A Case of Electronic Commerce: The On-line Music Industry - Content,
Regulation and Barriers to Development
Emma Janson and Robin Mansell
Abstract
The European music business consists of fast-moving, unit-led production,
marketing, licensing and distribution functions. With the World
Wide Web as a potential high-speed digital distribution channel,
record companies will find it more difficult to control the distribution
chain. New artists who can create their own product potentially
will be able to produce, market and distribute their work without
the involvement of the major record companies. This scenario is
an example of disintermediation in the extreme and would result
in the collapse of the record business of today. However this scenario
may never fully be realised because of the actions that the key
players in the record business may take to re-position themselves.
The results of this study show that for the realisation of the benefits
of Internet based music distribution services, a number of changes
must take place, not only within organisations, but also in society
at large. Improvements will be needed in financial, legal and regulatory
frameworks and security, privacy and authentication issues will
need to be resolved. The paper examines whether there are 'first-mover'
advantages in early entry to the on-line music market. It shows
that large retailers are moving into position to challenge the dominance
of entrepreneurs in selling music on the Internet. The main first-mover
advantages are the opportunity to build customer loyalty and to
develop competitive advantage through acquiring tacit knowledge
and information about customers' shopping habits. The main disadvantages
facing the large retailers are associated with organisational problems
rather than technical problems.
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