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

The market for music products has recently been subject to dramatic forces for change. We propose a model and theoretical perspective for understanding the transformation of the market structure in the recorded music industry value chain due to new forms of digital distribution. We take into account the traditional music industry’s value chain and distribution network, and the product characteristics of digital music as they relate to consumer value creation. We also showcase changes in market structure from the various perspectives of the players in the music industry value chain. We then present propositions that characterize the forces at work in market transformation and how each player’s role in the digital music industry value chain is likely to change. We also explain how intellectual property rights issues are affected by the market structure changes. Finally, we explore a number of industry mini-cases that provide evidence in support of our proposed theoretical perspective.