live music, as well as their interactions.
7 Selection of experts
Expert selection is central to Delphi studies, as it shapes the quality of collected information and the reliability of results. Following Day and Bobeva (2005), we selected participants for their specific knowledge of the Music Industry across recorded and live music. Expertise was defined by (i) the expert’s perspective and (ii) their position in the Music Industry value chain. Finally, the panel was designed to be heterogeneous (Bolger and Wright 2011) and to reflect diverse industry views.
| Type | Profile |
|---|---|
| Music holding | Communication |
| Music festival | Marketing |
| Independent music label | CEO |
| Music festival | Director |
| Musical producer | Producer |
| Freelance | Consultancy |
| Music festival | Founder |
| Music live distribution | Director |
Table 1: Type of profile in the Delphi process
Source: Authors
8 The Delphi processes
To test the formulated hypotheses, a survey of experts in the sector was carried out. Considering the multidimensional nature of the phenomena studied, this survey took the form of a Delphi analysis. This technique is a method of structuring an effective communication process when dealing with a group of individuals in relation to the resolution of a complex problem (Linstone and Turoff 1975). Expert value judgement is very valid in non-exact disciplines, such as the social sciences, or in situations of uncertainty.
The Delphi process was conducted through email-based questionnaires via the Easy Survey platform between April and June 2023. Following Delbecq, Van de Ven and Gustafson’s (1975) recommendations, iterations were grounded in conclusions from the literature review on the phygital consumer (Aparicio et al. 2017). The number of rounds was determined by response stability (Landeta et al. 2011), marginal information gain, and the absence of extreme positions (Linstone and Turoff 1975).
The methodology comprised three steps: questionnaire design, expert selection and distribution, and data collection and processing. The instrument consists of 25 questions across four thematic blocks – defining the Music Industry (MI) as the sum of the Record and Live industries:
• Block 1: The MI and the present. Role of today’s consumer.
• Block 2: MI economic structure.
• Block 3: MI re-intermediation.
• Block 4: MI and the future. Role of the phygital consumer.
Blocks 1 through 3 examine expert perceptions of innovation intensity, economic structure, and emerging intermediaries in the MI Supply Chain, respectively. Block 4 focuses on future scenarios in which the hybrid consumer takes center stage.
9 First round
The purpose of the first round is to validate and receive constructive feedback on the refined list of objectives obtained in the face-to-face phase. The questionnaire for this round had three main blocks: 1) rating the importance of each phygital consumer role objective using a Likert scale (Claveira 2021) from 1= least important to 5 = most important), 2) adding new objectives if they thought some were omitted or adjusting the nuance of the listed objectives if necessary, and, finally, 3) selecting the three most important objectives and explaining the reasons for their selection. The results obtained are described at the Table 2 and Table 3.
| Questions | Items | Average | Median | Q1 | Q3 |
|---|---|---|---|---|---|
| Indicate the level of impact that the following technological innovations are having on the recording MI. (Rate from 1 to 4 according to the impact of each of the innovations. Where 1= Very insignificant, 4= Very significant) | Metaverse | 1.25 | 1 | 1 | 1.25 |
| NFTs | 1.75 | 1.5 | 1 | 2.25 | |
| Virtual reality | 1.37 | 1 | 1 | 2 | |
| Artificial intelligence | 2.12 | 2 | 1 | 3 | |
| Indicate the level of impact that the following technological innovations are having on Direct MI. (Score 1= Very insignificant, 4= Very significant) | Metaverse | 1.12 | 1 | 1 | 1 |
| NFTs | 1.25 | 1 | 1 | 1 | |
| Virtual reality | 1.5 | 1.5 | 1 | 2 | |
| Artificial intelligence | 1.37 | 1 | 1 | 2 | |
| With respect to the technological transformation that MI is undergoing, please indicate the level of intensity you think consumers perceive the impact of innovation on each of the following areas of influence (Score 1= Very insignificant, 4= Very significant) | Product | 2.5 | 2.5 | 2 | 3 |
| Process | 2.12 | 2 | 2 | 2.25 | |
| Organization | 1.5 | 1 | 1 | 2 | |
| Marketing | 3.12 | 3 | 3 | 3.25 | |
| Taking into consideration the processes that characterize the composition and creation of music, indicate the degree of intensity you think the consumer perceives the impact of technological transformation (Score 1= Very insignificant, 4= Very significant) | The creative process itself | 2.5 | 2.5 | 2 | 3 |
| Production/Editing | 2.37 | 2 | 2 | 3 | |
| Distribution | 2.25 | 2 | 1.75 | 3 | |
| Promotion | 2.75 | 3 | 2 | 3 | |
| Taking into consideration the processes that characterize the Live Music exhibition, please indicate how intensely you think the consumer perceives the impact of technology on the following areas (Score 1= Very insignificant, 4= Very significant) | The creative process itself | 2 | 2 | 2 | 2 |
