Difference between revisions of "Kretschmer, Klimis, and Wallis (2001)"

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|Year=2001
 
|Year=2001
 
|Full Citation=Kretschmer, M., Klimis, G. M., & Wallis, R. (2001). Music in Electronic Markets An Empirical Study. New Media & Society, 3(4), 417-441.
 
|Full Citation=Kretschmer, M., Klimis, G. M., & Wallis, R. (2001). Music in Electronic Markets An Empirical Study. New Media & Society, 3(4), 417-441.
|Abstract=Music plays an important, and sometimes overlooked part in the transformation of
+
|Abstract=Music plays an important, and sometimes overlooked part in the transformation of communication and distribution channels. With a global market volume exceeding $40 billion, music is not only one of the primary entertainment goods in its own right. Since music is easily personalised and transmitted, it also permeates many other
communication and distribution channels. With a global market volume exceeding $
+
services across cultural borders, anticipating social and economic trends. This article presents one of the first detailed empirical studies on the impact of Internet technologies on a specific industry. Drawing on more than 100 interviews conducted between 1996 and 2000 with multinational and independent music companies in 10 markets, strategies of the major players, current business models, future scenarios and regulatory responses to the on-line distribution of music files are identified and evaluated. The data suggest that changes in the music industry will indeed be far-reaching, but disintermediation is not the likely outcome.
40 billion, music is not only one of the primary entertainment goods in its own right.
 
Since music is easily personalised and transmitted, it also permeates many other
 
services across cultural borders, anticipating social and economic trends.
 
This article presents one of the first detailed empirical studies on the impact of
 
Internet technologies on a specific industry. Drawing on more than 100 interviews
 
conducted between 1996 and 2000 with multinational and independent music
 
companies in 10 markets, strategies of the major players, current business models,
 
future scenarios and regulatory responses to the on-line distribution of music files are
 
identified and evaluated. The data suggest that changes in the music industry will
 
indeed be far-reaching, but disintermediation is not the likely outcome.
 
 
|Authentic Link=http://nms.sagepub.com/content/3/4/417.short
 
|Authentic Link=http://nms.sagepub.com/content/3/4/417.short
 
|Link=http://eprints.bournemouth.ac.uk/1265/1/Kretschmer_Output__2.pdf
 
|Link=http://eprints.bournemouth.ac.uk/1265/1/Kretschmer_Output__2.pdf
|Plain Text Proposition=* Multinational companies may be distinguished as the main provider of
+
|Plain Text Proposition=* Multinational companies may be distinguished as the main provider of risk finance in winner-take-all markets and by their control of a capital intensive global marketing and distribution operation.
risk finance in winner-take-all markets and by their control of a capital intensive
 
global marketing and distribution operation.
 
  
* How will digital communication and distribution technologies affect the structure of
+
* How will digital communication and distribution technologies affect the structure of the music industry? Given the current oligopolistic order, it is unsurprising that our 15 interviews revealed a concerted effort by multinational companies to delay and control the impact of the Internet. Rather than engaging with the development of new business models for e-commerce, the multinationals showed a defensive orientation.
the music industry? Given the current oligopolistic order, it is unsurprising that our
 
15
 
interviews revealed a concerted effort by multinational companies to delay and
 
control the impact of the Internet. Rather than engaging with the development of new
 
business models for e-commerce, the multinationals showed a defensive orientation.
 
  
* Interviews at all multinationals indicated that they would ‘follow demand,
+
* Interviews at all multinationals indicated that they would ‘follow demand, not be proactive’ (CFO, multinational). Priority was given to protecting existing margins and relationships with retailers. Multinationals generally refuse to licence their catalogue to third parties, offering on-line distribution.
not be proactive’ (CFO, multinational). Priority was given to protecting
 
existing margins and relationships with retailers. Multinationals generally
 
refuse to licence their catalogue to third parties, offering on-line distribution.
 
  
* Despite a defensive orientation, the established music industry is unlikely to succeed
+
* Despite a defensive orientation, the established music industry is unlikely to succeed in stemming the digital tide. Scenario techniques open a way to conceptualise a multichannel future beyond on-line distribution. Over two axis’, supply and demand constraints for a future music industry were constructed. On the demand side, the consumers will either opt for high interactivity and a large range of choice, or less interactivity and more trusted suppliers of packages. On the supply side, the options are either a centralisation of content in the form of intellectual property rights (IPRs) controlled by few players, or decentralisation with IPR creators retaining ownership.
in stemming the digital tide. Scenario techniques open a way to conceptualise a multi
 
channel future beyond on-line distribution. Over two axis’, supply and demand
 
constraints for a future music industry were constructed. On the demand side, the consumers will either opt for high interactivity and a large range of choice, or less interactivity and more trusted suppliers of packages. On the supply side, the options are either a centralisation of content in the form of intellectual
 
property rights (IPRs) controlled by few players, or decentralisation with IPR creators retaining ownership.
 
