The Move To Artist-Led Online Music Distribution: Explaining Structural Changes In The Digital Music Market
(MISRC WP 04-22)

Jesse C. Bockstedt, Robert J. Kauffman and Frederick J. Riggins

[Full Paper in pdf]

We propose a new model for understanding the transformation of the market structure in the recorded music industry value chain in the presence of new forms of digital distribution. Our model takes into account the traditional music industry’s value chain and distribution network, as well as the product characteristics of digital music as they relate to the creation of consumer value. We characterize the changes in market structure on the basis of the various perspectives that different players in the music industry value chain possess. We also present a set of propositions that highlight the forces at work in the market transformation and how each player’s role in the digital music industry value chain is likely to change. We specifically note the new tensions that arise around intellectual property rights for digital music, as the market structure changes. We support the propositions with illustrative mini-cases.

KEYWORDS: Digital goods, digital music, intermediation, MP3, market structure, music distribution, music industry, online music, property rights, value chains.