The Move to Artist-Led On-Line Music Distribution: A Theory-Based Assessment and Prospects for Structural Changes in the Digital Music Market

Jesse C. Bockstedt, Robert J. Kauffman, and Frederick J. Riggins
International Journal of Electronic Commerce, Volume 10, Number 3, Spring 2006, pp. 7.

Abstract: New forms of digital distribution are dramatically transforming market structures in the recorded music industry value chain. We propose a model and theoretical perspective that take account both of the music industry’s traditional value chain and distribution network, and the product characteristics of digital music as related to consumer value creation. The model highlights changes in the market structure from the perspective of the players in the music industry value chain. Utilizing a series of propositions, we characterize the forces at work in the market transformation and show how each player’s role in the industry value chain is likely to change. We also examine the effects of market structure changes on intellectual property rights issues. Finally, we present a series of mini-cases that provide evidence in support of the proposed theoretical perspective.

Key Words and Phrases
: Digital goods, digital music, e-commerce, intermediation, market structure, MP3s, music distribution, music industry, on-line music, property rights, value chains