  
* The music industry is entering a period of instability, which is
+
* The music industry is entering a period of instability, which is not primarily characterised by disintermediation but changing patterns of intermeditiation. The main strategic challenge to the established
not primarily characterised by disintermediation but changing patterns of
+
players appears to be that, as yet, no credible business model has emerged in the on line environment that would secure revenue streams from value-adding intermediation and, eventually, channel investments back into content production. It is conceivable that consumers are not prepared to pay for content on the Internet as they were in retail stores.
intermeditiation (cf. Klimis 1999). The main strategic challenge to the established
 
players appears to be that, as yet, no credible business model has emerged in the on
 
line environment that would secure revenue streams from value-adding
 
intermediation and, eventually, channel investments back into content production. It is
 
conceivable that consumers are not prepared to pay for content on the Internet as they
 
were in retail stores.
 
 
|FundamentalIssue=1. Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare, 3. Harmony of interest assumption between authors and publishers (creators and producers/investors), 5. Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media),
 
|FundamentalIssue=1. Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare, 3. Harmony of interest assumption between authors and publishers (creators and producers/investors), 5. Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media),
 
|EvidenceBasedPolicy=D. Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability), A. Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right),
 
|EvidenceBasedPolicy=D. Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability), A. Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right),
 
|Discipline=D4: Market Structure and Pricing, L1: Market Structure; Firm Strategy; and Market Performance, O3: Technological Change • Research and Development • Intellectual Property Rights, O33: Technological Change: Choices and Consequences • Diffusion Processes, O34: Intellectual Property and Intellectual Capital
 
|Discipline=D4: Market Structure and Pricing, L1: Market Structure; Firm Strategy; and Market Performance, O3: Technological Change • Research and Development • Intellectual Property Rights, O33: Technological Change: Choices and Consequences • Diffusion Processes, O34: Intellectual Property and Intellectual Capital
|Intervention-Response=* As the global markets become more integrated and transparent, and better copyright monitoring technologies become available, the current ways of administering copyright are under threat. Venture capitalists are entering the market (e.g. with the No. 3 US-society SESAC) ‘guided by a general feeling that rights are becoming more important, and that the established players will find it hard to adapt to the changing market and technologies’ (President, Collecting Society). In many lucrative areas
+
|Intervention-Response=* As the global markets become more integrated and transparent, and better copyright monitoring technologies become available, the current ways of administering copyright are under threat. Venture capitalists are entering the market (e.g. with the No. 3 US-society SESAC) ‘guided by a general feeling that rights are becoming more important, and that the established players will find it hard to adapt to the changing market and technologies’ (President, Collecting Society). In many lucrative areas (mechanical reproduction; broadcasting), multinational right holders are now in a technological position to monitor music usage and collect royalties themselves, rather than assigning rights to a collecting society. We recommend to clarify the role of collecting intermediaries (copyright societies) by European regulation.
(mechanical reproduction; broadcasting), multinational right holders are now in a technological position to monitor music usage and collect royalties themselves, rather than assigning rights to a collecting society. We recommend to clarify the role of collecting intermediaries (copyright societies) by European regulation.
 
  
 
*  For a creative and innovative society, access to ideas is as important as protection. Grass-root performance activities (clubs, pubs)and informal distribution networks (cassettes, fancines, internet communities, MP3 sites, local radio) appear to be an effective basis for a national music industry. Basic
 
*  For a creative and innovative society, access to ideas is as important as protection. Grass-root performance activities (clubs, pubs)and informal distribution networks (cassettes, fancines, internet communities, MP3 sites, local radio) appear to be an effective basis for a national music industry. Basic
 
intellectual property skills (including knowledge of creator’s rights, and legal options such as self-publishing) should become an educational priority.
 
intellectual property skills (including knowledge of creator’s rights, and legal options such as self-publishing) should become an educational priority.
|Description of Data=Dataset is based on on more than 100 interviews conducted between 1996 and 2000 with multinational and independent music companies in 10 markets, strategies of the major players, current business models, future scenarios and regulatory responses to the on-line distribution of music files are identified and evaluated.
+
|Description of Data=The dataset is based on more than 100 interviews conducted between 1996 and 2000 with multinational and independent music companies in 10 markets, strategies of the major players, current business models, future scenarios and regulatory responses to the on-line distribution of music files are identified and evaluated.
 
|Data Year=1996-2000
 
|Data Year=1996-2000
 
|Data Type=Primary and Secondary data
 
|Data Type=Primary and Secondary data

Revision as of 09:32, 2 July 2016

Advertising Architectural Publishing of books, periodicals and other publishing Programming and broadcasting Computer programming Computer consultancy Creative, arts and entertainment Cultural education

Film and motion pictures Sound recording and music publishing Photographic activities PR and communication Software publishing (including video games) Specialised design Television programmes Translation and interpretation

1. Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare 2. Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)? 3. Harmony of interest assumption between authors and publishers (creators and producers/investors) 4. Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption) 5. Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)

A. Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right) B. Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction) C. Mass digitisation/orphan works (non-use; extended collective licensing) D. Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability) E. Fair remuneration (levies; copyright contracts) F. Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