| Production/Editing | 2.12 | 2 | 2 | 2.25 | |
| Distribution | 1.87 | 2 | 1 | 2.25 | |
| Promotion | 2.75 | 3 | 2 | 3 | |
| Changes in the MI business model will be explained mainly by the dynamics of change of: (Score with 1= Very insignificant, 4= Very significant) | The industry | 2.12 | 2 | 2 | 2.25 |
| The consumer | 3 | 3.5 | 2 | 4 | |
| Consumer-driven industry | 2.87 | 3 | 2.75 | 3.25 | |
| The industry-influenced consumer | 2.12 | 2 | 1.75 | 3 |
Table 2: Statements valuations
Source: Authors
| Agree | Neither agree nor disagree | Disagree |
|---|---|---|
| The new environment characterizing the music industry offers greater opportunities for music styles associated with niche markets. | The dominant position of technology companies, directly or indirectly related to music, will be affected by the loss of bargaining power with new players. | The dominant position of the Majors (Universal, SONY-BMG, Warner) in the market will be affected as they will lose bargaining power with the new players. |
| The transformations in MI marked by new digital consumer behavior represent a qualitative leap in the economic and historical evolution of the sector. | Consumers will be increasingly active participants (through their participation in social networks and virtual reality) in the design of music products. Their position as prosumers will be consolidated. | |
| The economic crises generated by the pandemic, the Ukraine-Russia war, rising inflation and other exogenous factors hamper the competitiveness of the music industry. | In this new environment, consumers will consolidate their music consumption habits in digital listening and enjoyment of the live experience in an integrated way. | |
| Self-production will be consolidated as an alternative to the model represented by the Majors (Universal, Sony-BMG, Warner). | ||
| The transformations in MI, driven by technology, have generated a qualitative leap in the incorporation into the sector of unprecedented employment figures, such as aggregators. | ||
| The transformations in MI, driven by technology, generate a qualitative leap in the reordering - not elimination - of the sector's labor figures. | ||
| Music consumption is increasingly linked to other disciplines, such as audiovisual or transmedia (e-sports, gaming, twitch...). | ||
| In the new context, there are greater opportunities for the entry of new players (barriers to entry in the sector have been lowered). | ||
| Collaboration between different actors in collaborative networks will be necessary as it is more efficient than vertical integration. | ||
| Understanding the music business as a business supported by three branches (record label, publishing, live), I believe that its horizontal interdependence (collaborations with third parties) will increase. | ||
| In this new environment, consumers will consolidate their digital-only music consumption habits. | ||
| In this new environment, consumers will consolidate their music consumption habits in two ways: first in digital listening and then in the enjoyment of the live experience. |
Table 3: Qualitative valuations
Source: Authors
10 Second round
The second round included the professionals who participated in the first round. To increase consensus, each participant received two documents: (i) the aggregated first-round results and (ii) a comparison showing where their responses differed from the group averages (using the first and third quartiles as reference points). As most answers fell within the median range, consensus was broadly achieved; participants could either keep or revise their initial responses (Insunza 2017). Data collection ran from June to July 2023, with 100% of first-round participants completing the second round.
11 Results
The music consumer’s emerging concerns (beyond the category of „listener“) mirror ongoing technological and economic disruption. While the drivers of musical taste remain hard to isolate (Byrne 2017), the industry faces unprecedented challenges in engaging customers whose consumption spans physical and digital contexts. This study therefore examines the present and outlines plausible scenarios for hybrid music-consumption behavior, based on input from experts across the Music Industry supply chain. The shared questionnaire reflects the hypothesis that current changes affect both creation/exhibition and recording/distribution, shaping final consumption.
On the one hand, it can be observed that issues related to Metaverse technology, NFTs, Virtual Reality or Artificial Intelligence generate agreement regarding their limited influence on the new models of music consumption, as well as on the artist’s own creative process, the production of a record or its distribution.
On the other hand, the power of the Majors remains fundamental in defining this new framework of music consumption. And while there is agreement that the new players entering the supply chain are unprecedented and the barriers to entry for competitors are lowered, they do not influence music consumption patterns.
