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The virtual record company
Linköping University, Department of Science and Technology. Linköping University, The Institute of Technology.
2007 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

The music industry is in turmoil. As physical sales are failing, digital sales are increasing rapidly. As a result, traditional business models in the recording industry are rendered insufficient and even obsolete. At large, the industry is spending money and effort on trying to control and limit the current development, but it is getting increasingly obvious that the future of music is digital. The main subject to this study, is to take an unbiased look on new and alternative business models that take advantage of the digital revolution. The underlying question is what can be done to exploit the developing situation – and is it at all possible to make a living as any kind of record company in the future music industry?

There is precious little research done in regard to the digitalisation of music, but traditional theories as well as experiences from other industries do apply. The Business Model framework allows for a combined strategic perspective (of both RBV and positioning effects and activities) to be broken down in practical solutions. In this report, it is used to both analyse existing models and propose new ones. It is clear that the recording industry is a victim to its own traditions, that previous investments have them collectively rooted. However, by applying traditional strategic thinking and taking creative use of new technologies, new business models could be identified and old ones adapted.

Strategic and management theory is combined with a small survey to supply the foundation of the study. In all, it is mainly a work of creative thinking and strategic business development. The survey is used primarily as a backup to support conclusions based on articles, and although small it successfully describes the feelings of more than 85% of the recording industry in Sweden. It draws a picture of a business in change, where the actors do understand that digital music is a necessity, although the actual activities still revolve around the traditional, physical market.

As facts and theories are applied, new business ideas are proposed. Various payment solutions are explored; PPU, subscriptions and indirect financing. There are a multitude of ways to do business in the digital domain, a few are studied in this thesis: Concepts such as access providing, mobile content, content indexing and artist development are explained and analysed. It must be concluded, that even though the future of the traditional record company business model is far from bright, there are several openings available to the conventional companies. Ways to exploit existing skills and advantages, yet adapting them for an altogether new playing field. The future of the music industry might look very different from the past, but everything points to a strong future where new, ambitious and creative actors have the opportunity to claim strong, defendable positions with revenues resembling or even surpassing those of the current industry.

Place, publisher, year, edition, pages
2007. , 46 p.
National Category
Engineering and Technology
URN: urn:nbn:se:liu:diva-96277ISRN: LITH-ITN/MU-EX--07/004--SEOAI: diva2:645412
Subject / course
University Diploma in Applied Technology - Music Producer Programme 120 credit points
Available from: 2013-09-04 Created: 2013-08-14 Last updated: 2013-09-04Bibliographically approved

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Fahlström, Petter
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