The business model and co-creation value in music industry: From product dominant to service dominant

With the popularity of digital music and Internet, music industry is facing with a huge challenge. For example, a large number of piracy lead to the physical store is rapidly reducing. To response the circumstances, the business model of music industry is changing from product dominant logic (PDL) to service dominant logic (SDL). In the context of SDL, consumer is a co-creator of value. Therefore, this study investigates how the consumer´s co-creation effect on the value of service innovation in music industry. In addition, while [29] has proposed PFI model to demonstrate the effect of complementary assets and appropriability on technological innovation, we are curious whether complementary assets and appropriability cause the same outcome in service innovation of music industry. And, due to the competitive industry environment, instantly responding or predicting the demands of environment or consumer are needed. Therefore, we also examine the effect of market sensing capability on the value of service innovation. Taiwan is the leader in Chinese pop music industry. So, we collect the data from Taiwan senior managers, directors, and musicians, and use AHP approach to enclose what factors will affect the value of service innovation, and we hope that this findings can contribute to the business strategy in music industry.