Conclusion

Summary

Digitization has revolutionized the music business since the millennium as radio did in the 1930s. The change, however, is not just technologically driven, but is embedded in a socio-cultural paradigm shift that alters the relation of music business actors, their business practices as well as aesthetic concepts. The 360-degree management model of artists has replaced the record centred value-added network, which emerged in the rock ‘n’ roll revolution of the 1950s. The artist is now in the centre of the value-added network and has the power to decide on partners to collaborate. Nowadays, there is no need for artists to give away all the copyrights and to enter in exclusive contracts. However, digitization has also lowered the market entrance barrier to the business. Anyone who makes music can put her/his music videos on YouTube, launch a crowdfunding campaign and use social media sites for self-promotion.

Thus, the prophecy of a disintermediation in the music business has not come true. Although “old” intermediaries such as recorded music companies and music publishers have lost some of the control in producing and distributing music, they established new business models to exploit their massive back catalogs to digital music service providers. Thanks to copyright and related rights, they are gatekeeping the access to music by controlling and even owning music streaming services. Recorded music companies have outsourced former key functions such as A&R, record manufacturing and distribution to focus on exploiting master rights. Music publishers have enlarged their repertoire base by acquiring copyrights and entire music catalogs and they have also entered the recording business and provide management services. The live music business has become dominated by a few concert promoters such as Live Nation owning concert sites, ticketing services and artist agencies. Thus, we can observe a convergence of the three music subsectors – publishing, recording and live business – to a single music industry support network for artists.

Along with this change, new market entrants such as Apple, Google, Amazon as well as telecoms and internet service providers indicate an innovative disruption (Christensen 1997) in the music business.