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The Economics of Music Production: The Narrow Paths for Record Companies to Enter the Digital Era

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Date
2008
Lien vers un document non conservé dans cette base
http://www.idate.org/en/Digiworld-store/Collection/Communications-Strategies_18/No-72-Internet-NGN-The-Future-of-Interconnection_380.html
Indexation documentaire
Economie industrielle
Subject
Cultural industries; Industrial organization; Cultural Economics; Services; Music
Code JEL
L1; L82; L17; L11; D45; D4; D23
Nom de la revue
Communications & Stratégies
Numéro
72
Date de publication
2008
Pages article
131-153
Nom de l'éditeur
IDATE
URI
https://basepub.dauphine.fr/handle/123456789/7099
Collections
  • DRM : Publications
Métadonnées
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Auteur
Brousseau, Eric
Type
Article accepté pour publication ou publié
Résumé en anglais
On the basis of an in depth analysis of the flow of revenues within the music industry and of the emerging practices, we attempt to understand the logic at play in the current evolution of the structure of the industry. We claim that the record companies used to play a role that was useful for the dynamic and for the quality of music production, and analyze whether it can be maintained despite the impossibility for them to further control the formation and distribution of revenues generated by recorded music. Two antagonistic strategies, corresponding to different segments of the market, are highlighted in this paper. One targets the mass market and relies on the recognition by the on-line distributors of the mutual dependency between them and the record companies. It also admits that this music is characterized by short commercial life cycles and that it should be marketed as a consumer product. Moreover revenues are not necessarily generated by sales, but by the value of temporally exclusive release in some channels. The second model targets the wide number of niches at the fringe of this mass market and relies on the building of communities of customers sharing common tastes and values and on the development of their loyalty. The model is commercial, but relies clearly on the cooperation among the various stakeholders that build a common safe harbor enabling specific types of music to sustainably develop. Value added services funded by subscription have to be developed.

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