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Digitalisation and intermediaries in the Music Industry: The rise of the entrepreneur?

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Abstract

Prior to digitalisation, the vertical structure of the market for recorded music could be described as a large number of creators (composers, lyricists and musicians) supplying creative expressions to a small number of larger record labels and publishers. These funded, produced, and marketed the resulting recorded music and subsequently sold these works to consumers through a fragmented retail sector. We argue that digitalisation has led to a new structure in which the retail segment has also become concentrated. Such a structure, with successive oligopolistic segments, can lead to higher consumer prices through double marginalisation. We further question whether a combination of disintermediation of the record labels function combined with ‘self-publishing’ by creators, will lead to the demise of powerful firms in the record label segment. If so, this would shift market power from the record label and publisher segment to the retail segment (and new intermediaries such as ISPs), rather than increasing the number of segments with market power.

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Original languageEnglish
Pages (from-to)242-276
JournalSCRIPTed
Volume15
Issue number2
DOIs
Publication statusPublished - 29 Oct 2018
Peer-reviewedYes

Bibliographic note

Cite as: Morten Hviid, Sofia Izquierdo-Sanchez, and Sabine Jacques, "Digitalisation and Intermediaries in the Music Industry: The Rise of the Entrepreneur?", (2018) 15:2 SCRIPTed 242 https://script-ed.org/?p=3525 DOI: 10.2966/scrip.150218.242

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