Source Details

Kretschmer, Klimis, and Wallis (2001)
Title: Music in Electronic Markets An Empirical Study
Author(s): Kretschmer, M, Klimis, G. M., Wallis, R.
Year: 2001
Citation: Kretschmer, M., Klimis, G. M., & Wallis, R. (2001). Music in Electronic Markets An Empirical Study. New Media & Society, 3(4), 417-441.
Link(s): Definitive , Open Access
Key Related Studies:
Discipline:
Linked by:
About the Data
Data Description: The dataset is based on more than 100 interviews conducted between 1996 and 2000 with multinational and independent music companies in 10 markets, strategies of the major players, current business models, future scenarios and regulatory responses to the on-line distribution of music files are identified and evaluated.
Data Type: Primary and Secondary data
Secondary Data Sources:
Data Collection Methods:
Data Analysis Methods:
Industry(ies):
Country(ies):
Cross Country Study?: Yes
Comparative Study?: No
Literature review?: Yes
Government or policy study?: No
Time Period(s) of Collection:
  • 1996-2000
Funder(s):

Abstract

Music plays an important, and sometimes overlooked part in the transformation of communication and distribution channels. With a global market volume exceeding $40 billion, music is not only one of the primary entertainment goods in its own right. Since music is easily personalised and transmitted, it also permeates many other services across cultural borders, anticipating social and economic trends. This article presents one of the first detailed empirical studies on the impact of Internet technologies on a specific industry. Drawing on more than 100 interviews conducted between 1996 and 2000 with multinational and independent music companies in 10 markets, strategies of the major players, current business models, future scenarios and regulatory responses to the on-line distribution of music files are identified and evaluated. The data suggest that changes in the music industry will indeed be far-reaching, but disintermediation is not the likely outcome.

Main Results of the Study

  • Multinational companies may be distinguished as the main provider of risk finance in winner-take-all markets and by their control of a capital intensive global marketing and distribution operation.
  • How will digital communication and distribution technologies affect the structure of the music industry? Given the current oligopolistic order, it is unsurprising that our 15 interviews revealed a concerted effort by multinational companies to delay and control the impact of the Internet. Rather than engaging with the development of new business models for e-commerce, the multinationals showed a defensive orientation.
  • Interviews at all multinationals indicated that they would ‘follow demand, not be proactive’ (CFO, multinational). Priority was given to protecting existing margins and relationships with retailers. Multinationals generally refuse to licence their catalogue to third parties, offering on-line distribution.
  • Despite a defensive orientation, the established music industry is unlikely to succeed in stemming the digital tide. Scenario techniques open a way to conceptualise a multichannel future beyond on-line distribution. Over two axis’, supply and demand constraints for a future music industry were constructed. On the demand side, the consumers will either opt for high interactivity and a large range of choice, or less interactivity and more trusted suppliers of packages. On the supply side, the options are either a centralisation of content in the form of intellectual property rights (IPRs) controlled by few players, or decentralisation with IPR creators retaining ownership.
  • The music industry is entering a period of instability, which is not primarily characterised by disintermediation but changing patterns of intermeditiation. The main strategic challenge to the established

players appears to be that, as yet, no credible business model has emerged in the on line environment that would secure revenue streams from value-adding intermediation and, eventually, channel investments back into content production. It is conceivable that consumers are not prepared to pay for content on the Internet as they were in retail stores.


Policy Implications as Stated By Author

  • As the global markets become more integrated and transparent, and better copyright monitoring technologies become available, the current ways of administering copyright are under threat. Venture capitalists are entering the market (e.g. with the No. 3 US-society SESAC) ‘guided by a general feeling that rights are becoming more important, and that the established players will find it hard to adapt to the changing market and technologies’ (President, Collecting Society). In many lucrative areas (mechanical reproduction; broadcasting), multinational right holders are now in a technological position to monitor music usage and collect royalties themselves, rather than assigning rights to a collecting society. We recommend to clarify the role of collecting intermediaries (copyright societies) by European regulation.
  • For a creative and innovative society, access to ideas is as important as protection. Grass-root performance activities (clubs, pubs)and informal distribution networks (cassettes, fancines, internet communities, MP3 sites, local radio) appear to be an effective basis for a national music industry. Basic

intellectual property skills (including knowledge of creator’s rights, and legal options such as self-publishing) should become an educational priority.


Coverage of Study

Coverage of Fundamental Issues
Issue Included within Study
Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare
Green-tick.png
Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)?
Harmony of interest assumption between authors and publishers (creators and producers/investors)
Green-tick.png
Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption)
Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)
Green-tick.png
Coverage of Evidence Based Policies
Issue Included within Study
Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right)
Green-tick.png
Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction)
Mass digitisation/orphan works (non-use; extended collective licensing)
Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability)
Green-tick.png
Fair remuneration (levies; copyright contracts)
Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

Datasets

Sample size: 44
Level of aggregation: Multinational music firms
Period of material under study: 1996-2000


Sample size: 72
Level of aggregation: Focus of the study is the domestic market for recorded music in the USA.
Period of material under study: 1996-2000