This ties in with a unanimous expert opinion, relegating the role of prosumer to that of mere music consumer, without being part of the supply chain and maintaining its dichotomous consumption role, i.e., physical, and digital, without integration. Another paradox lies in the assertion, also elicited by a high level of agreement, that self-production will consolidate as an alternative to the model represented by the Majors, even though the Majors will continue to dominate the Music Industry. Indeed, as outlined above, even if the barriers to entry into the music supply chain are lower, the mayors will use these disruptions to continue to maintain their dominance.
12 Contributions to academic study
This paper contributes to this debate by diagnosing and estimating current and potential transformations in the Music Industry supply chain as conditioned by the phygital consumer. As technological disruption progressively dissolves the boundaries between physical and digital experience, consumer behavior is coalescing into hybrid patterns that challenge established models of value creation and intermediation. In this sense, the present study advances a dual analytical contribution: theoretically, it extends the conceptual framework of the phygital consumer to the specific dynamics of the music industry supply chain; empirically, it triangulates a systematic literature review and digital consumption data with a Delphi study drawing on a heterogeneous panel of Music Industry agents. The findings are thus offered not only as a diagnostic tool for practitioners, but as a theoretical reflection on the evolving nature of cultural consumption in digitally mediated markets.
13 Limitations and future studies
This study is subject to several limitations that simultaneously delineate productive avenues for future inquiry. First, the expert panel’s composition – weighted toward managerial, distribution, and recording perspectives – may introduce a structural bias by underrepresenting technological actors operating at the periphery of the industry. This calls for future research designs that incorporate a broader epistemic community, including platform engineers, AI developers, and cross-industry digital strategists. Second, the Music Industry’s accelerated rate of transformation, driven by endogenous disruptions and exogenous shocks alike (e.g., the geopolitical instability associated with the Ukraine-Russia conflict at the time of data collection), raises legitimate concerns about the temporal validity of the findings. This is consistent with a broader epistemological challenge in fast-moving industries: the risk that empirical snapshots are superseded before they reach publication. Third, the systemic uncertainty surrounding artificial intelligence – both as a technological paradigm and as an economic force across cultural industries – Introduces a layer of structural indeterminacy that limits the anticipatory reach of any single study.
This last point merits particular theoretical attention. Recent developments – AI-generated compositions attaining commercial visibility, algorithmically produced vocal impersonations of deceased artists achieving cultural credibility, and machine-generated melodic and harmonic content entering mainstream consumption – are not merely anecdotal. They represent a qualitative shift in the ontology of musical authorship and, by extension, in the nature of consumer engagement. Crucially, these transformations are largely invisible to the typical consumer, which raises important questions about asymmetric awareness and its implications for demand-side theory in cultural markets.
In this context, the proliferation of speculative, often contradictory narratives in literature underscores the epistemological value of methodological approaches – such as the Delphi method employed here – that privilege structured, iterative reflection over reactive commentary. Future research should continue to examine what we term: the transitional condition in which the role of the music consumer is being renegotiated within a regime of permanent disruption and recurrent crisis. Theoretically, this points toward a reconceptualization of consumer agency in cultural industries – one in which the locus of change progressively migrates from institutional actors toward the demand side, shaped not only by intra-industry dynamics but by the gravitational pull of adjacent digital ecosystems. Whether the Music Industry retains sufficient structural weight to govern this transition, or whether it is the consumer – informed, hybrid, and increasingly empowered – who ultimately sets the pace, remains an open and consequential question for the field.
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Kľúčové slová/Key words
phygital, music industry, music consumer, supply chain, Delphi
phygital, hudobný priemysel, spotrebiteľ hudby, dodávateľský reťazec, Delphi metóda
JEL klasifikácia/JEL Classification
M31
Résumé
Premena dodávateľského reťazca v hudobnom priemysle v novom fygitálnom prostredí. Smerom k hybridnému spotrebiteľovi.
Táto štúdia analyzuje a odhaduje súčasné a potenciálne zmeny v dodávateľskom reťazci hudobného priemyslu súvisiace s „fygitálnym“ (fyzicko-digitálnym) spotrebiteľom. Vzhľadom na to, že technologické zmeny menia úlohy v tomto odvetví, správanie spotrebiteľov sa posúva smerom k hybridným modelom. Túto analýzu ponúkame ako podnet k zamysleniu pre odborníkov, pričom kombinujeme prehľad literatúry a analýzu návykov v oblasti digitálnej hudby s Delphi-štúdiou realizovanou na heterogénnej vzorke subjektov hudobného priemyslu.
Recenzované/Reviewed
7. March 2026 / 18. March 2026












